Bitcoin: the asset that makes your heart race faster than a rollercoaster.

On December 16th, Bitcoin surpassed the jaw-dropping: €100,000 milestone. A few days later, it nosedived like a bird forgetting how to fly. So, what caused this wild ride, and more importantly, will Bitcoin soar past €100,000 again, or are we headed for a deeper crash? Let’s dive into the drama, the data, and the debates.

Why Bitcoin Reached €100,000

1. 1. Institutional Adoption: Big players like BlackRock, Fidelity, and even some central banks dipped their toes into the crypto waters. Their buying frenzy helped propel Bitcoin to new heights.
   2. Scarcity and Halving Hype: With only 21 million Bitcoins ever available, scarcity plays a massive role. The 2024 halving event meant fewer rewards for miners, tightening supply and driving up demand.
   3. Inflation Hedge: In a world where fiat currencies lose value faster than socks in the dryer, Bitcoin’s appeal as “digital gold” only grows.
   4. Retail FOMO: When prices surge, so does Fear of Missing Out. Retail investors rushed to grab a slice of the Bitcoin pie, further fueling the rally.
   5. Geopolitical Catalysts: Donald Trump returning as U.S. President and the U.S. adopting Bitcoin as part of a strategic reserve could send shockwaves through the financial world. Such moves would not only validate Bitcoin on a global scale but also inspire a buying spree among other countries, companies, municipalities, cities, provinces, and even individuals with cash reserves. This domino effect of adoption could easily push prices well beyond €200,000.

Why Bitcoin Crashed After €100,000

1. 1. Profit-Taking: When Bitcoin hit that magical number, many investors cashed out to secure their gains, triggering a domino effect of sell-offs.
   2. Regulatory Crackdowns: News of stricter crypto regulations in the EU spooked investors.
   3. Overleveraged Positions: Many traders bet on Bitcoin going even higher using borrowed money. When prices dropped, margin calls and liquidations accelerated the plunge.
   4. Market Manipulation: Whales (those with huge Bitcoin holdings) are notorious for pumping and dumping prices to profit at retail investors’ expense.

Why Bitcoin Could Go Back Over €100,000

1. 1. Renewed Institutional Interest: As the dust settles, institutions could return, attracted by Bitcoin’s long-term growth potential.
   2. Technological Upgrades: Developments like the Lightning Network improve Bitcoin’s scalability, making it more appealing for mainstream use.
   3. Macro Trends: Persistent inflation and global economic uncertainty could reignite Bitcoin’s narrative as a safe haven.
   4. Retail Resurgence: As prices stabilize, retail investors may re-enter the market, pushing prices higher.
   5. Halving Effect: Historically, Bitcoin’s price skyrockets after each halving event. The next one could set the stage for a new bull run.
   6. Geopolitical Catalysts: As Trump’s administration begins implementing its policies, the momentum is likely to continue driving Bitcoin prices higher. Strategic initiatives aimed at strengthening the U.S. economy, coupled with Bitcoin’s role in the nation’s financial reserves, will likely encourage even greater adoption. With the groundwork in place, the probability of Bitcoin’s value climbing well beyond €200,000 becomes an increasingly realistic scenario.