FameEX Hot Topics | Bitcoin Price Likely to Remain Above $100K Following Three Key Events

Bitcoin has struggled to maintain its $100,000 price level, but this could change as regulations adapt and institutional adoption becomes more streamlined. While many Bitcoin supporters point to factors like spot exchange-traded fund (ETF) inflows and growing institutional interest as key drivers for Bitcoin’s ability to sustain high prices, they often overlook the fundamental shifts required to transform Bitcoin from a high-risk asset into a reliable store of value, akin to digital gold.

The real drivers of Bitcoin’s long-term price growth are threefold: regulatory reforms that enable wider institutional participation, relaxed rules on retirement investments, and a growing recognition of Bitcoin as a strategic reserve asset like gold. These factors could prompt institutional investors to view Bitcoin as a stable store of value, laying the groundwork for sustained price growth.

Despite increasing interest from banks and pension funds, regulatory and accounting hurdles remain significant. Many pension funds and wealth management firms are not structured to hold spot Bitcoin ETFs due to existing administrative and regulatory constraints. These institutions also have internal policies that would require modification to include Bitcoin in their portfolios. Relaxing regulations, such as easing the Employee Retirement Income Security Act (ERISA) rules, would provide fiduciaries with the flexibility to allocate funds to Bitcoin. Such changes could unlock substantial capital flows and foster broader acceptance of digital assets within the traditional financial sector.

Corporate giants, however, remain cautious. For instance, Microsoft’s shareholders recently voted down a proposal to add Bitcoin to the company’s balance sheet. Despite the potential advantages, such proposals are often met with resistance from corporate boards and investors who remain wary of Bitcoin’s volatility and regulatory uncertainties.

On a macroeconomic level, investor sentiment is heavily influenced by broader economic conditions, particularly the Federal Reserve’s policies. With the expected continuation of the current interest rate range of 4.25% to 4.50% from the Federal Open Market Committee (FOMC) meeting in late January, speculative investments like Bitcoin face ongoing challenges. Nevertheless, regulatory shifts, such as repealing SAB 121 guidance that allows banks to treat custodial crypto holdings as off-balance-sheet items, could lead to greater institutional involvement and adoption, strengthening Bitcoin’s role as a mainstream asset.

Disclaimer: The information provided in this section is for reference only and does not represent any investment advice or the official views of FameEX.