Bitcoin has reached a new record high, soaring to $97,852 on Binance. This cryptocurrency has increased by 5% in the past 24 hours and has impressively risen by 43% in the last 16 days since November 5. The momentum shows no signs of slowing down as BTC prices continue to rise steadily. Several key factors are driving this remarkable price surge:
#1 US Strategic Bitcoin Reserve Trade
After Donald Trump's victory in the U.S. presidential election, market sentiment changed significantly. The "Trump Trade" initially evolved into the "U.S. Bitcoin Reserve Trade," driven by speculation that President-elect Trump could establish a Strategic Bitcoin Reserve Fund (SBR). This followed his commitment at the Bitcoin 2024 conference in Nashville.
Industry figures like David Bailey, CEO of BTC Inc and Trump’s campaign advisor, and Dennis Porter, CEO of Satoshi Act Fund, have hinted at the possibility of SBR becoming a reality. Both urged that SBR must be established within the first 100 days of Trump's presidency through an executive order. They warned that the U.S. risks falling behind in the global race to accumulate BTC.
Bailey revealed on November 9, "At least one nation-state has been actively buying Bitcoin and is now among the top 5 countries holding the most. I hope we will hear news from them soon." He emphasized his certainty with a meme, stating that his information is based on knowledge, not speculation. Mike Novogratz, CEO of Galaxy Digital, confirmed in a recent interview with Bloomberg TV that "countries have been and are buying BTC in large volumes."
"The U.S. Bitcoin Reserve Trade" is expected to continue until Trump’s inauguration on January 20. It remains unclear whether Trump will fulfill his promise, potentially transferring over 208,000 BTC seized by law enforcement into the reserve or even passing Senator Cynthia Lummis's proposed Bitcoin Act to purchase 1 million BTC over five years.
#2 The potential appointment of a 'crypto czar'
A leak on Wednesday revealed that President-elect Trump’s team is discussing creating a new position at the White House dedicated to Bitcoin and cryptocurrency policy. Sources familiar with the transition efforts indicated that candidates are being vetted for this role.
If established, this would be the first position at the White House dedicated to Bitcoin and cryptocurrencies, highlighting the influence this emerging industry could hold in the upcoming administration. It is unclear whether this role will be a senior White House staff position or a "crypto czar" overseeing policy and regulation across the federal government. Industry supporters are pushing for this role to have a direct line to Trump - a major news item for the entire sector.
#3 Launch of Bitcoin ETF options
The introduction of Bitcoin ETF options has had a significant impact on the market. BlackRock's iShares BTC Trust (IBIT) options, launched on November 19, 2024, saw unprecedented nominal exposure of $1.9 billion on their first trading day. Bloomberg ETF expert James Seyffart stated, "The final total for the first day of IBIT options fell just short of $1.9 billion in nominal exposure traded through 354 thousand contracts. 289 thousand were Call options and 65 thousand were Put options. That’s a ratio of 4.4: 1. These options are almost certainly part of the move toward Bitcoin’s new record high today."
Jeff Park, Head of Alpha Strategy at Bitwise Invest, recently highlighted the game-changing nature of Bitcoin ETF options:
With the SEC's approval to list and trade Bitcoin ETF options, we are on the brink of witnessing the most extraordinary 'vol' increase in financial history. For the first time, the nominal value of Bitcoin will be 'partially stored' through ETF options. This is the biggest advancement for the cryptocurrency market.
Park explains that Bitcoin ETF options provide a regulated market, where the Options Clearing Corporation (OCC) protects members from counterparty risk, allowing the overall concept exposure to Bitcoin to increase exponentially. He emphasizes that this could lead to a recursive explosive effect on Bitcoin prices due to unique volatility characteristics and the "volatility smile."
#4 Surge in the spot and Bitcoin ETF market
The latest price surge is also driven by significant activity in the spot market. Large spot buy orders have pushed prices higher, with the influx of funds into BTC ETFs yesterday being a key factor. The inflow reached $773.4 million, with BlackRock contributing $626.5 million, Fidelity $133.9 million, Bitwise $9.2 million, and ARK Invest $3.8 million. Over the past three days, U.S. spot Bitcoin ETFs have purchased an astounding $1.856 billion worth of Bitcoin.
The total net asset value of U.S. spot Bitcoin ETFs has exceeded $100 billion. Twelve Bitcoin ETFs, including those from BlackRock and Fidelity, were launched in January and reached this milestone in just ten months. At the time of the press report, BTC was trading at $96,920.
