Bitcoin's Tumultuous Journey to $100,000: A Resurgence and a Boom

Recently, Bitcoin reached a historic milestone, soaring to an all-time high of $103,577 on December 5, 2024. This marked a triumphant moment for the digital asset

Bitcoin's Historic Ascent: From the Brink to $100K and Beyond

Bitcoin recently achieved a historic milestone, soaring to an all-time high of $103,577 on December 5, 2024. This marked a triumphant moment for the digital asset after enduring a prolonged struggle against global inflation, stringent regulations, and vocal detractors over the past few years.

Today, Bitcoin's growing popularity has solidified its position as one of the most valuable assets in the world, with its market capitalisation ($1.95 Trillion) almost equalling the GDP of major economies like Canada and Brazil. However, this remarkable ascent did not come without its share of hurdles. The road to $100,000 has been riddled with challenges, controversies, and relentless speculation about Bitcoin’s future. In this article, I’ll explore the tumultuous journey of Bitcoin that led to this achievement and analyse whether its current momentum is sustainable.

The Collapse: When Bitcoin Tumbled

At the start of 2022, Bitcoin was in dire straits, languishing below the $20,000 mark—a value not seen in years. The situation worsened in May 2022 when the Terra-Luna crisis wiped out $40-60 billion from the crypto market. Terra, an algorithmic stablecoin, lost its peg to the US dollar, resulting in a catastrophic collapse. Investor confidence plummeted, prompting large-scale withdrawals from exchanges, and liquidity dried up.

Even in India, the 2022 Union Budget's announcement of a 30% flat tax on crypto withdrawals caused trading volumes at prominent exchanges like CoinSwitch and CoinDCX to plummet by over 90%.

In November of the same year, the crypto world was dealt another blow when FTX, a leading cryptocurrency exchange in the US, declared bankruptcy. Its founder, Sam Bankman-Fried, was implicated in financial misconduct involving customer funds. He remains in jail pending further trial. This scandal further tarnished crypto's reputation, prompting governments to crack down on cryptocurrencies and instead shift focus to blockchain-based Central Bank Digital Currencies (CBDCs). Even in India, to counter the threat of crypto and promote the idea of digital currencies, the government launched its CBDC pilot in December 2022 but the tech didn't reach the final stages facing stiff competition from existing tech like UPI.

By the end of 2022, Bitcoin’s market cap had fallen by nearly 80% compared to 2021. For many, it seemed like the era of Bitcoin dominance was over.

The Resurgence: A Turning Point for Bitcoin

Despite the bleak outlook in 2022, the Bitcoin ecosystem began to show signs of recovery by mid-2023. One pivotal development was the introduction of Bitcoin Ordinals, enabling the creation of NFTs (Non-Fungible Tokens) on the Bitcoin blockchain. Although initially controversial, this innovation opened up new possibilities for the network.

Bitcoin’s value steadily climbed past the $20,000 mark in early 2023, buoyed by favourable macroeconomic conditions, slowing Federal Reserve interest rate hikes, and growing institutional interest. By October 2023, Bitcoin had surged to $30,000, signalling a sustained revival.

Several Factors Contributed to This Resurgence:

- Global Adoption: Luxury brands like Ferrari, Gucci, and Philipp Plein began accepting Bitcoin payments, expanding its utility.

- Retail Support: Companies like Home Depot, Microsoft, and Australia’s RelayPay embraced Bitcoin for transactions.

- Regulatory Progress: The European Union introduced a regulatory framework for cryptocurrencies, offering legitimacy to the market.

- Institutional Interest: Financial giants such as Blackrock and Fidelity filed for spot Bitcoin ETFs, allowing everyday investors to access Bitcoin without navigating crypto exchanges. This move infused $1.9 billion into newly launched ETFs and further legitimised Bitcoin.

By the end of 2023, Bitcoin had crossed $40,000, rekindling optimism among crypto enthusiasts and holders.

December 2024: The Bitcoin Boom

Bitcoin’s meteoric rise to $103,577 in December 2024 represents its magnificent recovery and its ability to sustain against testing macroeconomic conditions. A significant catalyst for this surge has been the influence of President-elect Donald Trump.

During his campaign in 2024, Trump positioned himself as the “crypto president,” vowing to transform the United States into the “crypto capital of the planet.” His administration has already begun shaping a favourable crypto landscape by nominating crypto advocate Paul Atkins as chair of the Securities and Exchange Commission (SEC).

In addition, Trump hinted at policies that include tax incentives for crypto investors and a strategic Bitcoin stockpile for the U.S. These moves have instilled confidence among