Bitcoin broke previous records by breaching the $100,000 mark for the first time in history to reach an all-time high of $104,088 slow Wednesday in Recent York. The flagship cryptocurrency fell to $94,587 on Wednesday, but has made a remarkable comeback. Several key factors contributed to this unprecedented growth:

#1 Fed Chairman Powell compares Bitcoin to gold

In a significant acknowledgment from the conventional financial sector, Federal Reserve Chairman Jerome Powell discussed Bitcoin at the Recent York Times’ DealBook Summit. When asked about viewing Bitcoin as a symbol of faith, or lack thereof, in the U.S. dollar and the Federal Reserve, Powell offered a nuanced perspective.

“I don’t think people think about it that way,” Powell noted. “People use Bitcoin as a speculative asset, right? It’s like gold. It’s like gold, only virtual. This is digital. People don’t use them as a form of payment or a store of value. It is very changeable. It is not a competitor to the dollar; it really is a gold competitor.”

This comparison to gold, a conventional asset, was likely seen by many as another mighty legitimization of Bitcoin in the financial ecosystem.

If your central bank owns gold but rejects digital gold… it’s over. How has betting against digitalization worked for Kodak, Blockbuster, Sears, Yellow Pages, newspapers, taxis, postal services, libraries, travel agencies, etc.?

This is the most obvious trade ever https://t.co/tdJp8XCTjO

— David Bailey🇵🇷 0.85 mm/btc is vital (@DavidFBailey) December 4, 2024

#2 Russian Putin signals openness to Bitcoin

Also adding to the momentum, Russian President Vladimir Putin made comments during the Russia Calling forum that many interpreted as support for Bitcoin.

“Who can ban Bitcoin? Nobody,” Putin said. “And who can prohibit the employ of other electronic means of payment? Nobody. Because these are fresh technologies. And no matter what happens with the dollar, these tools will continue to evolve one way or another as everyone strives to lower costs and enhance reliability.

The background to Putin’s comments is speculation about the upcoming “Bitcoin space race” between the world’s superpowers. President-elect Donald Trump pledged to establish a strategic bitcoin reserve in the United States during his election campaign and at the Bitcoin 2024 conference in Nashville. He even suggested that part of the US debt could be “paid off” with Bitcoin.

David Bailey, CEO of BTC Inc and an advisor to the Trump team, emphasized the urgency of this initiative on X: “The Bitcoin space race is already here. […] It couldn’t be clearer what’s going on. Maintaining a strategic bitcoin reserve in the first 100 days of the Trump administration must be a national priority. We need an aggressive plan to increase U.S. proportional ownership of the Bitcoin supply.”

It couldn’t be clearer what’s going on.

Maintaining a strategic bitcoin reserve in the first 100 days of the Trump administration must be a national priority. We need an aggressive plan to enhance U.S. proportional ownership of the Bitcoin supply. https://t.co/a85wLNoXSS

— David Bailey🇵🇷 0.85 mm/btc is vital (@DavidFBailey) December 4, 2024

#3 Powerful point demand and institutional interest

This enhance resulted from mighty activity on the cash market and significant institutional participation. During the rally, interest in Bitcoin futures skyrocketed by more than $4 billion, according to data data by Coinalyze. Funding rates have also reached unprecedented levels, surpassing the highs seen two weeks ago when Bitcoin first reached $99,500.

Importantly, growth was driven by spot markets and not just derivatives speculation, indicating vigorous and sustained demand. The infamous “Great Wall of Sales” at $100,000, which had previously resisted the upward move, was decisively broken on the second attempt.

Market analysts speculate that major players such as Michael Saylor may have been behind the significant buying pressure. Notably, MARA Holdings, Inc., the largest publicly traded Bitcoin mining company by market capitalization, recently raised $850 million through an offering of zero-coupon convertible senior notes due in 2031. While this is not confirmed, it is highly likely that MARA used these funds to accumulate Bitcoin during a period of price increases.

Supporting this claim, CryptoQuant reported: “Bitcoin exceeds 100k. dollars as institutional demand drives the market. The Coinbase Premium Index highlights continued buying pressure from U.S. investors.”

#4 Retail market in disbelief

Despite the bullish momentum, retail traders seem in disbelief. Online analytics firm Santiment noted that while whale accumulation continues to rise, retail sentiment remains cautious.

Santiment noted: “As whale accumulation continues to look strong, the only factor holding back the 100k BTC story is dollars is the excitement of retail traders.” The company emphasized that the beginning of December brought an enhance in skepticism and expectations for a significant price correction after November’s historic increases. However, the current social media landscape reflects “hesitation and uncertainty on the part of traders”, with a ratio of negative to positive comments.

“Given numerous signs over the years that cryptocurrency markets are moving in the opposite direction to crowd expectations, we should feel encouraged by the FUD and high profit-taking of our fellow traders,” Santiment added. “There may be a bit more of a battle between bulls and bears at this level, but we can see the long-awaited milestone come to fruition very soon as long as key stakeholders continue to accumulate more and more BTC.”

At the time of publication, the BTC price was $102,681.

Featured image created with DALL.E, chart from TradingView.com