Bitcoin surged to a record high above $106,000 on Monday after President-elect Donald Trump suggested that he plans to create a U.S. Bitcoin strategic reserve, propelling crypto market hopes.
The world’s biggest cryptocurrency hit a high of $106,533 earlier in the session, trading up 0.73 percent to $105,186, as of 6:23 GMT. Smaller crypto Ethereum gained 0.42 percent to $3,972.8.
Bitcoin gains 192 percent this year
The crypto market has re-emerged in the spotlight this year following Donald Trump’s election as president. Investors are betting that the incoming Trump administration will ensure a friendlier regulatory environment, boosting market sentiment. Bitcoin has gained 192 percent so far this year.
Since the November 5 election, Bitcoin has surged more than 50 percent. The total value of the cryptocurrency market has almost doubled in the last year, hitting a record over $3.8 trillion, according to CoinGecko.
Trump embraced digital assets during his campaign, promising to make the United States the “crypto capital of the planet.” Trump also said he would nominate pro-crypto Paul Atkins to head the Securities and Exchange Commission. The crypto market is optimistic about the outlook of Bitcoin, expecting the cryptocurrency to rise to $110,000 next.
Investor sentiment also rose after the inclusion of MicroStrategy into the Nasdaq 100 index which will likely lead to more inflows for the software firm. On Friday, Nasdaq said MicroStrategy will be added to the Nasdaq-100 Index, with the change coming into effect before the market opens on December 23. MicroStrategy 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.
Despite the overall market optimism, analysts noted the risks of holding a Bitcoin strategic reserve, stating that it is not likely to happen anytime soon.
Read| Bitcoin MENA 2024: Eric Trump confident that Bitcoin will hit $1 million
Governments buy crypto
According to data provider CoinGecko, governments around the world held 2.2 percent of Bitcoin’s total supply in July, with the United States possessing nearly 200,000 Bitcoins worth over $20 billion at current prices. China, the UK, Bhutan and El Salvador are the other countries with significant amounts of Bitcoin, said BitcoinTreasuries.
Governments have considered strategic Bitcoin reserves for a while now. 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 crypto.
Speaking of the market surge and the upcoming policy shifts under Trump’s crypt-friendly administration, Eric Trump, prominent business leader and son of U.S. President-elect Donald J. Trump, said that he is confident that Bitcoin will hit $1 million. “Bitcoin is a fundamental shift in the way we think about money, wealth, and the future…It’s a shift in how our companies receive money,” he stated.
“The revolution is not coming, it’s already here,” he added.
