Bitcoin is poised to be further integrated into mainstream investor markets. File photo
Nicola Mawson
Bitcoin breached the key $100 000-mark (R1.8 million) on a confluence of political events yesterday, including the toppling of the French government, civil unrest in South Korea, and US President-elect Donald Trump’s nomination of a Bitcoin advocate Paul Atkins to lead the Securities and Exchange Commission, which regulates cryptocurrency.
Yet, this run is not over, said Nigel Green, the CEO of the deVere Group – one of the world’s largest independent financial advisory and asset management organisations.
Green pointed to the digital currency moving beyond $100 000 as investors seek a safe haven. Bitcoin reached $102 444 yesterday at 1:30pm South African time.
“When governments falter or act unpredictably, people inevitably seek alternatives that don’t rely on institutional trust. That’s where decentralised currencies come in,” Green said.
Unlike fiat currencies, which are subject to political whims and policy decisions, digital assets like Bitcoin operate independently of government control, Green explained.
Their decentralised nature helps with concerns regarding security, transparency, and resistance to manipulation, making them increasingly attractive in times of political uncertainty.
“When trust is shaken – as we’re seeing in both France and South Korea – people look for assets that are not susceptible to government interference. Non-government currencies offer precisely that,” said Green.
Binance CEO, Richard Teng, pointed out that the overall Bitcoin market was now worth more than $2 trillion, almost 16 years since its first block was mined in 2009.
“This also places Bitcoin firmly on the very short list of just seven assets or companies that have achieved more than $2trln in market capitalisation, the rest being gold and tech giants NVIDIA, Apple, Microsoft, Alphabet, and Amazon,” he said.
Teng explained that Bitcoin’s “historic” rally followed “significant structural changes to the market” including potential US regulatory changes under the Trump administration and institutional adoption fuelled by the success of Bitcoin exchange-traded funds (ETFs).
“With talks of a US Strategic Bitcoin reserve and more companies adding Bitcoin to their corporate treasuries, we are on the precipice of true mainstream global adoption,” said Teng.
Among the drivers behind the run that Teng cited was that Bitcoin, with its fixed supply of 21 million coins, was a “natural hedge against fiat currency devaluation, driving increased demand” as the US Federal Reserve cuts interest rates and global liquidity rises.
In addition, Teng said, the prospect of a crypto-friendly Trump administration has injected optimism into the market, with promises to transform the US into a global crypto hub made on the campaign trail. Trump’s nomination of Atkins has further boosted confidence, he said.
Teng added that corporate entities such as Microstrategy and Marathon Digital buying into the currency, and household names like Microsoft now considering doing the same, was also a driver of the cryptocurrency’s value.
“All this indicates a broader shift toward cementing Bitcoin’s status as a strategic asset,” he said.
It is also easier to invest in Bitcoin, Teng said, due to the introduction of Bitcoin ETFs and, most recently, Bitcoin ETF options.
Institutional investors are gaining exposure and hedging risks, contributing significantly to the recent rally, he noted. Bitcoin is poised to be further integrated into mainstream investor markets, he said.
The milestone “marks a turning point in Bitcoin's journey from a niche asset to a mainstream financial instrument, attracting more institutional and retail investors, a powerful narrative and sentiment driver reinforcing crypto’s position in the financial landscape and encouraging broader adoption,” said Teng.
BUSINESS REPORT