Bitcoin reached a record high of over $106,000 on Monday, following comments from President-elect Donald Trump suggesting he may create a U.S. “bitcoin strategic reserve” similar to the country’s oil reserves. This announcement excited crypto investors, driving Bitcoin to $106,533 at its peak, with it later trading up 3.2% to $104,462. Smaller cryptocurrency ether rose by 1.5% to $3,965.
Tony Sycamore, an analyst at IG, noted that Bitcoin was entering “blue sky territory” and predicted the next milestone would be $110,000. The surge in Bitcoin’s price was further bolstered by the inclusion of MicroStrategy, a major Bitcoin investor, into the Nasdaq 100 index, which is expected to increase capital inflows to the company.
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Investor sentiment surrounding Bitcoin and crypto, in general, has been rising as many anticipate that the incoming Trump administration will adopt a more favorable regulatory stance towards cryptocurrencies. Trump himself has expressed his intent to make the U.S. a leader in crypto, emphasizing the desire to be ahead of China and other countries in adopting digital currencies.
As of July, governments globally held 2.2% of Bitcoin’s total supply, with the U.S. holding nearly 200,000 bitcoins valued at over $20 billion. Other countries like China, the UK, Bhutan, and El Salvador also hold significant amounts of Bitcoin.
However, there are some skeptics, such as Federal Reserve Chair Jerome Powell, who has compared Bitcoin to gold, and analysts who caution that implementing a Bitcoin reserve would take time and careful consideration.
Bitcoin’s price has surged more than 50% since Trump’s election on November 5, amid broader pro-crypto sentiment. The total value of the cryptocurrency market has nearly doubled this year, surpassing $3.8 trillion. Trump, who previously dismissed cryptocurrencies, has shown increasing support for them, including nominating pro-crypto figures for key roles in his administration.
The addition of MicroStrategy to the Nasdaq-100 Index, effective December 23, is expected to further drive Bitcoin’s rise, with speculation that the company may use the increased share price to buy more Bitcoin.
