Bitcoin price will hold $100K for good after three key events take place

Bitcoin advocates who propagate various theories of how high BTC price can go often cite the spot exchange-traded fund (ETF) inflows and institutional adoption as reasons why prices will stay above $100,000. However, this type of analysis fails to focus on the underlying factors that lead investors to shift their perception of Bitcoin from a high-risk asset to the equivalent of digital gold.

The three real catalysts for Bitcoin’s sustainable price rise include regulatory changes that enable wider institutional participation, relaxed restrictions on retirement investments, and increasing recognition of Bitcoin as a strategic reserve asset similar to gold.

Strict regulations and internal policies limit institutional Bitcoin adoption

While banks and pension funds are inclined to increase their Bitcoin exposure, regulatory and accounting standards present significant obstacles. Most pension funds and wealth management firms are not structured to hold spot Bitcoin ETFs due to administrative restrictions or internal mandates requiring modification.

Notably, companies like MicroStrategy remain outliers. For instance, at Microsoft’s Dec. 10, 2024, shareholders’ meeting, the proposal to add Bitcoin to the company’s balance sheet garnered minimal support. Moreover, Microsoft’s board had previously advised against the measure, resulting in a near-unanimous rejection.

From a macroeconomic perspective, investor sentiment is closely tied to the Federal Reserve’s guidance. The consensus for the Federal Open Market Committee (FOMC) meeting on Jan. 29, 2025, suggests the maintenance of the current 4.25% to 4.50% interest rate range. Regardless of Bitcoin’s risk profile, elevated capital costs continue to constrain economic growth and suppress speculative investments.

If investors anticipate a downturn in stock and housing markets, the demand for cash positions and short-term government bonds intensifies. This pattern was evident in early 2025 when traders flocked to safer assets, even at the expense of reduced returns or losses on positions such as long-term bonds, commercial properties, and equities.

The surge in demand for safety triggered a “flight to quality” movement, reflected in the US 6-month Treasury yield, which dropped to its lowest level since October 2022, hovering near 4.30%. Simultaneously, the US dollar strengthened against a basket of foreign currencies as global investors sought refuge in cash holdings. This trend underscores fears that a potential recession would disproportionately affect other economies while the US retains a relative advantage due to its dominant financial position.

SAB 121 repeal, retirement account reform, and a strategic Bitcoin reserve

Regulatory changes are set to play a pivotal role in Bitcoin’s path to broader adoption. The repeal of SAB 121 guidance, for instance, allows banks to classify custodial crypto holdings as off-balance-sheet items, potentially enhancing profitability. This adjustment might also influence European regulators to soften MiCA rules, opening the door for Bitcoin’s use as collateral in loans or financial instruments, provided the regulatory framework evolves accordingly.

Related: Decentralized platforms may benefit from strict US crypto tax laws

Relaxing restrictions on retirement accounts could further accelerate institutional adoption. If Employee Retirement Income Security Act (ERISA) rules were eased, fiduciaries might gain the flexibility to allocate assets to Bitcoin, unlocking significant capital inflows and fostering broader acceptance of digital assets within traditional financial systems.

Finally, Bitcoin’s role as a strategic reserve asset could gain momentum under the incoming administration of President-elect Donald Trump. While direct government purchases remain uncertain, restricting sales of existing holdings could reduce selling pressure and solidify Bitcoin’s position as a legitimate asset class, further integrating it into global financial markets.