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Bitcoin surges amid Fed rate cut expectations, Trump’s crypto reserve plans
Bitcoin hit a new all-time high on Monday as investors awaited an expected interest rate cut by the Federal Reserve later this week. Additionally, President-elect Donald Trump has indicated plans to create a strategic bitcoin reserve in the U.S. similar to its strategic oil reserve, sparking excitement in the crypto community.
Investor sentiment also received a boost from the recent news of MicroStrategy entering the Nasdaq 100 index, which is likely to lead to more inflows into the software company turned bitcoin buyer.
Notably, Bitcoin is up 151% year-to-date. Recently, Trump, in an interview with CNBC, revealed plans to ‘do something big with crypto’, while also emphasizing on leading the dominance, leaving behind countries like China.
When asked if he plans to build a crypto reserve similar to oil reserves, Trump said, “Yes, I think so.” Notably, China, the United Kingdom, Bhutan, and El Salvador are the other countries with a significant amount of bitcoin. Other countries have also been considering strategic cryptocurrency reserves.
Earlier this month, Russian President Vladimir Putin said the US was undermining the dollar's role as a global reserve currency by using it for political purposes, prompting many countries to look to alternatives like cryptocurrencies.
There are critics, such as Chris Weston, head of research at Pepperstone, who shared: “I think we still need to be cautious about a strategic reserve of BTC, and at least consider that it is not likely to happen any time soon.”
Bitcoin has soared more than 50% since the November 5 election that saw a pro-crypto victory. The total value of the cryptocurrency market has nearly doubled over the year so far, reaching a record high of more than $3.8 trillion. Trump also nominated pro-crypto Paul Atkins to head the SEC.
Bitcoin Hits Another Milestone!
Bitcoin has hit yet another huge milestone in its splendid Q4 of 2024, with its Energy Value metric reaching $100,000. Bitcoin’s Energy Value SMA has surged to nearly $100,500 today. The raw metric for the chart has nearly hit $105,000, as demonstrated by Edwards. Charles Edwards of Capriole Investments had predicted that Bitcoin’s Energy Value would hit $100,000 by 2025, back in early March 2020.
Additionally, investors are expecting the Fed to cut interest rates this week during its two-day policy meeting, which will conclude on Wednesday. The CME FedWatch tool currently predicts a 96% chance of a 25 basis point cut. This would likely be bullish for Bitcoin’s price.
