Bitcoin tops $100,000 as post-election rally rolls on

It was bound to happen, but, quietly on Wednesday evening, bitcoin finally crossed the $100,000 level for the first time, cheering crypto bulls who believe the incoming Trump administration will encourage the crypto currency strongly. 

At 4:40 a.m. ET, bitcoin was quoted at $102,579, up $3,783, or 3.83%, from Wednesday’s close of $98,972. Bitcoin had been surging toward $100,000 ever since Donald Trump’s victory in the Nov. 5 Presidential election. The surge to $100,000 became serious in mid-November.

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The currency is up more than 5.4% since Nov. 29 and has soared 52.6% since the election. It is also up more than 141% in 2024. 

Other crypto currencies also have been jumping as well. 

Related: Nvidia, AMD risks rise as U.S.-China chip war heats up

Only a few stocks have had similar performances this year. 

The biggest winner is actually related to crypto: business-intelligence and software company MicroStrategy  (MSTR) . Co-founded by Michael Saylor, the company has been borrowing billions and pulling in hedge funds as investors as Saylor builds a massive bitcoin portfolio now valued at around $40 billion. 

MicroStrategy shares are up 542.8% in 2024 after an 8.7% gain on Wednesday. The shares jumped another 6.8% premarket on Thursday.

Others include: 

Vistra Corp.  (VST) , up 315% as of Nov. 29.Palantir Technologies  (PLTR) , up 290.68% as of Nov. 29.Texas Pacific Land  (TPL) , up 205.3% as of Nov. 29. Nvidia  (NVDA) , up 179.2% as of Nov. 29.

The Trump Connection

The current bitcoin surge was set off by Donald Trump and Elon Musk both promoting it and vowing to get rid of governmental restraints. 

It began as an idea sketched out in a memo in 2008. The idea was it could be a store of value and could facilitate commerce with minimal interference from governments. 

It has been used in some commerce, and there are bitcoin ATMs popping up around the world.

Cryptocurrency ATMs, operated by Coinhero, in Hong Kong, China, in August.

Bloomberg/Getty Images

That it has reached $100,000 is amazing, but bitcoin enthusiasts have to remember that it is a volatile instrument, subject to huge booms, like right now, and savage slumps. In 2022, the value of bitcoin fell nearly 69%. 

Bitcoin isn’t a currency as much as it is a store of value, like gold, which finished Wednesday at $2,676.20 an ounce and is up 29.2% in 2014.

Its value moves up and down according to its ecosystem of investors. It reflects global economic trends as well. The U.S. stock market is in the second year of a bull run that’s seen the S&P 500 rise 58.5% since the end of 2022. That was a year that the index fell 19%.

And bitcoin joined the economic party this past winter when the Securities & Exchange Commission grudgingly agreed to permit exchange-traded funds based on bitcoin.

Just about all of the ETFs are up more than 100% since trading began. 

More Economic Analysis:

Trump Trade puts stocks at record. Where do we go from here?Fed inflation gauge higher in October amid consumer spending boostGoldman Sachs analyst sees starting point for year-end S&P 500 rally

Because bitcoin reflects global trends, however, bitcoin is still subject to market forces. By measures financial analysts use, bitcoin is now slightly overvalued, with a relative strength index at just above 70. That’s a hint that gains from here may be harder to achieve.

When an RSI rises above 75, that’s a warning something is getting overbought. When bitcoin hit $68,500 in March, the RSI hit 88.6, and bitcoin fell 21% by September.  

Stocks showing signs of being frothy

Interestingly, U.S. stocks themselves have begun to show signs of being overbought. The S&P 500, Nasdaq Composite and Dow Jones Industrial Average hit record levels on Wednesday. And the RSIs for the S&P 500 and the Nasdaq both moved above 70 for the first time since July. 

Futures trading suggest U.S. markets may open slightly lower on Thursday.

Many market watchers, however, are sure the bull market will be strong well into 2025 with the S&P 500 making a charge to perhaps 7,000. 

Related: Veteran fund manager delivers alarming S&P 500 forecast