Bitcoin Surges Past $106,000 Amid Trump’s Support for Crypto

A cartoon image of US President-elect Donald Trump holding a Bitcoin token celebrated the cryptocurrency's rise over $100,000, displayed at a Coinhero store in Hong Kong. (Image: Getty)

Bitcoin skyrocketed to an unprecedented high above $106,000 on Monday after President-elect Donald Trump indicated he plans to establish a U.S. bitcoin strategic reserve, similar to the country’s strategic oil reserve. This announcement has excited many investors in the crypto market.

Bitcoin, the largest and most recognized cryptocurrency, reached a peak of $106,533 before retracing slightly to trade at $104,462, which is still up by 3.2%. Ethereum, another significant cryptocurrency, also saw an increase of 1.5%, rising to $3,965.

“We’re in blue sky territory here,” stated Tony Sycamore, an analyst at IG. “The next target for the market will likely be $110,000. The pullback that many were anticipating didn’t occur, mainly because of this new information.”

Market sentiment received an additional boost with the announcement of MicroStrategy's inclusion in the tech-focused Nasdaq 100 index, which is expected to drive more investments into the company that has heavily invested in bitcoin.

Overall, Bitcoin and the cryptocurrency market have gained significant attention as investors speculate that the incoming Trump administration will create a more favorable regulatory environment. So far this year, Bitcoin has increased by an impressive 192%.

“We’re going to do something great with crypto because we don’t want China or anyone else to take the lead – not just China but others are embracing it – and we want to be at the forefront,” Trump remarked in an interview with CNBC last week.

When questioned about establishing a crypto reserve akin to the oil reserves, Trump affirmed, “Yeah, I think so.”

Globally, governments held around 2.2% of Bitcoin’s total supply as of July, according to data from CoinGecko. The United States alone holds nearly 200,000 bitcoins, which is valued at over $20 billion based on current prices.

Other nations holding significant quantities of bitcoins include China, the UK, Bhutan, and El Salvador, as per data from BitcoinTreasuries. Some countries are also exploring the idea of creating strategic cryptocurrency reserves.

In recent statements, Russian President Vladimir Putin stated that the actions of the current U.S. administration have diminished the U.S. dollar's standing as the global reserve currency, prompting many countries to pursue alternative assets like cryptocurrencies. “For instance, with bitcoin, who can prohibit it? No one,” Putin added.

However, some voices remain skeptical; for example, Federal Reserve Chair Jerome Powell compared bitcoin to gold earlier this month, and analysts caution that any proposed moves towards a strategic reserve will take considerable time to materialize.

“We need to remain cautious about the notion of a BTC strategic reserve, and it’s crucial to understand that such developments are unlikely to happen in the immediate future,” explained Chris Weston, head of research at Pepperstone. “Comments from Trump that hint at a strategic reserve being developed can be seen as a positive influence, but they come with implications that need to be carefully considered and communicated clearly to the market.”

Market Momentum for Crypto

Bitcoin has surged more than 50% since the November 5 election, which saw Trump and many other pro-crypto candidates gain office. The overall value of the cryptocurrency market has nearly doubled this year, now surpassing $3.8 trillion, according to CoinGecko.

Trump, who previously labeled cryptocurrency a scam, has embraced digital assets during his campaign, promising to transform the United States into the "crypto capital of the planet."

This month, Trump appointed former PayPal executive David Sacks as a White House czar for artificial intelligence and cryptocurrencies. Sacks is a close associate of Trump advisor and significant donor Elon Musk.

Additionally, Trump stated he would nominate well-known pro-crypto attorney Paul Atkins to lead the Securities and Exchange Commission.

This past Friday, Nasdaq announced that MicroStrategy, a major player in the bitcoin investment space, would be added to the Nasdaq-100 Index, with this change taking effect before the market opens on December 23.

MicroStrategy, which has aggressively invested in bitcoin, has seen its stock price soar more than six-fold this year, bringing its market capitalization close to $94 billion, making it the largest corporate holder of Bitcoin.

Pepperstone’s Weston mentioned that the market seems to be anticipating that Michael Saylor (CEO of MicroStrategy) will take advantage of the likely increase in MicroStrategy's share price due to its inclusion in the Nasdaq 100, potentially selling shares to buy more Bitcoin.

Bitcoin, Trump, Crypto