Bitcoin (BTC) surged to a record high of over $107,000 on Monday after President-elect Donald Trump reiterated plans to create a U.S. strategic bitcoin reserve, similar to the nation’s strategic oil reserve, fueling optimism among crypto enthusiasts.
The rally was further supported by the inclusion of MicroStrategy (MSTR.O) into the tech-heavy Nasdaq 100 index, which is expected to increase inflows into the software firm-turned-bitcoin investor.
Bitcoin, the world’s largest and most recognized cryptocurrency, reached a session high of $107,148 and was last seen at $106,877, up 5.43% from late Friday. The second-largest digital currency, ether, rose 1.85% to $3,975.70.
“We’re in blue sky territory,” said Tony Sycamore, an analyst at IG. “The market will now be eyeing the next target of $110,000. The expected pullback didn’t occur, partly due to this news.”
The growing excitement around Bitcoin and other cryptocurrencies is fueled by the belief that Trump’s incoming administration will create a more favorable regulatory environment, boosting sentiment for alternative currencies. Bitcoin has risen about 150% in 2024.
“We’re going to do something great with crypto because we don’t want China or anyone else – not just China, but others – to take the lead, and we want to be at the forefront,” Trump told CNBC last week.
When asked if he planned to create a crypto reserve similar to the U.S. oil reserves, Trump confirmed, “Yeah, I think so,” echoing previous comments he made this year.
According to CoinGecko, governments around the world held 2.2% of Bitcoin’s total supply as of July, with the U.S. holding nearly 200,000 bitcoins worth more than $20 billion at current values. Other nations like China, the UK, Bhutan, and El Salvador are also reported to have significant Bitcoin holdings.
Russian President Vladimir Putin recently commented on the diminishing role of the U.S. dollar as the global reserve currency, citing the use of the dollar for political purposes, which has led many countries to consider alternative assets, including cryptocurrencies. “For example, bitcoin, who can prohibit it? No one,” said Putin.
However, there are skeptics, with Federal Reserve Chair Jerome Powell comparing Bitcoin to gold earlier this month. Some analysts caution that implementing a Bitcoin strategic reserve would take time.
“I think we need to be cautious about a BTC strategic reserve, and it’s unlikely to happen soon,” said Chris Weston, head of research at Pepperstone. “While Trump’s comments provide some optimism, any such move would come with significant consequences that need careful consideration and clear communication to market participants.”
Crypto Market Boost
Bitcoin has gained over 50% since the Nov. 5 election, which saw Trump and several pro-crypto candidates elected. The total cryptocurrency market value has nearly doubled this year, surpassing $3.8 trillion, according to CoinGecko.
Trump, who previously dismissed crypto as a scam, embraced digital assets during his campaign, vowing to make the U.S. the “crypto capital of the planet.”
This month, Trump 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 plans to nominate pro-crypto attorney Paul Atkins to head the Securities and Exchange Commission.
In another significant move, Nasdaq announced that MicroStrategy, led by CEO Michael Saylor, will join the Nasdaq-100 Index on Dec. 23. The company, a major Bitcoin investor, has seen its shares rise more than sixfold this year, pushing its market value to nearly $94 billion.
MicroStrategy’s inclusion in the index is expected to drive more investment in its stock, indirectly boosting its Bitcoin holdings through further debt and equity offerings. Matthew Dibb, CIO of crypto asset manager Astronaut Capital, noted that the inclusion could set off a loop of capital inflows that may drive up Bitcoin’s spot price.
