In recent hours, the financial markets have witnessed unprecedented developments, with Bitcoin breaking the $100,000 barrier and rising above $102,000 for the first time in history on Thursday, benefiting from a combination of political and economic factors.
In my opinion, this achievement is not just a new record, but a reflection of fundamental shifts in the balance of financial markets, raising questions about the future of cryptocurrencies and their relationship with global political and economic changes.
The announcement of Paul Atkins being appointed as the new chairman of the U.S. Securities and Exchange Commission (SEC) triggered the recent surge.
Atkins is known for his pro-cryptocurrency stance and opposition to excessive regulation, which has sparked optimism among investors regarding the future of Bitcoin and the crypto market.
This appointment is part of President-elect Donald Trump’s administration’s steps, signalling a potential shift in U.S. policies toward crypto assets, especially after a period of regulatory conflict under Gary Gensler’s leadership.
From a psychological standpoint, breaking the $100,000 and $102,000 levels represents a turning point in the market. Investors view this milestone as the beginning of a new phase of upward momentum, as Bitcoin enters what is known as the “price discovery” phase, a situation that makes it difficult to predict the new price ceiling.
I expect the next target to be between $110,000 and $113,000, supported by market optimism and continued liquidity flowing into cryptocurrencies.
The situation looks quite different in France, which is facing a political crisis after the government lost a vote of no confidence, leaving the country in political uncertainty. The divisions within the parliament and a growing fiscal deficit, which has reached 6% of GDP, are putting increasing pressure on the French economy. While financial markets have not shown major reactions yet, real risks may emerge shortly, especially if the new government fails to pass an acceptable budget.
In my view, the French crisis highlights how politics can affect financial markets. The stability of French bond yields so far reflects temporary confidence that the government will find a way to pass the budget. However, this stability could be fragile, especially if political divisions persist and concerns about France’s ability to manage its fiscal deficit grow. Here, markets may increasingly focus on upcoming financial data, which could determine whether France faces a debt crisis similar to the one that hit the Eurozone a decade ago.
Regarding global monetary policies, Federal Reserve Chairman Jerome Powell’s statements have added another dimension to market assessments. Powell pointed to the strength of the U.S. economy but ruled out a significant rate cut, reinforcing the likelihood of the dollar stabilizing in the near term. Although these statements appear cautious, they support expectations of continued U.S. economic growth, which could positively impact financial markets overall.
In line with these developments, Hut 8 announced its plan to raise $500 million to purchase Bitcoin as a strategic reserve. In my opinion, this move reflects the new trend among major companies adopting Bitcoin as part of their financial strategies. Hut 8 is not the only company embracing this approach, but it is one of the prominent players in this field. Choosing Bitcoin as a reserve asset reflects growing confidence in its value and sustainability as a haven, especially amid increasing economic and geopolitical challenges.
What stands out to me here is the mutual impact between traditional markets and cryptocurrencies. With Bitcoin’s rise, we may witness liquidity being pulled from other assets, potentially affecting stocks, particularly in Europe, which is struggling with weak performance in some of its sectors. This interconnection between markets underscores the importance of closely monitoring political and economic movements to better understand market behaviour.
In conclusion, Bitcoin surpassing the $100,000 and $102,000 levels is not just a numerical achievement, but an indicator of deeper changes in the global financial system. The interactions between political decisions, such as Paul Atkins’ appointment, and economic crises, such as the situation in France, highlight the growing role of cryptocurrencies as a key player in financial markets. However, at the same time, these changes present new challenges for investors, requiring careful consideration of both risks and opportunities.
The most important question remains: Can Bitcoin maintain this momentum amid the current political and economic challenges? The answer depends on how markets react to upcoming events, whether in Washington, Paris, or even among major companies betting on Bitcoin as part of their future strategies.
