Bitcoin approaches $90,000 for the first time ever

Bitcoin just traded back $90,000 on Monday night after breaching $80,000 just a day earlier.

The flagship cryptocurrency was last up 12% at $89,100, according to Coin Metrics. Earlier Monday, it rose as high as $89,623.00. Its price is expected by many investors to continue making new records on its way up to $100,000 later this year.

“Bitcoin is now in price discovery mode after breaking through all-time highs early last Wednesday morning when it was officially declared that Trump won the election,” said Mike Colonnese, analyst at HC Wainwright. “Strong positive sentiment is likely to continue through the balance of 2024, and (we) see bitcoin prices potentially reaching the six-figure mark by the end of this year.”

Crypto investors have cheered President-elect Donald Trump’s promises to make the regulatory environment more supportive and even friendly to crypto companies, which have long struggled with a lack of clarity in the rules of the road.

While bitcoin has long been considered a safe asset in Washington — that is, not subject to securities laws — the long tail of cryptocurrencies and crypto-related startups have operated in a risky gray area.

“It’s just turned 180 degrees,” Matt Hougan, chief investment officer of Bitwise Asset Management, told CNBC. “We’re now in a positive regulatory environment, we now have tailwinds from that, and it’s coming in the case of a market that was already in a bull market … it’s going to push us higher.”

Ether traded higher by 5.8% on Monday evening. The payment token XRP rose almost 4% and the token was linked to decentralized finance project Polygon increased by more than 4 per cent. Dogecoin has been one of the biggest winners — likely because of its connection to Elon Musk, who helped get Trump elected. It has increased by 38 per cent.

In the stock market, Coin base and Micro strategy rose about 3% and 5%, respectively, in extended trade. In the regular session on Monday, Coinbase rose 19% to trade above $300 for the first time since 2021. It is now about 6% off its high from that year.

Traders and analysts agree that this rally has only just begun.

“There seems to be a gap between the previous (bitcoin) highs around $72,000 and $100,000,” Hougan said. “It’s hard to see exactly what would force sellers to enter this market and stop the momentum before we reach that level. Of course, there are no guarantees. You could see pullbacks, but we’re in a new crypto market cycle. . .. I think we’re right to be bullish and the bias is still to the upside.”