A closer look at BTC’s record-setting surge above $86K

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It’s Veterans Day. It’s also now known as the day bitcoin climbed above $86,000 for the first time. 

And, oh yeah, that crypto exchange filed for bankruptcy exactly two years ago. FTX, I think it was called. Not to mention US spot bitcoin ETFs launched 10 months ago, today.

First, about bitcoin: Donald Trump’s crypto-related promises and ultimate election win (along with pro-crypto Congress members) certainly has sparked additional industry euphoria.  

Bitwise’s Matt Hougan had said he expects BTC to hit $100,000 by the end of the year and continue upward in 2025. Aside from the expected general crypto regulatory clarity, he and others continue to point out the possibility of BTC becoming a US reserve asset — an idea floated by US Sen. Cynthia Lummis.

“I think it makes it a harder market to short because we could wake up at any moment and the US could be establishing a strategic bitcoin reserve or another country could be front-running the US establishing a strategic bitcoin reserve,” Hougan explained. “That was just a wild idea that you couldn’t consider [before].”

There were rumors that a nation-state snatching up BTC was driving the latest price boost. We did find out that the company best known for hoarding BTC made another big purchase (more on that later).

Blockworks co-founder Jason Yanowitz summed up the crypto market vibes with a screenshot of a Monday research note from financial firm Bernstein: 

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“We recommend investors who have so far remained shy of any crypto exposure due to regulatory concerns invert their mental model,” the analysts wrote. “We are in a regulatory tailwind zone now.”

Some have warned of short-term “retrenchments,” or dips, as we know BTC is a volatile asset.

Copper.co research head Fadi Aboualfa also cautioned that securities laws won’t change overnight, and that BTC remains closely tied to broader economic forces.

“Inflation is still elevated, interest rates haven’t eased, and the US dollar remains strong; these forces are not sustainable in tandem,” he wrote in an email. “One will eventually weaken. The real question is: Which one, and why?” 

Taking a step back, it’s pretty wild that BTC reaching a new peak comes exactly two years after FTX filed for bankruptcy. Re-reading a piece I wrote on Nov. 11, 2022 — titled “What’s next for FTX and its customers after bankruptcy filing?” — was a bit surreal.  

Bitcoin’s price had dropped to as low as about $16,000 that month. That’s less than one-fifth of what it is today. 

Sentiment seemed to shift a bit when BlackRock entered the race to launch a spot bitcoin ETF in June 2023. Less than seven months later, the SEC greenlit those products; BTC eclipsed $73,000 a couple months after that — a high that would stand until election night last week.

Today is an even 10 months since the US spot BTC ETFs launched. Net flows into those products hit a single-day record of nearly $1.4 billion on Nov. 7. After reeling in another $293 million on Nov. 8, the category’s total inflows now amount to more than $25.8 billion.

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These vehicles are poised to play a big role in allowing institutions wanting exposure to bitcoin (particularly in a friendlier environment) to more easily execute that desire.

Then there are the other planned spot crypto ETFs, which industry watchers noted would have a better chance of gaining approval in the short term with a Trump win and new SEC leadership.

Dare I ask: What could go wrong?

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