Bitcoin Surges Past $106,000 Amid Trump’s Supportive Comments on Crypto

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

Bitcoin has reached a record high, surpassing $106,000 on Monday, following President-elect Donald Trump’s hints about establishing a US bitcoin strategic reserve akin to the country's strategic oil reserve. This announcement has energized cryptocurrency advocates and investors alike.

The price of Bitcoin, which is the largest and most recognized cryptocurrency, peaked at $106,533 and was last seen trading at $104,462, up 3.2%. Smaller cryptocurrency, ether, also saw an increase of 1.5%, trading at $3,965.

“We’re in blue sky territory here,” said Tony Sycamore, an analyst at IG. He noted that the market is now eyeing the next significant milestone of $110,000. He added that the anticipated pullback from previous highs did not occur, thanks to this recent positive news.

Investor sentiment has been buoyed by MicroStrategy's recent addition to the tech-heavy Nasdaq 100 index, which is expected to drive further investments into the company, known for its bold investments in Bitcoin.

With Bitcoin's momentum increasing, investors are optimistic that Trump’s administration will promote a more favorable regulatory landscape for cryptocurrencies, enhancing confidence in alternative currencies. Bitcoin's value has surged by 192% this year.

In an interview with CNBC, Trump expressed, “We’re gonna 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 head.” When questioned about the potential for a cryptocurrency reserve, he affirmed, “Yeah, I think so.”

As of July, governments around the world hold 2.2% of Bitcoin’s total supply, according to data from CoinGecko. The US alone holds nearly 200,000 bitcoins, valued at over $20 billion at current rates.

Other nations like China, the UK, Bhutan, and El Salvador also maintain significant Bitcoin reserves, as indicated by data site BitcoinTreasuries.

Moreover, several countries are contemplating the idea of maintaining cryptocurrency strategic reserves. Earlier this month, Russian President Vladimir Putin commented that the current US administration's actions have weakened the US dollar's role in the global economy, which has led numerous countries to seek alternative assets, including cryptocurrencies. Putin asserted, “For example, bitcoin, who can prohibit it? No one.”

Despite the enthusiasm, there are cautious voices. Federal Reserve Chair Jerome Powell recently compared Bitcoin to gold. Analysts also caution that establishing a Bitcoin strategic reserve will take considerable time and effort.

“I think we still need to be cautious on a BTC strategic reserve, and at least consider that this is not likely to happen anytime soon,” stated Chris Weston, head of research at Pepperstone. “Any comments from Trump that provide hope about strategic reserve developments are certainly beneficial, yet they come with ramifications that need to be carefully assessed and communicated to market players.”

Impact on Crypto Market

Since the election on November 5, which saw Trump elected alongside several other pro-crypto candidates, Bitcoin's price has increased by over 50%. The overall cryptocurrency market has nearly doubled this year, reaching a staggering total value exceeding $3.8 trillion, as reported by CoinGecko.

Trump, who previously called cryptocurrencies a scam, has shifted his stance to embrace digital assets during his campaign, pledging to transform the United States into the “crypto capital of the planet.”

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

Additionally, Trump intends to nominate Paul Atkins, a pro-crypto attorney, to lead the Securities and Exchange Commission.

On Friday, Nasdaq announced that MicroStrategy would be included in the Nasdaq-100 Index, with this change slated to take effect before the market opens on December 23. MicroStrategy, known as a major investor in Bitcoin, has seen its share price soar by more than six times this year, increasing its market capitalization to approximately $94 billion, making it the largest corporate holder of Bitcoin.

Pepperstone’s Weston explained that the market seems to be anticipating the prospect of MicroStrategy CEO Michael Saylor capitalizing on the expected rise in the company’s stock price, likely selling shares to acquire more Bitcoin.

Bitcoin, Trump, Crypto