President-elect Donald Trump has nominated crypto advocate Paul Atkins as SEC Chair, while Federal Reserve Chair Jerome Powell compared Bitcoin to gold in recent remarks on Wednesday.

These announcements sent Bitcoin soaring past $100,000, marking a more than 5% gain in 24 hours. Cryptocurrency-related stocks also rallied, with  $MicroStrategy (MSTR.US)$ rising over 8% and  $Coinbase (COIN.US)$ and  $Riot Platforms (RIOT.US)$ both advancing more than 6%.

Atkins' nomination reflects Trump's pledge to support a crypto-friendly administration, a key campaign promise. Currently the CEO of Patomak Partners and a former SEC Commissioner, Atkins is expected to steer the agency towards embracing digital assets. Trump noted, “He (Paul Atkins) also recognizes that digital assets & other innovations are crucial to Making America Greater than Ever Before.”

Powell compared Bitcoin to gold, labeling it a speculative asset in a Wednesday speech. "It's just like gold, only it's virtual," Powell remarked. He noted that Bitcoin is not widely used as a form of payment or a store of value, highlighting its high volatility. "It’s not a competitor for the dollar; it’s really a competitor for gold," he added.

The Bitcoin-to-gold ratio has surpassed its previous peak from 2021. Despite this, Bitcoin is still held in smaller amounts by institutions and governments compared to gold. Powell's comments, coupled with a potential shift towards a crypto-friendly regulatory environment, may further bolster Bitcoin's acceptance.

Bitcoin Marks a Milestone Year

$Bitcoin (BTC.CC)$ has surged over 136% year-to-date in 2024, surpassing silver to become the world's seventh-largest asset with a market cap exceeding $2 trillion, poised to be the best-performing mainstream asset of the year.

Bitcoin has reached several significant milestones in 2024, including the approval of a Bitcoin spot ETF in January, an April halving event, the onset of an interest rate cut cycle in September, Donald Trump's win in the U.S. election, and the November launch of Bitcoin spot ETF options. Enhanced investment diversification, improved market liquidity, and optimism about a favorable regulatory environment have attracted substantial capital to the Bitcoin market.

Amid Bitcoin's surge, cryptocurrency-related stocks have also posted impressive gains this year. MicroStrategy, a major Bitcoin holder, has soared as much as 540% year-to-date. Mining firms  $TeraWulf (WULF.US)$ and  $Hut 8 (HUT.US)$ have jumped over 230% and 100%, respectively. Additionally, shares of cryptocurrency exchange Coinbase have risen 90%.

Bitcoin May Surpass $200,000 by 2025

Wall Street foresees Bitcoin prices climbing in 2025, buoyed by a mix of favorable conditions.

With Donald Trump assuming the presidency, uncertainty over U.S. cryptocurrency regulation has waned, bolstering investor confidence in Bitcoin's trajectory. Trump campaigned on making the U.S. a "global cryptocurrency capital," suggesting a national Bitcoin reserve, a cryptocurrency advisory council, and relaxed regulations to draw more investors and businesses.

The cycle of interest rate cuts is also fueling Bitcoin demand, with the post-halving period expected to sustain Bitcoin ETF inflows, integrating cryptocurrencies further into traditional finance portfolios.

Standard Chartered analysts project Bitcoin could reach $125,000 by spring 2025, possibly surpassing $200,000 by year-end. They cite Trump's policy changes as factors likely to boost market confidence and Bitcoin prices.

Bernstein's Gautam Chhugani predicts Bitcoin will hit $200,000 by the end of 2025, driven by growing institutional interest and potential regulatory shifts.

Venture capitalist Tim Draper sees Bitcoin at $250,000 in 2025, describing it as just the beginning. He envisions Bitcoin's price multiplying 30 times eventually, reshaping global finance.

Crypto influencer Arthur Hayes anticipates U.S. monetary policy easing will devalue the dollar, propelling Bitcoin and other crypto assets higher. He forecasts Bitcoin reaching $250,000 by 2025.

How to Capitalize on Bitcoin's Surge?

Investors looking to capitalize on the Bitcoin bull market might consider investing in Bitcoin-related stocks.

$MicroStrategy (MSTR.US)$ holds the largest Bitcoin reserve among public companies, with 402,100 Bitcoins as of December 1. Its shares have surged more than fourfold this year, outstripping Bitcoin's own gains. This rise stems from MicroStrategy's role as a proxy for Bitcoin investments, attracting those unable to buy cryptocurrencies directly. As Bitcoin prices rise, investors expect improved earnings forecasts and valuation multiples for MicroStrategy, highlighting the distinct valuation dynamics between equities and digital currencies.

$Coinbase (COIN.US)$, the leading US cryptocurrency exchange, enables direct trading of digital currencies, deriving most of its revenue from transaction fees. Its stock is influenced not only by Bitcoin price fluctuations but also by broader market activity, investor sentiment, and regulatory developments. A robust cryptocurrency market and increased trading activity could boost Coinbase's trading volume and revenue, potentially lifting its stock price.

Bitcoin miners such as  $CleanSpark (CLSK.US)$,  $MARA Holdings (MARA.US)$,  $TeraWulf (WULF.US)$, and  $Hut 8 (HUT.US)$ are highly sensitive to short-term Bitcoin price movements due to stable mining costs. However, their long-term profitability and stock performance may face challenges from rising mining costs, increased competition for computing power, declining Bitcoin prices, or heightened mining difficulty.

Source: Yahoo Finance, CNBC, IG

by moomoo News Olivia