Bitcoin reached a record high of more than $106,000 on Monday after President-elect Donald Trump suggested creating a US bitcoin strategic reserve comparable to its strategic oil reserve, boosting crypto bulls’ enthusiasm.
At its peak, Bitcoin the largest and most well-known cryptocurrency was trading at $106,533. It has since risen 3.2% to $104,462. The smaller cryptocurrency ether increased 1.5 percent to $3,965.
“We’re in blue sky territory here,” said Tony Sycamore, an analyst at IG. “The next figure the market will be looking for is $110,000. The pullback that a lot of people were waiting for just didn’t happen, because now we’ve got this news.”
With its inclusion in the tech-heavy Nasdaq 100 index, MicroStrategy boosted investor mood and will likely see more inflows for the software firm that bought Bitcoin.
Bitcoin and other cryptocurrencies have recently gained a lot of attention from investors who are hoping that the new Trump administration will make regulations more favorable to the alternative currency. Overall, Bitcoin’s value has increased by 192% this year.
Trump Discusses U.S. Crypto Reserve Amid Global Bitcoin Holdings
President Trump told CNBC last week, “We’re gonna do something great with crypto because we don’t want China or anybody else – not just China but others are embracing it – and we want to be the head.” This was Trump’s second interview with CNBC this week.
“Yeah, I think so,” Trump responded when questioned about his intentions about the construction of a crypto reserve analogous to oil reserves.
As of July, governments across the globe possessed 2.2% of the entire quantity of bitcoin, with the US holding approximately 200,000 bitcoins, valued at over $20 billion at current values, according to data provider CoinGecko.
According to BitcoinTreasuries, there are a number of other countries that possess substantial amounts of Bitcoin, including China, the United Kingdom, Bhutan, and El Salvador. Cryptographic assets are being considered as potential strategic reserves by other nations as well.
Earlier this month, Russian President Vladimir Putin claimed that the present US administration was debasing the US dollar’s position as the world’s reserve currency by manipulating it politically, which was causing other nations to seek out alternative assets, such as cryptocurrencies.
“For example, bitcoin, who can prohibit it? No one,” Putin said.
However, not everyone is on board; earlier this month, Federal Reserve Chair Jerome Powell compared bitcoin to gold. The analysts agree that it will take time to put this plan into action.
Chris Weston, head of research at Pepperstone, stated, “I think we still need to be cautious on a BTC strategic reserve, and at least consider that this is not likely to happen anytime soon.”
“Of course, any comment from Trump that offers an increased degree of hope that plans for a strategic reserve is evolving are an obvious tailwind, but this would come with consequences which would need to be carefully considered and well telegraphed to market players.”
Boost in the Crypto Market
When Trump and other crypto-friendly candidates were elected on November 5, the price of Bitcoin increased by almost 50%. According to CoinGecko, the market capitalization of cryptocurrencies nearly doubled this year, reaching a new high of more than $3.8 trillion.
Trump once called cryptocurrency a scam, but he supported digital assets during his campaign and said he would make the US the “crypto capital of the planet.”
Earlier this month, Trump appointed David Sacks, a former PayPal executive and a close friend of Trump adviser and megadonor Elon Musk, as White House czar for artificial intelligence and cryptocurrency.
Paul Atkins, a Washington attorney who is pro-crypto, was also named by Trump to lead the Securities and Exchange Commission.
The addition of MicroStrategy to the Nasdaq-100 Index was announced on Friday by exchange operator Nasdaq. The adjustment is scheduled to take effect prior to the market opening on December 23.
An ambitious investor in the biggest cryptocurrency asset in the world, MicroStrategy, has witnessed its share price increase sixfold this year, bringing its market worth to about $94 billion. At this point, it has more bitcoin than any other corporation.
Pepperstone’s Weston said the market was “front running the idea that Michael Saylor (MicroStrategy CEO) will capitalize on the likely rally in the MicroStrategy share price, given the impending passive flows from its inclusion into the NAS100 – where he’ll presumably sell shares and purchase more bitcoin.”
