Bitcoin represented as a physical coin
Bitcoin (BTC-USD) is on the brink of a historic $85,000 high drawing excitement from investors worldwide. This surge is driven by a mix of rising institutional interest, a use case as a hedge against inflation and the hope that regulatory clarity will boost confidence in the crypto space.
The most recent rally began in early September when polls started to show Donald Trump retaking the lead in the presidential race. Once a skeptic of crypto, Trump has stated that he wants the U.S. to become the “crypto capital of the planet.” The official party platform for the Republican National Committee offers a position statement to grant Americans the right to “self-custody of their Digital Assets, and transact free from Government Surveillance and Control.”
The April 2024 halving event had already restricted the supply of new Bitcoin supply. With companies like BlackRock and Fidelity increasingly involved in crypto assets, there is even greater institutional demand for Bitcoin by pensions, endowments and wealth managers.
Another reason for the surge is the perception of scarcity. As of today, there are 19,780,098 BTC and a maximum supply of 21 million. With 22 millionaires in the United States, there is anecdotally less than one BTC available for every millionaire.
As Bitcoin approaches the $85,000 milestone, it has sparked a broader crypto rally lifting altcoins like Ethereum and Solana. Even as optimism grows, investors should be prepared for volatility with the potential for sudden corrections.
