Bitcoin surpasses $106,000 on strategic reserve hopes Blogging Sole

Sparks strike the depiction of the cryptocurrency bitcoin in this illustration taken November 24, 2024. — Reuters
Sparks strike the depiction of the cryptocurrency bitcoin in this illustration taken November 24, 2024. — Reuters

Bitcoin hit a record high above $106,000 on Monday after President-elect Donald Trump suggested he planned to create a strategic bitcoin reserve in the United States similar to its strategic oil reserve, stoking the enthusiasm of crypto bulls.

Bitcoin, the world’s largest and best-known cryptocurrency, hit a high of $106,533 and was last trading up 3.2% at $104,462. The smallest crypto, ether, rose 1.5% to $3,965.

“We’re in blue skies here,” said IG analyst Tony Sycamore. “The next number the market will look for is $110,000. The pullback that many people expected just didn’t happen because now we have this news.”

Investor confidence also benefited from MicroStrategy’s inclusion in the tech-heavy Nasdaq 100 Index, which will likely lead to more inflows for the software company-turned-Bitcoin buyer.

Bitcoin and crypto have been catapulted into the spotlight as investors bet that the new Trump administration will usher in a friendlier regulatory environment, boosting sentiment around the alternative currency. Bitcoin is up 192% for the year.

“We’re going to do something great with crypto because we don’t want China or anyone else – not just China but others adopting it – and we want to be the one leader,” Trump said. CNBC late last week.

When asked if he would consider creating a crypto reserve similar to oil reserves, Trump replied: “Yes, I think so.”

Governments around the world held 2.2% of the total bitcoin supply in July, according to data provider CoinGecko, with the United States owning nearly 200,000 bitcoins valued at more than $20 billion at current levels.

China, the United Kingdom, Bhutan and El Salvador are the other countries holding a significant amount of bitcoin, data site BitcoinTreasuries showed.

Other countries are also considering setting aside strategic cryptocurrency reserves.

Russian President Vladimir Putin said earlier this month that 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, notably cryptocurrencies.

“For example, bitcoin, who can ban it? Nobody,” Putin said.

There are some skeptics, however, with Federal Reserve Chairman Jerome Powell comparing bitcoin to gold earlier this month. Analysts also point out that such a measure will take time to implement.

“I think we still need to be cautious about a strategic BTC reserve, and at least consider that it’s not likely to happen anytime soon,” said Chris Weston, head of research at Pepperstone.

“Of course, any comment from Trump that raises hopes for an increased degree of hope for the evolution of strategic reserve plans is a clear tailwind, but it would carry consequences that should be carefully considered and well communicated to market participants .”

Crypto boost

Bitcoin has surged more than 50% since the November 5 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 so far to a record of more than $3.8 trillion, according to CoinGecko.

Trump – who once called crypto a scam – embraced digital assets during his campaign, promising to make the US 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, stock exchange operator Nasdaq announced that MicroStrategy would be added to the Nasdaq-100 Index, with the change taking effect before the market opens on December 23.

MicroStrategy, an aggressive investor in the world’s largest crypto asset, has seen its shares rise more than sixfold this year, bringing its market value to nearly $94 billion. It is now the largest company holding cryptocurrency.

Pepperstone’s Weston said the market was “leading on the idea that Michael Saylor (MicroStrategy CEO) would capitalize on the likely rise in MicroStrategy’s stock price, given the impending passive flows related to its inclusion in the NAS100 – where he will probably sell shares and buy more bitcoins. »

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