Bitcoin’s unprecedented surge reached over $107,000 on Monday, following President-elect Donald Trump’s reaffirmation of his intention to establish a strategic U.S. bitcoin reserve, akin to the nation’s oil reserve. This announcement has further fuelled the optimism among cryptocurrency enthusiasts.
The positive mood among investors was also buoyed by the addition of MicroStrategy MSTR.O to the Nasdaq 100 index, a move expected to attract additional capital into the tech-focused software company that has become a significant bitcoin investor.
Bitcoin, the largest and most well-known cryptocurrency, climbed to a peak of $107,148 during the session and was last seen trading at $106,877, which is a 5.43% increase from the previous Friday. Meanwhile, Ether, the second largest digital currency, rose by 1.85% to $3,975.70.
“This is uncharted territory,” remarked Tony Sycamore, an analyst at IG. “Market watchers are now eyeing the $110,000 mark. The correction many anticipated hasn’t materialized, especially with the latest developments,” he added.
The spotlight has turned to Bitcoin and other cryptocurrencies as the market speculates that the upcoming Trump administration will promote a more favorable regulatory framework, enhancing the appeal of these alternative assets. So far, Bitcoin has soared approximately 150% in 2024.
“We’re going to do something significant with crypto because we don’t want to fall behind China or any other country that is advancing in this area,” Trump stated in an interview with CNBC last week.
When questioned about his plans for a cryptocurrency reserve akin to the nation’s oil reserves, Trump responded affirmatively, “Yeah, I think so,” echoing his earlier statements this year.
As of July, governments globally held about 2.2% of all mined bitcoins, according to CoinGecko. The United States alone owns nearly 200,000 bitcoins, valued at over $20 billion at current prices.
Other nations, including China, the UK, Bhutan, and El Salvador, also hold substantial bitcoin reserves, as reported by BitcoinTreasuries.
Several other countries are contemplating the establishment of cryptocurrency reserves.
This month, Russian President Vladimir Putin criticized the current U.S. administration for undermining the U.S. dollar’s role as the global reserve currency, which he claimed has prompted many countries to explore alternatives like cryptocurrencies.
“For example, bitcoin, who can prohibit it? No one,” Putin pointed out.
However, there are skeptics. Federal Reserve Chair Jerome Powell recently compared bitcoin to gold, and analysts have noted that implementing such strategic reserves could take time.
“We should remain cautious about the immediate establishment of a BTC strategic reserve,” suggested Chris Weston, head of research at Pepperstone. “Any statements by Trump that suggest progress towards such a reserve certainly provide a boost, but the implications need careful consideration and clear communication to market participants,” he added.
Crypto boost
Since the November 5 election, which brought Trump and other pro-crypto candidates to power, Bitcoin has surged more than 50%. The total cryptocurrency market value has nearly doubled this year, surpassing $3.8 trillion, as per CoinGecko.
Trump, who previously criticized crypto as a scam, has embraced digital assets during his campaign, pledging to make the U.S. “the crypto capital of the world.”
This month, Trump appointed David Sacks, a former PayPal executive and close friend of Trump adviser and major donor Elon Musk, as the White House czar for artificial intelligence and cryptocurrencies.
Trump also announced his intention to nominate Paul Atkins, a pro-crypto attorney from Washington, to lead the Securities and Exchange Commission.
Last Friday, Nasdaq revealed that MicroStrategy, under CEO Michael Saylor, will join the Nasdaq-100 Index effective December 23. MicroStrategy, a prolific investor in Bitcoin, has seen its stock value increase sixfold this year, bringing its market cap to nearly $94 billion, making it the largest corporate holder of Bitcoin.
The inclusion in the Nasdaq 100 is expected to prompt investors to purchase MicroStrategy shares to reflect the index’s composition, potentially increasing the company’s stock value and enabling further cryptocurrency acquisitions through debt and equity offerings, explained Matthew Dibb, chief investment officer at Astronaut Capital.
“While the inclusion was somewhat unexpected, it has certainly sparked excitement about a potential cycle of capital influx that could drive the spot price of Bitcoin higher,” he said.
Additional reporting by Kevin Buckland in Tokyo, Ankur Banerjee in Singapore, Amanda Cooper in London, Medha Singh in Bangalore, and Alden Bentley in New York; Edited by Lincoln Feast, Louise Heavens, Ros Russell, and David Gregorio
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Passionate about analyzing economic markets, Alice M. Carter joined THE NORTHERN FORUM with a mission: to make financial concepts accessible to everyone. With over 10 years of experience in economic journalism, she specializes in global economic trends and US financial policies. She firmly believes that a better understanding of the economy is the key to a more informed future.
