Bitcoin has reached new highs, surpassing $104,900, as its rally this year continues to be supported by several positive factors, including the impact of President-elect Donald Trump on markets. Bitcoin’s value is up by 3.5% on the day, following a new record price of $105,004. This increase amounts to a gain of over 140% in the past year and a 15% increase over the past 30 days, according to data from CoinGecko.
Following Trump’s presidential victory in early November, the cryptocurrency and the broader crypto market saw significant growth. Although uncertainty remains about whether the new policies proposed for digital assets will come to fruition, recent developments are fueling momentum. Lucas Schweiger, Digital Asset Research Manager at banking group Sygnum, noted that although campaign promises to make the US “the crypto capital of the planet” may be seen as political posturing, the establishment of the Crypto Advisory Council, along with rumors of Trump meeting several key figures from the crypto industry, sends a clear signal that the new administration will pay closer attention to the crypto market and explore potential opportunities for the US economy.
Specific proposals, including changes to tax policy for Bitcoin miners and profits on certain tokens, will need approval from both Congress and the Senate, which are currently controlled by Republican majorities. The appointment of former PayPal COO David Sacks as Trump’s “White House AI & Crypto Czar” and the involvement of several major companies vying for advisory council seats all point to “gathering momentum,” according to Schweiger.
This week, members of the Federal Reserve are expected to gather for this year’s final Federal Open Market Committee, where they are anticipated to lower interest rates by an additional 25 basis points, bringing them between 425 and 450, according to the CME’s FedWatch Tool. The continuous reduction in interest rates has proven to be beneficial for risk assets, such as crypto, by making borrowing cheaper and encouraging investment.
Next year’s anticipation of higher prices is also benefiting other altcoins and meme coins, with SUI and Polkadot (DOT) being today’s highest performers among the top 20 cryptocurrencies by market capitalization, up 7% and 5.8% respectively.
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