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Bitcoin surpassed $100,000 for the first time in its history, a milestone.
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The rise of bitcoin responds to the currency’s own fundamentals, beyond other factors.
This Thursday, December 5, bitcoin (BTC) recorded a milestone by surpassing the USD 100,000 barrier for the first time in its history. This event not only marks a historic aspect for the most important digital currency in the world. It also challenges the critical narratives of prominent figures in the world of investment and economics, who for years have dedicated themselves to questioning its value and usefulness.
Warren Buffet, American businessman and one of the world’s greatest investors, as well as CEO of the Berkshire Hathaway firm, has been a vocal critic of bitcoin.
In 2018, Buffet qualified to the currency as “rat poison squared.” This narrative dates back to 2013, when Charlie Munger, vice chairman of Berkshire Hathaway, also described to BTC as “rat poison”, at a time when the currency was trading above USD 150.
Bitcoin has also upset academic eminences
Now, not only traditional investors like Buffet and Munger have expressed their discontent. Nobel Prize winners in Economics have also raised their voices against it.
Joseph Stiglitz, 2001 Nobel Laureate, advocated in 2022 for banning bitcoin and cryptocurrencies, arguing that facilitated money laundering. In statements to a German media, Stiglitz proposed “closing” these currencies due to the lack of transparency.
Another Nobel Prize winner, Paul Krugman, stated in 2022 that bitcoin was heading “towards extinction,” especially during the bear market that year, where he published an article cataloging Bitcoin technology. as useless.
Bitcoin’s rise to over $100,000 refutes critical narratives from figures such as Warren Buffet and other renowned economists demonstrating growing institutional and state adoption.
It turns out that the entry of large financial institutions with products like bitcoin exchange-traded funds (ETFs), along with the recognition of this digital currency by governments as a store of value or even legal tender, shows that BTC has gained legitimacy and utility in the global financial ecosystem, something that critics did not anticipate.
The institutional and state boom around bitcoin has had a direct impact on its price by increasing demand due to large capital investment, which, combined with the fixed supply of bitcoin, naturally raises its value.
BTC broke $100,000 this Thursday, a milestone. Source: TradingView.
Bitcoin has its own fundamentals to rise
However, the rise in the price of bitcoin and its crossing of the USD 100,000 barrier is not entirely due to the institutional impact. It must be remembered that bitcoin has intrinsic fundamentals that explain its price increase.
Bitcoin operates under an economic policy based on scarcity. With a fixed supply of 21 million coins, Its value tends to increase as demand grows.
This means that, as more investors and users seek to own bitcoin, its price increases due to limited supply, which decreases over time due to halvingswhich are the mechanisms of the code created by Satoshi Nakamoto to regulate the issuance of this digital currency.
On the other hand, bitcoin’s neutrality, that is, its independence from any central entity, and its decentralization, where no individual or group can control the network, are factors that positively influence its price. These characteristics make bitcoin an asset that is difficult to manipulate and accessible globally, which has successfully attracted both retail and institutional investors.
Now, institutional and state interest has played a crucial role in the increase in the price of bitcoin. Certainly, the bitcoin ETF Issued by large financial firms such as BlackRock, Fidelity and Grayscale, they allow traditional investors to access bitcoin without having to directly purchase the currency.
To put it in context, these financial products have a total net accumulation of $32.29 billion and total net assets valued at $108.23 billionequivalent to 5.5% of the total BTC supply, according to the data by SosoValue.
The impact of ETFs on the price of BTC is undeniable. Source: SosoValue.
These financial products not only facilitate investment, but also legitimize bitcoin as a financial asset, increasing its demand. and, consequently, its price.
Additionally, the bitcoin strategic reserves narrative has gained traction. Companies like MicroStrategy have adopted bitcoin as a store of value, holding until now more than 400,000 coins and controlling 2% of the total supply; and other companies and countries, such as the United States, they are about to make their way in similar policies, reflecting a growing acceptance which directly impacts the behavior of the price of bitcoin.
The rise of bitcoin to USD 100,000 is relevant not only for the number itself, but for what it symbolizes in terms of acceptance and validation of its economic fundamentals.
Firms like Standard Chartered and Bernstein, which predicted bitcoin would surpass $100,000 this year, They project future increases up to $200,000 in 2025, based in the growing adoption and limited supply of new currencies, as CriptoNoticias has reported.
Bitcoin’s $100,000 milestone not only refutes past criticism from figures like Warren Buffet, Joseph Stiglitz and Paul Krugman, but also underscores its maturation. as an asset with solid economic fundamentals and with a global acceptance that cannot be ignored.
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