Bitcoin Just Hit $100,000, But How Did It Get There?

Reaching the vaunted $100,000 mark this morning, the cryptocurrency is officially up more than 159% since its low of $38,505 earlier this year. According to CoinMarketCap, it is by far the largest cryptocurrency with a market capitalization of around $2 trillion – more than the GDP of Spain.

According to analytics firm Glassnode, Bitcoin made an initial feint at $100,000 on November 25, but then fell back to just over $98,000 due to massive profit-taking by long-time holders. On Thanksgiving Friday, it again reached over $98,000 before falling back again.

However, after another breather, BTC finally broke above $100,000 today. The new record appears to have been triggered by President-elect Donald Trump’s announcement that he has picked Paul Atkins, a pro-crypto candidate, to head the Securities & Exchange Commission. Atkins will replace current SEC Chairman Gary Gensler, who has earned the wrath of the crypto world by filing multiple lawsuits against crypto companies.

Nevertheless, the digital coin has not always been on the rise. Through more than a decade of ups, downs, crashes and euphoric highs, the coin persevered and has now reached the six-figure threshold that few, aside from true Bitcoin believers, ever expected.

How did we get here?

The origin of Bitcoin

The idea for Bitcoin was proposed during the 2008 recession by an anonymous individual or group of people named Satoshi Nakamoto. In a white paper, Nakamoto laid out his vision for a peer-to-peer currency that exists outside the control of major financial institutions and governments.

Using a new technology called blockchain, Nakamoto has created a digital coin enabled by miners who help maintain a transparent public ledger where anyone can observe transactions as they occur. In 2009, the first block was mined on the Bitcoin blockchain.

Because Bitcoin has a limited supply of 21 million coins and a mechanism that halves miners’ rewards approximately every four years, the asset is deflationary – meaning each new token becomes more expensive – and many have used it as a store of value , similar to gold.

The first famous Bitcoin transactions

However, it was initially a slow start for the newly created digital money. Although the cryptocurrency attracted followers and developers who helped it grow, it still wasn’t worth very much and was rarely accepted as a real currency anywhere.

On May 22, 2010, Florida resident Laszlo Hanyecz made a deal with another user on a Bitcoin forum to accept Bitcoin for pizza. In one of the most infamous Bitcoin transactions, Hanyecz sent the forum member 10,000 Bitcoins, then worth about $41, for two pizzas worth about $25 Benzinga. The 10,000 Bitcoin would be worth about $1 billion at today’s new record price.

In 2019, Hanyecz told 60 minutes He wasn’t too upset about what now looks like a one-sided deal. The crypto community still celebrates every May 22nd as “Bitcoin Pizza Day,” and Hanyecz is more than okay with that.

“It’s pretty cool to have a holiday in my honor,” he said 60 minutes.

Deserve some recognition

In 2012, Bitcoin’s first halving resulted in a decline in mining rewards and a slowdown in coin supply. In 2013, the price of Bitcoin exceeded $100 for the first time.

That’s when financial regulators began to take notice of the emerging currency – but not always in a positive way. Many regulators and financial figures, such as JPMorgan CEO Jamie Dimon, believed that digital currency was limited to facilitating illegal transactions. They found it was heavily used on the anonymous black market platform Silk Road, created by Ross Ulbricht, who was known online as “Dread Pirate Roberts.” The Treasury Department’s Financial Crimes Enforcement Network (FinCEN) also released its first guidelines on digital currencies in 2013, alerting users that transactions in Bitcoin could attract law enforcement attention. In the same year, China banned financial institutions from using Bitcoin.

Bitcoin’s first boom

Partly due to the collapse of the Mt. Gox crypto exchange in 2014 – the largest of its time – the cryptocurrency experienced a wave of skepticism and sell-offs. However, Bitcoin experienced its first signs of a boom in 2017, when its price broke $19,000 for the first time.

Institutions also started diving into the crypto world. In 2017, the first futures contract traded on the Chicago Board Options Exchange overwhelmed the CBOE website. Later that year, the Chicago Mercantile Exchange also launched its own Bitcoin futures contract.

Another tailwind during this time was the ICO (Initial Coin Offering) boom. Countless new digital coins – not necessarily related to Bitcoin – sprung up and many investors bought in for speculative purposes. But while many of these coins later disappeared, Bitcoin endured as the original cryptocurrency with solid mechanisms to protect its value, even though its price was in a downward spiral (again) until 2018.

The pandemic Bitcoin rush

In 2020, Michael Saylor, co-founder and then-CEO of MicroStrategy, began quietly hoarding Bitcoin through his business intelligence company. MicroStrategy initially invested $250 million in the coin, but has since poured much of its cash into the asset and its holdings now total at least $30 billion.

Then Bitcoin saw another boom in 2021 after the pandemic kept people in their homes, where they naturally gravitated towards meme stocks and digital currencies. The coin hit a record high of $60,000 at the time, attracting new investors such as Elon Musk’s Tesla and the country of El Salvador, led by President Nayib Bukele, a Bitcoin enthusiast. El Salvador now reportedly owns more than $500 million in Bitcoin.

Why is Bitcoin rising now?

The coin received a boost in January this year after the Securities and Exchange Commission approved the first spot Bitcoin exchange-traded funds (ETFs) that directly track the price of the cryptocurrency. The ETFs have helped drive up the price of Bitcoin by making it much more accessible to retail investors and making it easier for them to deal with traditional financial institutions.

In recent weeks, the price of Bitcoin has exploded, especially after Donald Trump won the US presidential election. Investors expect Trump to be friendlier toward cryptocurrencies, a marked shift from the often hostile stance of Biden administration SEC Chairman Gary Gensler.

Earlier this week, Gensler said he would resign when Trump takes office on January 20. Trump’s pro-Bitcoin proposals include a “strategic Bitcoin reserve” and the creation of a crypto advisory board that could include leading US crypto companies.

Trump’s tariff proposals may also have led investors to flock to stores of value like Bitcoin as a hedge against inflation.