Bitcoin surged to a record high on Monday, crossing the $106,000 mark after President-elect Donald Trump hinted at plans to establish a U.S. bitcoin strategic reserve. The proposal, akin to the nation’s oil reserves, has reinvigorated enthusiasm among crypto investors and triggered bullish sentiment in the market.
Bitcoin, the world’s largest cryptocurrency, peaked at $106,533 before settling at $103,917, marking a 2.6% rise for the day. Its smaller counterpart, ether, also saw modest gains, climbing 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 confidence was further buoyed by news of MicroStrategy’s upcoming inclusion in the Nasdaq 100 index. The move is expected to attract significant institutional inflows for the firm, which has transitioned into one of the largest corporate holders of bitcoin.
Trump’s Shift to Pro-Crypto Policies
The President-elect’s remarks have brought cryptocurrency into sharp focus, marking a significant shift in stance from his earlier dismissal of crypto as a “scam.” Speaking to CNBC, Trump emphasized his vision for the United States to become the “crypto capital of the planet.”
“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 said. When asked about establishing a bitcoin reserve similar to the strategic oil reserve, Trump responded, “Yeah, I think so.”
Governments worldwide have been accumulating bitcoin as part of their national reserves. Data from CoinGecko shows that global governments held 2.2% of bitcoin’s total supply as of July, with the United States owning nearly 200,000 bitcoins, valued at over $20 billion at current prices. Other significant holders include China, the United Kingdom, Bhutan, and El Salvador.
Global Perspective and Skepticism
Trump’s proposal comes amid a broader global debate over cryptocurrency reserves. Earlier this month, Russian President Vladimir Putin criticized the U.S. for undermining the dollar’s role as the global reserve currency, which he argued has forced countries to explore alternatives like cryptocurrencies.
“For example, bitcoin, who can prohibit it? No one,” Putin stated.
Despite the excitement, analysts remain cautious. Federal Reserve Chair Jerome Powell recently compared bitcoin to gold, underscoring its volatility. Chris Weston, head of research at Pepperstone, warned that while Trump’s comments provide hope, implementing a bitcoin reserve would require significant planning.
“I think we still need to be cautious on a BTC (bitcoin) strategic reserve, and at least consider that this is not likely to happen anytime soon,” Weston said. “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.”
Market Rally Accelerates
Bitcoin’s rally has been supercharged since the November 5 election, which saw Trump and other pro-crypto candidates secure key victories. The cryptocurrency has surged over 50% since the election, and its value has climbed 192% for the year.
The total cryptocurrency market has also seen significant growth, nearly doubling in value to reach $3.8 trillion, according to CoinGecko.
Trump’s pro-crypto stance has been underscored by his key appointments. He recently named former PayPal executive David Sacks, a close ally of Elon Musk, as the White House czar for artificial intelligence and cryptocurrencies. Trump also announced plans to nominate Washington attorney Paul Atkins, a known crypto advocate, to lead the Securities and Exchange Commission.
MicroStrategy Drives Optimism
In another boost to investor sentiment, MicroStrategy will officially join the Nasdaq 100 index on December 23, as announced by Nasdaq last Friday. Led by CEO Michael Saylor, the software firm has evolved into a major bitcoin investor and now holds the largest corporate stake in the cryptocurrency.
MicroStrategy’s stock has surged over sixfold this year, driving its market value to nearly $94 billion. Its inclusion in the Nasdaq 100 is expected to attract further institutional buying, enabling the firm to acquire more bitcoin through debt and equity financing.
“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,” said Matthew Dibb, chief investment officer at Astronaut Capital.
Crypto at the Forefront
Trump’s shift toward embracing cryptocurrencies has injected fresh optimism into the market, propelling bitcoin to unprecedented highs. While analysts urge caution over the feasibility of a strategic reserve, the President-elect’s comments signal a dramatic change in the U.S.’s approach to digital assets, setting the stage for what many believe could be a transformative era for cryptocurrencies.
