Updated – December 16, 2024 11:02 am IST
Bitcoin surged to a new all-time high, crossing the $106,000 mark during early Asian trading hours on Monday. The rally was fuelled by remarks from President-elect Donald Trump, who hinted at the creation of a U.S. bitcoin strategic reserve similar to the country’s existing strategic oil reserve.
The world’s most prominent cryptocurrency climbed to a peak of $106,533 before stabilizing at $105,688. Ether, the second-largest cryptocurrency by market cap, also benefited from the momentum, rising nearly 3% to trade at $4,014.
“We’re in uncharted territory here,” said Tony Sycamore, an analyst at IG. “Traders were expecting a pullback, but Trump’s comments have sparked fresh optimism. The next milestone on everyone’s radar is $110,000.”
Trump’s Pro Bitcoin Stance
The surge came after Trump’s interview last week with CNBC, where he emphasized his intention to prioritize U.S. leadership in cryptocurrency. “We’re going to do something great with crypto,” Trump stated, adding, “We don’t want China or anyone else to dominate this space. We want to lead.”
When specifically asked about establishing a crypto reserve akin to the nation’s strategic oil reserve, Trump confirmed, “Yeah, I think so.” His statement has sparked widespread speculation and excitement within financial markets and the broader crypto community.
Global Interest in Crypto Reserves
The concept of national cryptocurrency reserves is gaining traction globally. Earlier this month, Russian President Vladimir Putin questioned the necessity of holding reserves in traditional foreign currencies, particularly the U.S. dollar. Putin criticized the U.S. administration’s politicization of the dollar, which he claims has weakened its global reserve currency role.
“Countries are turning to alternatives like cryptocurrencies,” Putin said. “Who can prohibit bitcoin? No one.”
Despite this growing interest, skepticism remains. Federal Reserve Chair Jerome Powell recently dismissed bitcoin’s viability as a competitor to traditional currencies. “Bitcoin is highly volatile and not widely used as a store of value or a medium of exchange,” Powell remarked. “It’s more akin to gold than the dollar.”
The Crypto Market Surges
Since Trump’s election victory on November 5, bitcoin has soared over 50%. Trump’s presidency, which aligns with a pro-crypto stance, has bolstered investor confidence across the cryptocurrency market. The total market capitalization of cryptocurrencies has almost doubled in 2024, reaching a record $3.8 trillion, according to CoinGecko data.
Trump’s administration has already taken steps to cement its crypto-friendly policies. Earlier this month, Trump appointed David Sacks, a former PayPal executive and close associate of Elon Musk, as the White House czar for artificial intelligence and cryptocurrencies. Sacks is expected to play a pivotal role in shaping the administration’s crypto strategy.
In addition, Trump plans to nominate Paul Atkins, a pro-crypto attorney from Washington, as the new head of the Securities and Exchange Commission (SEC). This move is seen as a strong signal of regulatory reforms that could favor crypto businesses and investors.
Institutional Adoption on the Rise
The optimism surrounding bitcoin’s record-breaking performance is also reflected in institutional markets. On Friday, Nasdaq announced that MicroStrategy, the largest corporate holder of bitcoin, would be added to the Nasdaq-100 Index. The inclusion comes after a staggering rise in MicroStrategy’s shares, which have surged more than six-fold in 2024.
MicroStrategy’s aggressive investment in bitcoin has propelled its market value to nearly $94 billion. The company’s success highlights the increasing acceptance of bitcoin among institutional investors and its role as a strategic asset for corporations.
Looking Ahead
With bitcoin smashing records and investor confidence soaring, all eyes are now on the $110,000 mark. Analysts believe Trump’s comments could pave the way for greater adoption of cryptocurrencies at a national level, potentially transforming the financial landscape.
“This is a paradigm shift,” said Sycamore. “If the U.S. does move forward with a bitcoin reserve, it would legitimize cryptocurrencies in ways we haven’t seen before.”
While skeptics like Powell continue to question bitcoin’s stability, the crypto market appears to be riding high on newfound optimism. Trump’s stance has signaled a turning point for digital assets, placing the United States at the forefront of the global crypto movement.
