Bitcoin hit a record high above $106,000 on Monday after US President-elect Donald Trump suggested he wanted to create a strategic bitcoin reserve for the country similar to the strategic oil reserve maintained by Washington, fueling enthusiasm of cryptocurrency investors.
Bitcoin, the world’s largest and best-known cryptocurrency, reached $106,533 and was trading up 2.6% at 9:15 a.m. (Brasilia time) at $103,917. Ether advanced 0.4% to $3,918.
“We’re in blue sky territory here,” said IG analyst Tony Sycamore. “The next thing the market will be looking for is $110,000. The pullback that many people were expecting simply hasn’t happened because now we have this news.”
Investor confidence was also boosted by the inclusion of MicroStrategy shares in the Nasdaq 100 index, which is likely to lead to more investor inflows for the software company that has become a voracious buyer of bitcoin.
Over the year, bitcoin has gained 192% amid investor optimism that Trump will form a government that will promote a friendlier regulatory environment for cryptocurrencies.
“We’re going to do something great with cryptocurrencies because we don’t want China or anyone else — not just China, but other people — and we want to be the leader,” Trump told CNBC late last week.
When asked if he intends to build a cryptocurrency reserve similar to oil reserves, Trump replied: “Yes, I think so.”
According to data provider CoinGecko, governments around the world held 2.2% of the total bitcoin supply as of July, with the United States holding nearly 200,000 bitcoins, valued at more than $20 billion at current levels.
According to the BitcoinTreasuries website, China, the United Kingdom, Bhutan and El Salvador are the other countries with a significant amount of bitcoin.
Other countries are also considering strategic cryptocurrency reserves.
Russian President Vladimir Putin said earlier this month that the current US administration is undermining the role of the US dollar as a reserve currency in the global economy by using it for political purposes, forcing many countries to turn to alternative assets, including cryptocurrencies. “For example, Bitcoin, who can ban it? Nobody,” Putin said.
However, there are skeptics. “I think we still need to be cautious about a strategic reserve of BTC and at least consider that this is unlikely to happen anytime soon,” said Chris Weston, head of research at Pepperstone.
“Of course, any comment from Trump offering a greater degree of hope that plans for a strategic reserve are evolving is an obvious plus, but it would have consequences that would need to be carefully considered and well communicated to market participants.”
INCREASE IN CRYPTO
Bitcoin is up more than 50% since Trump’s election on Nov. 5. According to CoinGecko, the total value of the cryptocurrency market has nearly doubled over the year, reaching a record high of more than $3.8 trillion.
Trump, who previously called cryptocurrencies a fraud, embraced digital assets during his campaign, vowing to make the United States the “cryptocurrency capital of the world.”
On Friday, Nasdaq said MicroStrategy shares will be added to the Nasdaq-100 index starting Dec. 23.
MicroStrategy, an aggressive investor in bitcoin, has seen its shares rise more than sixfold this year, bringing its market value to nearly $94 billion. Currently, the company is the largest cryptocurrency holder among companies in the world.
As part of the Nasdaq 100, investors will purchase MicroStrategy shares to mirror the broader index’s holdings, thereby boosting the value of the company’s shares and allowing the company to purchase more cryptocurrencies through debt and equity offerings, said Matthew Dibb, chief investment officer of assets. manager Astronaut Capital.
“The inclusion seems a little unexpected, but that hasn’t stopped the enthusiasm for what many believe to be the start of a capital cycle that could potentially drive bitcoin’s spot price higher,” he said.
Source: Terra
Rose James is a Gossipify movie and series reviewer known for her in-depth analysis and unique perspective on the latest releases. With a background in film studies, she provides engaging and informative reviews, and keeps readers up to date with industry trends and emerging talents.
