Bitcoin Price Surpasses $100K Again: What's Driving the Increase?

Bitcoin crossed the $100,000 mark on Thursday for the first time since February, marking a key milestone in its ongoing price movement. Given that the cryptocurrency is trading close to its all-time highs, the development has attracted investors' and market participants' renewed interest. The current concern is whether Bitcoin can maintain this level and keep growing.

Bitcoin was trading at $103,048.27 at the time of writing, up 4.18 per cent over the previous day. The 24-hour trading volume stood at $66.73 billion, reflecting heightened market activity. With analysts and investors considering the potential for a new record, the cryptocurrency presently seems to be getting closer to its record high of $109,110, which was established on January 20.

In the last month, Bitcoin's price has risen by 33.87 per cent, highlighting a significant uptick in market activity and investor interest, according to Coinmarketcap.

What's Driving the Bitcoin Price Rally

As Bitcoin crosses the $100,000 mark, Sumit Gupta, Co-founder, CoinDCX, points to several key factors that are contributing to Bitcoin price surge.

He says: "Bitcoin breaching the $100,000 mark reflects the asset's growing maturity and increasing institutional and retail confidence. Key drivers include record inflows into Bitcoin Spot ETFs, forward-thinking policies such as Arizona's Bitcoin Reserve Fund, and rising Bitcoin dominance. With better infrastructure and more transparent regulations, Bitcoin's place in international portfolios is expected to rise significantly."

Sumit added that BTC's rise to $100K is not only boosting its own market but also driving a rally in altcoins. With an estimated $235 billion in fresh liquidity joining the cryptocurrency market, altcoins like Ethereum have seen a significant 20 per cent rise, which is indicative of institutional trust and general market optimism.

How Should Investors Respond to Bitcoin's Surge

As Bitcoin approaches significant milestones like $100K, investors are faced with the decision of whether to take profits or hold for long-term growth. Here's how investors can navigate this crucial choice, according to Edul Patel, Co-founder and CEO of Mudrex:

He says, "Investors should take a long-term approach, especially in the volatile crypto market. Profit-taking should be based on an asset's fundamentals rather than short-term price movements."

He added, "Bitcoin's fixed supply and growing demand make it a strong long-term investment, and strategies like dollar-cost averaging can help manage risk and optimize returns."