By Kevin Buckland and Ankur Banerjee
(Reuters) -Bitcoin’s record rally surpassed $107,000 on Monday after President-elect Donald Trump reiterated that he plans to create a U.S. strategic bitcoin reserve similar to its strategic oil reserve, stoking enthusiasm among bitcoin bulls. cryptocurrencies.
Investor sentiment was also boosted by MicroStrategy’s inclusion in the technology sector, which will likely generate more inflows for the software company turned bitcoin buyer.
The world’s largest and best-known cryptocurrency extended its gains to a session high of $107,148 and most recently stood at $106,877, up 5.43% from Friday night. The second digital currency, ether, rose 1.85% to $3,975.70.
“We’re in blue sky territory here,” said IG analyst Tony Sycamore. “The next figure the market will look for is $110,000. The pullback that many people were expecting simply didn’t happen, because now we have this news.”
Bitcoin and cryptocurrencies have catapulted into the spotlight as investors bet that the incoming Trump administration will usher in a friendlier regulatory environment, boosting sentiment around the altcoin. Bitcoin will rise by approximately 150% in 2024.
“We’re going to do something great with cryptocurrencies because we don’t want China or anyone else (not just China but others adopting it) and we want to be the head of it,” Trump told CNBC late last week.
When asked if he plans to build a crypto reserve similar to oil reserves, Trump said: “Yes, I think so.” He advocated the same earlier this year.
Governments around the world held 2.2% of the total bitcoin supply in July, according to data provider CoinGecko, and the United States holds nearly 200,000 bitcoins valued at more than $20 billion at current levels.
China, the United Kingdom, Bhutan and El Salvador are the other countries with a significant amount of bitcoins, data site BitcoinTreasuries showed.
Other countries have also been considering strategic cryptocurrency reserves.
Russian President Vladimir Putin said earlier this month that the current US administration was undermining the US dollar’s role 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.
There are skeptics, however: Federal Reserve Chairman Jerome Powell compared bitcoin to gold earlier this month. Analysts also point out that implementing any such measure will take time.
“I think we still need to be cautious about a strategic BTC reserve, and at least consider that this won’t happen anytime soon,” said Chris Weston, head of research at Pepperstone.
“Of course, any comments from Trump that offer a greater degree of hope that plans for a strategic reserve are evolving are an obvious tailwind, but this would bring consequences that would need to be carefully considered and well telegraphed to market players.” .
CRYPTO BOOST
Bitcoin has risen more than 50% since the November 5 election in which Trump was elected along with many other pro-crypto candidates. According to CoinGecko, the total value of the cryptocurrency market has nearly doubled so far this year to reach a record high of more than $3.8 trillion.
Trump, who once called cryptocurrencies a scam, embraced digital assets during his campaign and promised to make the United States the “crypto capital of the planet.”
Trump this month named a White House czar for artificial intelligence and cryptocurrencies, former PayPal (NASDAQ) executive David Sacks, a close friend of Trump adviser and mega-donor Elon Musk.
Trump also said he would nominate pro-cryptocurrency Washington lawyer Paul Atkins to head the Securities and Exchange Commission.
On Friday, exchange operator Nasdaq said MicroStrategy, led by CEO Michael Saylor, will be added to the Nasdaq-100 index and that the change will take effect before the market opens on December 23.
MicroStrategy, an aggressive investor in the world’s largest crypto asset, has seen its shares rise more than six-fold this year, taking its market value to nearly $94 billion. It is now the largest corporate holder of the cryptocurrency.
As part of the Nasdaq 100, investors would buy MicroStrategy shares to mirror the holdings of the broader index, thus increasing the value of the shares and allowing the company to buy more cryptocurrencies, through debt and equity offerings, Matthew Dibb, director of investments. at crypto asset manager Astronaut Capital, he said.
“The inclusion seems a bit unexpected, but that hasn’t stopped the excitement of what many believe is the beginning of a capital cycle that could potentially drive up the spot price of bitcoin,” he said.
MicroStrategy shares rose 4.2% on Monday.
