On Monday (December 16), buoyed by President-elect Donald Trump's reaffirmation of plans to establish a 'Bitcoin Strategic Reserve' similar to the U.S. Strategic Petroleum Reserve, Bitcoin's historic rally broke through $107,000, further igniting enthusiasm among cryptocurrency investors.
Meanwhile, the Nasdaq operator announced that MicroStrategy (MSTR.O) will be included in the tech-heavy Nasdaq 100 Index. This news is expected to bring more funding into the software company, which has transformed into a Bitcoin buyer, further driving up its stock price.
Bitcoin, the world's largest cryptocurrency, rose to an intraday high of $107,793.07 on Monday, with the latest price at $106,494.37.
IG analyst Tony Sycamore stated, 'We have entered the 'blue sky area', and the next market focus is the $110,000 mark. The correction many were expecting has not occurred, as this news from Trump has changed market expectations.'
Trump pushes for policy friendliness, benefiting the Bitcoin market
The Bitcoin and cryptocurrency market has become the focus, with investors betting that the incoming Trump administration will create a more favorable regulatory environment, boosting market sentiment towards this alternative currency. By the end of 2024, the price of Bitcoin has risen by approximately 150%.
Trump told CNBC last week, 'We are going to do some great things with cryptocurrency because we don't want other countries to get ahead of us.' When asked if he plans to establish a cryptocurrency reserve similar to the oil reserves, Trump replied, 'Yes, I think so.' He had expressed similar views earlier this year.
According to data provider CoinGecko, as of July, governments around the world hold 2.2% of the total supply of Bitcoin. The United States holds nearly 200,000 Bitcoins, worth over $20 billion at current prices.
Global competition for cryptocurrency strategic reserves
Other countries are also considering establishing cryptocurrency strategic reserves.
Nevertheless, skepticism remains in the market. Federal Reserve Chairman Jerome Powell likened Bitcoin to gold this month, stating that its primary use is as a store of value. Additionally, analysts pointed out that plans similar to the 'Bitcoin Strategic Reserve' may take a long time to implement.
Pepperstone's research director Chris Weston stated, 'I think we still need to be cautious about the Bitcoin Strategic Reserve, at least considering that it may not be realized in the short term.' He added, 'Of course, any comments from Trump suggesting that this plan is progressing would provide a significant upward boost to the market, but the subsequent impacts of this plan need to be carefully considered and clearly communicated to the market.'
Unprecedented enthusiasm in the cryptocurrency market
Since Trump was elected on November 5, the price of Bitcoin has risen by more than 50%. According to CoinGecko, the total market capitalization of the cryptocurrency market has nearly doubled this year, reaching a record $3.8 trillion.
Bitcoin Technical Analysis
Economies.com stated that after Bitcoin's price dropped to the level of $104,060 in previous trading days, it has risen again, resuming an upward trend and moving towards achieving the next target of $110,000.
Unless it falls below $104,060 and maintains a daily closing price, it will continue to indicate a bullish trend for the foreseeable future.
