 "Bitcoin surges above $106,000. Source: Reuters.")
Bitcoin, the world’s biggest and best know cryptocurrency, tasted another historic feat, surpassing $106,000 for the first time on Monday. Like the recent rally, US President-elect Donald Trump is to be responsible for the spike.
Bitcoin hit a high of $106,533 and last traded up 3.2 per cent to $104,462. The spike also helped to boost sentiment in the wider crypto market.
Reasons for bitcoin hitting a new record
1 - Bitcoin strategic reserve in US
Bitcoin surged on Monday when Trump said, “Yes, I think so,” when he was asked whether the US will create a bitcoin strategic reserve similar to its strategic oil reserve.
Trump’s response stoked enthusiasm among crypto bulls.
2 - Trump vows to do something great with crypto
In an interview with CNBC, Trump said: “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.”
In July, when Trump was a Republican presidential candidate, he had promised to create a “strategic national bitcoin reserve” and predicted bitcoin could eclipse gold’s $16 trillion market capitalisation during an appearance at the Bitcoin 2024 conference.
3 - MicroStrategy’s inclusion into Nasdaq
Investor sentiment also got a lift from the inclusion of MicroStrategy into the tech-heavy Nasdaq 100 index on Friday. This is expected to lead to more inflows for the software firm turned bitcoin buyer.
4 - Russia’s Putin praises bitcoin as alternative to foreign currency reserves
Earlier this month, Russian President Vladimir Putin praised bitcoin as an alternative to foreign currency reserves following the seizure of its funds by Western governments in response to Ukraine’s invasion.
Putin said the current US administration was undermining the role of the US 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,” he said.
5 - Many countries considering cryptocurrency strategic reserves
As per data site BitcoinTreasuries, China, the UK, Bhutan, and El Salvador are some countries with significant amounts of bitcoins.
There are several other countries which have also been considering cryptocurrency strategic reserves.
As per data provided by CoinGecko, governments around the world held 2.2 per cent of bitcoin’s total supply as of July with the US possessing nearly 200,000 bitcoins valued at more than $20 billion at current levels.
Bitcoin marches towards $110,000
“We’re in blue sky territory here,” a report by Reuters quoted Tony Sycamore, an analyst at IG as saying.
“The next figure the market will be looking for is $110,000. The pullback that many people were waiting for didn’t happen, because now we’ve got this news," Sycamore further said.
Impact Shorts
More ShortsTrump’s return pushed bitcoin
Trump’s triumph and return to the White House have pushed both bitcoin and crypto as investors wager the incoming administration will usher in a friendlier regulatory environment, boosting sentiment around the alternate currency.
Bitcoin has surged more than 50 per cent since the November 5 US Presidential election result and is up 192 per cent for the year, the Reuters report said.
As per CoinGecko, the total value of the cryptocurrency market has almost doubled over the year so far to hit a record over $3.8 trillion.
With inputs from agencies.