Bitcoin hit a record high of $107,000 on Monday after President-elect Donald Trump reiterated that he plans to create a US strategic bitcoin reserve similar to its strategic oil reserve, fueling the enthusiasm of crypto bulls.
Investor sentiment was also boosted by MicroStrategy’s inclusion in the tech-heavy Nasdaq 100 index that is likely to lead to more inflows for the software firm turned bitcoin buyer.
Bitcoin, the world’s largest and most popular cryptocurrency, extended gains to a session high of $107,148 and was recently at $106,877, up 5.43% since late Friday. No. 2 of the digital currency ether rose 1.85% to $3,975.70.
“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 pull that many people expected just didn’t happen, because now we’ve got this news.”
Bitcoin and crypto have been catapulted into the spotlight as investors bet that the incoming Trump administration will usher in a friendlier regulatory environment, boosting sentiment around the alt-currency. Bitcoin is up about 150% in 2024.
“We’re going to 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 leader,” Trump told CNBC late last week.
When asked if he plans to build a crypto reserve similar to oil reserves, Trump said: “Yes, I think so.” He advocated the same earlier this year.
Governments around the world held 2.2% of the total bitcoin supply as of July, according to data provider CoinGecko, with the United States holding about 200,000 bitcoins worth more than $20 billion at current levels.
China, Great Britain, Bhutan and El Salvador are the other countries with a significant amount of bitcoins, the data site BitcoinTreasuries showed.
Other countries have also considered strategic cryptocurrency reserves.
Russian President Vladimir Putin earlier this month said the current US administration was undermining the US dollar’s role as a reserve currency in the global economy by using it for political purposes, forcing many countries to turn to alternative assets, including cryptocurrencies.
“For example, bitcoin, who can stop it? No one,” said Putin.
There are skeptics, however, with Federal Reserve Chairman Jerome Powell comparing bitcoin to gold earlier this month. Analysts also point out that any such action will take time to implement.
“I think we should still be wary of a strategic BTC reserve and at least consider that unlikely to happen anytime soon,” said Chris Weston, head of research at Pepperstone.
“Of course, any comments from Trump that offer a higher degree of hope that plans for a strategic stockpile are evolving is an obvious windfall, but it would come with consequences that would need to be carefully considered and communicated to well market actors.
The rise of cryptos
Bitcoin is up more than 50% since November. The 5th election that saw Trump elected along with many other pro-crypto candidates. The total value of the cryptocurrency market has nearly doubled in the year to date to reach a record of over $3.8 trillion, according to CoinGecko.
Trump — who once called crypto a fraud — embraced the digital asset during his campaign, promising to make the United States “the crypto capital of the planet.”
Trump this month named a White House czar for artificial intelligence and cryptocurrencies, former PayPal executive David Sacks, a close friend of Trump adviser and megadonor Elon Musk.
Trump also said he would nominate pro-crypto Washington lawyer Paul Atkins to head the Securities and Exchange Commission.
On Friday, the Nasdaq exchange said that MicroStrategy, led by Chief Executive Michael Saylor, will be added to the Nasdaq-100 Index, with the change taking effect before the market opens in December. 23.
MicroStrategy, an aggressive investor in the world’s largest crypto asset, has seen its stock rise more than sixfold this year, taking its market value to almost $94 billion. It is now the largest corporate holder of cryptocurrency.
As part of the Nasdaq 100, investors would buy shares of MicroStrategy to mirror holdings of the broader index, thereby increasing the stock’s value and allowing the company to buy more crypto through debt and equity offerings, Matthew Dibb, CEO of investments. at crypto asset manager Astronaut Capital, said.
“The inclusion seems a bit unexpected, but that hasn’t stopped the excitement of what many believe is the start of a new capital cycle that could potentially boost bitcoin’s spot price,” he said.
Shares of MicroStrategy rose 4.2% on Monday.
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