The recent meteoric rise of Bitcoin, breaking past USD 90K for the first time, isn’t an accident, in my opinion. It is a sign of imminent changes that will reshape global finance. Bitcoin’s resurgence isn’t just about speculation; it’s the result of several contributing factors, and it will solidify its legitimacy as a global asset class.

Why Bitcoin Skyrocketed

First, however, we need to understand why this boom is happening now. Attributing the rise to Donald Trump’s win in the US presidential election would be too easy – it is due to a perfect storm of macroeconomic, technological, and political factors.

The inflation rate in the leading industrial countries has taken longer to come down than many market analysts anticipated, and central banks have waited before cutting interest rates to prevent economies from overcooking. This, along with geopolitical tensions, has driven investors, particularly institutional players, to seek alternatives – alternatives like Bitcoin. Its uncoupled characteristics have enabled it to retain value during the period of high inflation and outperform classic risk-off assets such as gold.

Secondly, we’re almost a year into a world where Bitcoin is a viable investment vehicle for institutional investors especially with the launches of Bitcoin ETF’s, giving legitimacy to what was once described as ‘magic Internet money’. Sceptics have been largely silenced, serious voices in the financial industry have mellowed their tones, and fears of crashes, spikes, and the rollercoaster price rides of old have gone. Bitcoin is here to stay, and an almost USD 2T market cap proves that.

Thirdly, the re-election of Donald Trump has most certainly been a catalyst. Despite his earlier skepticism about cryptocurrency, he branded himself as the pro-crypto candidate this year, even declaring that he wants the US to become the ‘crypto capital of the planet,’ with Bitcoin the ‘superpower of the world.’ This was all the crypto investor needed to hear.

Lastly, there’s the topic of de-dollarization. While a complete switchover is unlikely in my view, we can already see some signs of de-dollarization in the global markets. Energy transactions, for example, are increasingly priced in non-USD currencies. Because of this, Bitcoin is now viewed as a non-sovereign asset that can be immune to the whims of any single nation. Thus, this digital currency represents a hedge not just against inflation but also against political instability.

Impact on Global Finances

The rise of Bitcoin prices is going to lead to several changes that will be felt both short term and long term. In the short term, it will lead to an accelerated adoption of blockchain technology across industries. Financial institutions that once dismissed it are now investing in infrastructure to integrate Bitcoin and other cryptocurrencies into their offerings.

Moreover, it could speed up the race to issue Central Bank Digital Currencies (CBDCs). This could be a way for many nations to try to compete with Bitcoin’s borderless appeal.

In the long term, I believe Bitcoin can reshape the foundation of finance and push traditional systems toward greater transparency and decentralization. And while it’s a long way from replacing fiat currencies, Bitcoin can cement its role as the ‘digital gold’ and a key player in the global economy.

A Clarion Call for Fintech

Bitcoin’s growth signals a deeper shift in the global financial order. For those of us in fintech, it’s a clarion call. Simply put, Bitcoin represents the democratization of finance, something that individuals everywhere have been waiting for.

Its rise marks the beginning of a new financial system where digital assets coexist with traditional ones. Ignore it at your peril; embrace it, and the opportunities are boundless.