Bitcoin tipped to rocket to $120,000 early subsequent yr after Trump chooses pro-crypto chairman of the US monetary regulator

Bitcoin topped $100,000 for the first time yesterday and is tipped to rocket to $120,000 early next year following Donald Trump’s election victory in the US.

The cryptocurrency has soared since the election on hopes he will follow through with his campaign promise to make the US the ‘crypto capital’ of the world. 

Bitcoin was worth $66,077 before the election and plateaued at $99,395 two weeks later.

It broke through the $100,000 barrier early yesterday after Trump announced he would appoint pro-crypto Paul Atkins chairman of the US financial regulator, the Securities & Exchange Commission. Trump took to social media to tell bitcoin investors: ‘You’re welcome’.

Boost: Bitcoin broke through the $100,000 barrier after Donald Trump announced he will appoint pro-Crypto Paul Atkins (pictured), as chairman of the Securities & Exchange Commission

IG Markets analyst Tony Sycamore said: ‘This is likely to be the catalyst for the next wave of momentum-buying, which takes it to the next stop of $105,000, before $120,000 in 2025.’

One factor that may keep Bitcoin prices high is the fact supply is constrained. There are fewer than 20m bitcoins and 75 per cent is believed to be in the hands of long-term holders, limiting supply.

At the same time, the fees that Bitcoin ‘miners’ receive for using computers to create new coins was cut by 50 per cent in April as part of halving’. This takes place every four years to lower the supply of cryptocurrency entering the market.

Thomas Lee, at US investment group Fundstrat Global Advisors, told broadcaster CNBC: ‘The exchanges are concerned because there is a pretty low supply of bitcoin available over the counter. So, you have a supply shortage and bitcoin itself makes a move above $100,000.’

Although Bitcoin has more than doubled this year, eToro analyst Simon Peters suggested it still had a year or so to climb even higher, as Bitcoin movements tend to peak 12 to 18 months after ‘halving’.

‘We’re still reasonably early in this bull market if past years and cycles are anything to go by,’ he said. However he warned that Bitcoin could fall back by the end of the year, before resuming its surge.

‘We’ve hit a psychologically important milestone that could see some people take some of their chips off the table, feeling now is the time to bank some profits.’