NEW DELHI: Despite regulatory uncertainties around the globe, Bitcoin prices on Thursday breached the psychologically important level of $100,000, surging nearly 133% over the last one year. The rise in cryptocurrency was hastened by the victory of Donald Trump in the US presidential election.
Bitcoin prices have risen by over 50% since the US presidential Election Day (5 November 2024) in anticipation that the Trump administration will ease regulatory hurdles and create a more favourable environment for digital assets. The market cap of Bitcoin is now a massive $2 trillion.
The rise in Bitcoin prices beyond $100,000 mark is a testament to the resilience and adoption of Bitcoin, says Sumit Gupta, co-founder, CoinDCX.
“The psychological breakthrough will prompt institutions, companies, and countries to take Bitcoin and crypto more seriously. Retail investors may now view it as a validated, stable asset class, and we could see deeper integration of bitcoin into mainstream investment products,” added Gupta.
Bitcoin is the first decentralised cryptocurrency invented in 2008 by a yet unknown person named Satoshi Nakamato. Its use began in 2009. Ever since, bitcoin prices have seen many ups and downs with bouts of heart-stopping volatility.
Yet over the long-term, the digital currency has given eye-popping returns. In the last five years, prices of Bitcoins have surged 1,263% or 13 times its price. “This growth is still shy of the levels we experienced during the peak of 2021, underscoring the untapped potential in the ecosystem as we steadily move toward brighter times,” says Balaji Srihari, business head, CoinSwitch.
The surge in Bitcoin prices in the last one month has also had a rub-off effect on other cryptos. Ethereum prices have jumped 60% in the past one month and 2,500% in the past five years. Market cap of Ethereum is closing in on $500 billion mark. Other tokens such as Solana and XRP have hit an all-time high.
The regulatory uncertainty, however, will continue to make bitcoin a risky investment option, especially for retail investors. In India, the government has not yet taken a call on complete ban of cryptocurrencies despite the Reserve Bank of India’s persistent demand for a ban. Reserve Bank of India governor Shaktikanta Das has on several occasions termed the digital currency as a threat to financial sovereignty of the country.
The Indian government has, however, tried to disincentivise investment and trading in cryptocurrencies by levying 30% tax on capital gains and 1% tax on transactions in cryptos.