Bitcoin soared to a record high above $106,000 on Monday following comments from U.S. President-elect Donald Trump suggesting plans to establish a U.S. Bitcoin Strategic Reserve, akin to the nation’s Strategic Petroleum Reserve.
This announcement fueled optimism among cryptocurrency investors and sent prices skyrocketing.
The world’s largest cryptocurrency hit an all-time high of $106,533 before settling at $104,462, marking a 3.2% gain.
Ethereum, the second-largest cryptocurrency, also saw gains, rising 1.5% to $3,965.
Market enthusiasm on the rise
Investor confidence was further boosted by the inclusion of MicroStrategy, a major Bitcoin holder, in the Nasdaq 100 index. This development is expected to attract increased institutional inflows, adding to Bitcoin’s momentum.
“This is uncharted territory for Bitcoin. The market now has its sights set on the $110,000 mark. The anticipated pullback never materialized due to the overwhelming bullish sentiment driven by this news,” said Tony Sycamore, an analyst at IG.
Bitcoin’s meteoric rise aligns with expectations that the incoming Trump administration will adopt a more favorable regulatory approach to cryptocurrencies. Trump’s remarks to CNBC last week hinted at an ambitious agenda:
“We’re going to do something great with crypto because we don’t want China or anyone else—others are embracing it—and we want to lead,” he said.
- When pressed on whether he envisioned a strategic reserve for Bitcoin, Trump responded affirmatively: “Yeah, I think so.”
- The idea of a national Bitcoin reserve has gained traction as governments globally begin to explore similar strategies.
- Data from CoinGecko reveals that governments currently hold 2.2% of Bitcoin’s total supply, with the U.S. owning nearly 200,000 Bitcoins valued at over $20 billion. Other notable holders include China, the UK, Bhutan, and El Salvador.
Global shift toward crypto reserves
The concept of cryptocurrency reserves is not new. Earlier this month, Russian President Vladimir Putin criticized the U.S. dollar’s diminishing role as a global reserve currency, citing its politicization. “Countries are turning to alternative assets, including Bitcoin. No one can prohibit it,” Putin remarked.
However, despite the excitement, skepticism remains. Federal Reserve Chair Jerome Powell recently likened Bitcoin to gold, suggesting its role may be more speculative than practical.
Chris Weston, head of research at Pepperstone, expressed caution:
“While Trump’s comments provide a tailwind for Bitcoin, the establishment of a strategic reserve would be a complex process with far-reaching consequences. It’s not something likely to happen soon.”
What you should know
Bitcoin has surged more than 50% since the Nov. 5 election that saw Trump elected along with many other pro-crypto candidates. The total value of the cryptocurrency market has almost doubled over the year so far to hit a record over $3.8 trillion, according to CoinGecko.
- Trump – who once labelled crypto a scam – embraced digital assets during his campaign, promising to make the United States the “crypto capital of the planet.”
- Trump this month named a White House czar for artificial intelligence and cryptocurrencies, former PayPal executive David Sacks, a close friend of Trump adviser and megadonor Elon Musk.
- Trump also said he would nominate pro-crypto Washington attorney Paul Atkins to head the Securities and Exchange Commission.
- In Nigeria, stakeholders have urged the Nigerian government to take proactive actions to benefit from the impending crypto boom in the global market under a pro-crypto U.S. President, Donald Trump.
According to the President of the Stakeholders in Blockchain Association of Nigeria (SiBAN), Mr. Obinna Iwuno, in a statement shared with Nairametrics on Tuesday, said Nigerian regulators would need to take urgent actions on these steps to avoid losing value to foreign markets.