Bitcoin Surges Past $107,000 as Trump Reiterates Plans for National Bitcoin Reserve
Bitcoin’s price surged past the $107,000 mark on Monday (Dec. 16) after President-elect of the United States, Donald Trump, once again declared his intention to open a national bitcoin strategic reserve, similar to the country’s oil reserves. Trump’s statement heightened the already high excitement among investors in the digital currency market.
Additionally, investor sentiment was boosted by the inclusion of MicroStrategy, a software company and bitcoin investor, in the Nasdaq 100 stock index. This index membership could allow MicroStrategy to raise more capital, which could then be invested in the world’s largest digital currency.
Bitcoin’s price reached an all-time high of $107,148, a more than 5% increase from Friday’s close, pulling the prices of many other cryptocurrencies along with it.
As of 6 a.m. Vietnam time, bitcoin was trading above $106,000, up more than 2% from 24 hours earlier and nearly 9% from a week ago, according to data from Coinmarketcap.com. The price of the world’s second-largest cryptocurrency, ethereum, reached over $4,020, a nearly 3% increase from the previous day and an over 8% jump from the previous week.
“There’s no limit to bitcoin’s price at this point. The next number the market will look for is $110,000. A pullback that many were expecting hasn’t materialized as we’ve just received more positive news,” said Tony Sycamore, an analyst at IG, to Reuters.
Bitcoin, and cryptocurrencies in general, have been in the spotlight as investors believe the incoming Trump administration will create a more friendly legal environment for the field. Bitcoin’s price has risen about 150% since the beginning of the year.
“We’re going to do something great with cryptocurrencies because we’re not going to let China, or anyone else, get ahead of us. Not just China, but other countries are embracing digital currencies, but we want to be the leader,” Trump said in an interview with CNBC last weekend.
When asked if he planned to build a digital currency reserve similar to the oil reserve, Trump replied, “Yes, I think so.” Trump had floated the idea of building such a reserve earlier this year.
According to data provider CoinGecko, governments around the world held 2.2% of the total bitcoin supply as of July 2024, with the United States owning nearly 200,000 bitcoins worth over $20 billion at current prices. China, the United Kingdom, Bhutan, and El Salvador are other countries holding significant amounts of bitcoin, according to the BitcoinTreasuries data page.
It’s not just the United States that is considering establishing a digital currency reserve. Russian President Vladimir Putin said earlier this month that the current US administration is undermining the role of the US dollar as a reserve currency in the global economy by using it for political purposes, forcing many countries to turn to alternative assets, including cryptocurrencies.
“Take bitcoin, for example, who can prohibit it? No one,” said the Kremlin leader.
However, analysts also pointed out that building a bitcoin reserve would take time. “I think we still need to be cautious about the idea of a bitcoin strategic reserve and, at the very least, see that this is unlikely to happen anytime soon,” said Chris Weston, head of research at Pepperstone.
“Any comments from Trump that give hope that plans for a crypto strategic reserve are progressing will be a clear positive for bitcoin prices. However, this will come with consequences that investors need to carefully evaluate,” Weston added.
Bitcoin’s price has risen more than 50% since Trump’s reelection on Nov. 5. According to data from CoinGecko, the total value of the global cryptocurrency market has nearly doubled in the past year, reaching a record high of over $3.8 trillion.
Trump, who once called cryptocurrencies a scam, has adopted a friendly stance towards digital assets during this year’s presidential campaign, promising to make the United States the “planet’s crypto headquarters.”
This month, Trump appointed Davi Sacks, a former PayPal executive and a close associate of both Trump and Elon Musk, as a senior AI and digital currency advisor to the White House. Musk has established a close relationship with Trump by endorsing and heavily funding the Republican’s White House bid.
Trump also stated that he would nominate Washington state attorney Paul Atkins, a cryptocurrency supporter, to head the Securities and Exchange Commission (SEC).
On Friday, the operator of the Nasdaq exchange announced that MicroStrategy would be added to the Nasdaq 100 on Dec. 23. MicroStrategy, an active bitcoin investor, has seen its stock price increase more than sixfold this year, bringing its market capitalization to nearly $94 billion. Currently, MicroStrategy is the enterprise investor holding the most bitcoin.
According to Astronaut Capital digital asset management company CEO Matthew Dibb, following MicroStrategy’s entry into the Nasdaq 100, investors will buy the company’s stock to reflect its weight in the index. This will likely increase the stock price, allowing the company to raise more capital through debt and equity issuance, which can then be used to purchase more bitcoin.
“This event has the potential to drive up the price of spot bitcoin,” Dibb said.
MicroStrategy’s stock price closed up 4.2% on Monday.
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