How much higher can Bitcoin go at $100,000?

Text/Beijing Business Daily reporter Liu Sihong

Bitcoin prices continue to hit record highs. On December 5, Beijing time, the price of Bitcoin continued to rise, breaking through $96,000, $97,000, $98,000, $99,000, and $100,000. As of 13:50 on December 5, Bitcoin was still rising, with the latest price at $102,200, a 24-hour increase of 6.1%.

The surge in Bitcoin has also driven the rise of other virtual assets. Among them, the latest price of Ethereum is $3,832, a 24-hour increase of 4.67%, a weekly increase of 6.06%, and the latest price of Dogecoin is $0.4364, an increase of 4.98%, and the increase in one month is as high as 188.02%.

01 Behind the Crazy Rise‍‍‍‍‍‍‍‍

Since the beginning of this year, Bitcoin has risen by 156%. Since November, Bitcoin has risen directly from $68,000 to $100,000 in just one month.

Source: Feixiaohao

What drives the crazy rise of Bitcoin? Yu Jianing, co-chairman of the Blockchain Committee of the China Communications Industry Association and honorary chairman of the Hong Kong Blockchain Association, said that from the history of Bitcoin, its price changes can be summarized as a "bull market triple jump". First, it was a speculative bull market led by retail investors, accompanied by curiosity about technology and speculative investment sentiment, which prompted the price of Bitcoin to fluctuate and rise in the early stage. Subsequently, with the entry of institutional investors, especially after asset management companies and financial institutions configured through financial products such as ETFs, the status of Bitcoin gradually evolved from a "speculative tool" to an investment asset that can be configured, which constituted the second stage of the bull market.

This round of Bitcoin price increases clearly marks that the "bull market triple jump" has entered the third stage, that is, recognition and policy support at the level of some countries have made Bitcoin gradually become a potential choice for global reserve assets, pushing it into a new bull market stage.

In terms of news, US President-elect Trump chose virtual asset advocate and senior financial regulator Paul Atkins as Chairman of the US Securities and Exchange Commission. After the announcement of the news, a number of virtual assets rose in the short term.

In addition, not only the United States, there are market news that Russian President Putin has now publicly expressed support for virtual assets. In addition, Putin formally signed an important law that clearly identifies virtual assets as "property" and has established a comprehensive tax framework for virtual asset transactions and mining activities. This law will be officially implemented on January 1, 2025, marking a key step for Russia in the field of virtual asset regulation and taxation.

02 210,000 people were liquidated

As prices soared, some speculators suffered heavy losses. According to Coinglass data, in the past 24 hours, a total of 214,220 people were liquidated, with a total amount of US$668 million, including both bears and bulls.  

Source: Coinglass

It should be reminded that in the transaction of virtual assets, high leverage not only magnifies potential returns, but also increases risks.

As the price of Bitcoin continues to rise, market sentiment has also heated up. So how much room for growth is there after breaking through $100,000 this time? In this regard, Yu Jianing believes that from the current market fundamentals, Bitcoin still has considerable room for growth. The uncertainty of the global macro environment, especially geopolitics, coupled with the gradual decline in trust in the traditional legal currency system, has prompted more and more institutions and countries to explore the option of incorporating Bitcoin into asset allocation and foreign exchange reserves. This trend will bring larger-scale capital inflows, providing basic support for the further rise of Bitcoin.

However, Yu Jianing also pointed out that after Bitcoin broke through the milestone of $100,000, it is difficult to accurately estimate the height of the peak. In a bull market, over-speculating on highs is not a rational strategy. What is really important is to recognize the changes and developments in the fundamentals that support its value.

Although the price of Bitcoin has risen, the risks lurking behind it cannot be ignored. Yu Jianing pointed out that investors need to pay special attention to avoid excessive risk-taking and emotional operations. In particular, high-leverage transactions in the virtual asset market have significant risks. Although they may bring high short-term returns, they may also lead to serious losses when prices fluctuate violently. Digital assets are extremely volatile. Using high leverage will not only magnify returns, but also multiply the risk of loss, and even lead to a complete loss of funds in a short period of time. Therefore, investors should maintain moderate risk exposure and avoid high-leverage operations to ensure that they are not forced to close their positions when the market fluctuates.

Secondly, FOMO (fear of missing out) emotions tend to spread in bull markets, causing investors to chase the market highs, thus facing greater risk of price corrections. In the virtual asset market, blindly following the trend of investment behavior often leads to the dilemma of buying high and selling low. It is particularly important to maintain rational investment judgment based on fundamentals. Investors need to realize that every rise in the bull market is based on market fluctuations, and avoid ignoring long-term investment logic and risk management due to chasing short-term price increases.

Famous economist Pan Helin also pointed out that Bitcoin is a highly speculative asset. Under high volatility, the price of Bitcoin will also fall rapidly. Although the game of passing the parcel is very attractive, it is not suitable for ordinary investors.