Bitcoin surged to a record high above $106,000 on Monday, following remarks from President-elect Donald Trump suggesting he plans to establish a U.S. bitcoin strategic reserve, similar to the nation’s oil reserve. This news sparked increased enthusiasm among cryptocurrency investors.
Bitcoin, the world’s largest cryptocurrency, reached a high of $106,533 and was last trading up 2.6% at $103,917 as of 1215 GMT. Meanwhile, the smaller cryptocurrency ether rose by 0.4% to $3,918.
“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 pullback that a lot of people were waiting for just didn’t happen, because now we’ve got this news.”
Investor sentiment also received a boost from MicroStrategy’s inclusion in the Nasdaq 100 index, a move that’s expected to attract more investments into the software firm-turned-bitcoin buyer.
Bitcoin and crypto have gained significant attention as investors speculate that the incoming Trump administration will foster a more favorable regulatory environment for digital assets, further strengthening market sentiment. Bitcoin has surged by 151% this year.
“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,” Trump told CNBC last week. When asked if he plans to create a strategic cryptocurrency reserve similar to the oil reserve, Trump responded, “Yeah, I think so.”
As of July, governments worldwide held 2.2% of Bitcoin’s total supply, with the U.S. possessing nearly 200,000 bitcoins valued at over $20 billion at current prices, according to data provider CoinGecko. Other nations with significant bitcoin holdings include China, the UK, Bhutan, and El Salvador.
Several other countries are also considering cryptocurrency reserves. Russian President Vladimir Putin recently criticized the U.S. for undermining the dollar as the global reserve currency, which has led many countries to explore alternatives like cryptocurrencies. “For example, bitcoin, who can prohibit it? No one,” Putin stated.
However, not all are optimistic about the idea. Federal Reserve Chairman Jerome Powell has compared bitcoin to gold, and analysts caution that implementing such a reserve would take time.
“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,” said Chris Weston, head of research at Pepperstone. “Of course, any comment from Trump that offers an increased degree of hope that plans for a strategic reserve are evolving are an obvious tailwind, but this would come with consequences which would need to be carefully considered and well telegraphed to market players.”
Since Trump’s November 5 election victory, Bitcoin has surged by more than 50%. The total value of the cryptocurrency market has nearly doubled in 2024, surpassing $3.8 trillion, according to CoinGecko.
Trump, who once labeled crypto a scam, has since embraced digital assets and pledged to make the U.S. the “crypto capital of the planet.” He recently appointed David Sacks, a former PayPal executive and close associate of Elon Musk, as a White House czar for artificial intelligence and cryptocurrencies. Trump also announced plans to nominate pro-crypto lawyer Paul Atkins to lead the Securities and Exchange Commission.
On Friday, Nasdaq revealed that MicroStrategy, led by CEO Michael Saylor, would be added to the Nasdaq-100 Index, with the change effective December 23. MicroStrategy, a major player in Bitcoin investment, has seen its shares skyrocket this year, boosting its market value to almost $94 billion. It now holds more Bitcoin than any other corporation.
The Nasdaq-100 inclusion will likely lead to more buying of MicroStrategy shares, driving up the value of the stock and allowing the company to purchase even more Bitcoin through debt and equity offerings, according to Matthew Dibb, CIO at crypto asset manager Astronaut Capital.
“The inclusion seems a bit unexpected, but that hasn’t stopped the excitement of what many believe to be the start of a looping cycle of capital that could potentially drive up the spot Bitcoin price,” Dibb said.
