Bitcoin’s record-breaking rally continued on Monday, with the cryptocurrency soaring to a session high of $107,148, driven by renewed optimism over President-elect Donald Trump’s plans to establish a U.S. bitcoin strategic reserve. The cryptocurrency closed at $106,877, marking a 5.43% increase from Friday’s levels.
The surge in investor sentiment was further bolstered by Nasdaq’s announcement that MicroStrategy, a company renowned for its aggressive bitcoin investments, will be included in the Nasdaq-100 Index later this month. This move is expected to attract substantial institutional inflows into the firm, further strengthening its position in the cryptocurrency market.
Bitcoin’s Meteoric Rise
Bitcoin, the world’s most prominent cryptocurrency, has surged by approximately 150% in 2024, buoyed by growing optimism around the incoming Trump administration’s crypto-friendly policies. Ether, the second-largest digital currency, also gained 1.85%, trading at $3,975.70.
“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.”
During his campaign, Trump pledged to make the U.S. the global leader in cryptocurrency innovation. Speaking to CNBC last week, Trump said, “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.”
When asked about plans for a bitcoin strategic reserve, Trump responded, “Yeah, I think so,” echoing similar sentiments expressed earlier this year.
Governments Eye Cryptocurrency Reserves
The concept of governments holding bitcoin reserves is not entirely new. As of July, global governments collectively held 2.2% of bitcoin’s total supply, according to CoinGecko. The United States leads the pack, possessing nearly 200,000 bitcoins valued at over $20 billion.
Other nations, including China, the UK, Bhutan, and El Salvador, have also made notable investments in bitcoin. Russian President Vladimir Putin recently criticized the U.S. dollar’s dominance, arguing that political misuse of the currency has forced nations to explore alternative assets, including cryptocurrencies.
“For example, bitcoin, who can prohibit it? No one,” Putin said.
Strategic Reserve Challenges
Despite the enthusiasm, skepticism remains. Federal Reserve Chair Jerome Powell likened bitcoin to gold, emphasizing its speculative nature. Analysts caution that implementing a bitcoin strategic reserve would be a complex and time-consuming process.
“I think we still need to be cautious on a BTC strategic reserve, and at least consider that this is not likely to happen anytime soon,” said Chris Weston, head of research at Pepperstone.
He added, “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.”
The Crypto Momentum
Bitcoin’s rally has been part of a broader surge in the cryptocurrency market, which has doubled in value over the year to surpass $3.8 trillion, according to CoinGecko. Trump’s pro-crypto stance, including his appointment of former PayPal executive David Sacks as White House czar for artificial intelligence and cryptocurrencies, has further cemented investor confidence.
Trump also plans to nominate Washington attorney Paul Atkins, known for his pro-crypto views, to lead the Securities and Exchange Commission.
As bitcoin continues its upward trajectory, investors and regulators alike are keeping a close watch on how these developments unfold under the new administration.
