Bitcoin Rise above $106000 on Strategic Reserve Hopes

Bitcoin Rise Above $106000

Bitcoin jumped to a record high above $106,000 on Monday after President-elect Donald Trump suggested he plans to create a U.S. bitcoin strategic reserve similar to its strategic oil reserve, stoking the enthusiasm of crypto bulls.

Bitcoin, the world’s biggest and best known cryptocurrency, hit a high of $106,533 and last traded up 3.2% to $104,462. Smaller crypto ether rose 1.5% to $3,965.

“We are in blue sky territory here,” said Tony Sycamore, 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.”

The investor sentiment was further boosted by including MicroStrategy in the Nasdaq 100 index that focuses on technology. It is more likely to bring more inflows to the software company that became a buyer of bitcoin.

Trump Administration Interested: Bitcoin Rise above $106000 on Strategic Reserve Hopes

Bitcoin and other cryptocurrencies have gained limelight as investors bet the Trump administration to be in the books soon will usher a friendly regulatory environment that would raise sentiments surrounding the alternative currency. Bitcoin has gained 192% in the year.

“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 told CNBC late last week.

When asked if he plans to build a crypto reserve similar to oil reserves, Trump said: “Yeah, I think so.”

Data provider CoinGecko said that governments worldwide held 2.2 percent of bitcoin’s total supply as of July, with the United States possessing nearly 200,000 bitcoins worth more than $20 billion at current levels.

Other countries with a significant amount of bitcoins include China, UK, Bhutan, and El Salvador, data site BitcoinTreasuries showed.
Some other countries have also been weighing the idea of cryptocurrency strategic reserves.

Earlier this month, Russian President Vladimir Putin said the current U.S. administration was undermining the role of the U.S. dollar as the 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 prohibit it? No one,” Putin said.

However, there are also skeptics, with Federal Reserve Chair Jerome Powell likening bitcoin to gold earlier this month. Analysts also point out that any such move will take time to implement.

“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.

“Of course, any comment from Trump that offers an increased degree of hope that plans for a strategic reserve is evolving are an obvious tailwind, but this would come with consequences which would need to be carefully considered and well telegraphed to market players.”

CRYPTO BOOST: Bitcoin Rise above $106000 on Strategic Reserve Hopes

Bitcoin has risen over 50% since the Nov. 5 election that elected Trump, along with many other pro-crypto candidates. The total value of the cryptocurrency market has nearly doubled over the year so far to reach a record of over $3.8 trillion, CoinGecko said.

Trump, who previously labeled crypto a scam, used the digital assets throughout his campaign, promising to make the United States the “crypto capital of the planet.”
Trump this month appointed David Sacks, a close friend of Trump adviser and megadonor Elon Musk, as a White House czar for artificial intelligence and cryptocurrencies.

Trump also said he would nominate pro-crypto Washington attorney Paul Atkins to head the Securities and Exchange Commission.

On Friday, exchange operator Nasdaq said MicroStrategy will be added to the Nasdaq-100 Index, with the change coming into effect before the market opens on Dec. 23.

MicroStrategy, an aggressive investor in the world’s largest crypto asset, has seen its shares soar more than six-fold this year, taking its market value to almost $94 billion. It is now the largest corporate holder of the cryptocurrency.

Pepperstone’s Weston said the market is “front running the idea that Michael Saylor (MicroStrategy CEO) will capitalize on the likely rally in the MicroStrategy share price, given the impending passive flows from its inclusion into the NAS100 – where he’ll presumably sell shares and purchase more bitcoin.”

Bitcoin Rise above $106000 on Strategic Reserve Hopes

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