Bitcoin surged to a record high above $106,000 on Monday, fueled by President-elect Donald Trump’s proposal to create a U.S. bitcoin strategic reserve, akin to the oil reserve, boosting investor enthusiasm. Bitcoin reached $106,533 before settling at $104,462, up 3.2%. Ether, the second-largest cryptocurrency, rose 1.5% to $3,965.
“This is blue sky territory,” said Tony Sycamore, an analyst at IG. “The market’s next target is $110,000.” A pullback many anticipated failed to materialize amid this bullish news.
Investor sentiment was further bolstered by Nasdaq’s inclusion of MicroStrategy, a major corporate bitcoin holder, into the Nasdaq-100 index. Analysts expect this move to attract more inflows for the firm, whose shares have risen six-fold this year.
Trump, who previously criticized crypto, has now embraced it, pledging to make the U.S. the “crypto capital of the planet.” He confirmed plans to establish a bitcoin reserve to maintain a competitive edge globally. Currently, the U.S. government holds nearly 200,000 bitcoins, valued at over $20 billion. Other nations like China, Bhutan, and El Salvador also hold significant reserves.
Globally, the shift toward cryptocurrencies is gaining momentum. Russian President Vladimir Putin recently criticized the U.S. dollar’s dominance and highlighted bitcoin’s potential as an alternative asset.
Skeptics remain cautious, with Federal Reserve Chair Jerome Powell comparing bitcoin to gold and warning of the complexities of creating a reserve. Still, the market remains optimistic, with bitcoin up 192% this year, and Trump’s pro-crypto stance, including appointing industry-friendly figures like David Sacks and Paul Atkins, further energizing the space.
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