Bitcoin surged to an all-time high of $106,533 on Monday following comments from President-elect Donald Trump hinting at plans to establish a U.S. bitcoin strategic reserve. The announcement, which has energized cryptocurrency investors, comes amid broader speculation about a pro-crypto stance from the incoming administration.
The world’s largest cryptocurrency gained 3.2% by late Monday, trading at $104,462. Smaller digital asset Ether also climbed, rising 1.5% to $3,965. Tony Sycamore, an analyst at IG, noted the market’s buoyant sentiment, saying, “We’re in blue sky territory here. The next target is $110,000. The pullback many anticipated simply didn’t materialize due to this news.”
Adding to the optimism, software company and major bitcoin investor MicroStrategy was recently included in the Nasdaq-100 index, likely boosting institutional interest in cryptocurrencies. Bitcoin has already climbed 192% in 2024, driven by increased adoption and anticipation of a favorable regulatory environment under Trump.
During a CNBC interview last week, Trump emphasized the need for the U.S. to lead in cryptocurrency innovation. “We’re going to do something great with crypto,” Trump said. “We don’t want China or anyone else to dominate this space. We want to be the leader.” When asked about creating a bitcoin reserve akin to the U.S. Strategic Petroleum Reserve, Trump confirmed, “Yeah, I think so.”
Governments globally hold approximately 2.2% of bitcoin’s total supply, according to CoinGecko. The U.S. reportedly possesses nearly 200,000 bitcoins, valued at over $20 billion at current prices. Other countries, including China, Bhutan, and El Salvador, also maintain significant bitcoin reserves.
Russian President Vladimir Putin recently highlighted the growing shift toward cryptocurrencies, attributing it to concerns over the U.S. dollar’s dominance in global trade. “Bitcoin, who can prohibit it? No one,” Putin said earlier this month.
However, some remain skeptical. Federal Reserve Chair Jerome Powell has likened bitcoin to gold, questioning its utility as a reserve asset. Analysts also caution that implementing a cryptocurrency reserve would take time and could face logistical challenges. Chris Weston, head of research at Pepperstone, warned, “While Trump’s comments provide a tailwind for sentiment, this move would come with significant consequences that require careful planning.”
Bitcoin has risen more than 50% since Trump’s election on November 5, buoyed by expectations of regulatory reforms. Trump, who previously criticized cryptocurrency, has pivoted to a more supportive stance, promising to make the U.S. the global leader in digital assets.
The President-elect has named David Sacks, a former PayPal executive, as White House advisor for AI and cryptocurrencies. Pro-crypto lawyer Paul Atkins is also expected to head the Securities and Exchange Commission.
Meanwhile, MicroStrategy’s inclusion in the Nasdaq-100 reflects its status as the largest corporate holder of bitcoin, with shares skyrocketing sixfold this year to reach a market valuation of nearly $94 billion. The addition will take effect before markets open on December 23.
As bitcoin continues to soar, investors await further details on Trump’s cryptocurrency policies and their potential market impact.
