Bitcoin surged to a record high of $106,533 on Monday, buoyed by President-elect Donald Trump's hints of establishing a US cryptocurrency strategic reserve, akin to the nation's oil reserves.
The world's leading cryptocurrency climbed 3.2% to $104,462, while ether, the second-largest crypto, rose 1.5% to $3,965.
Market optimism was fueled by Trump’s recent comments suggesting a favorable regulatory stance on crypto. "We want to lead the world in crypto, not let others like China take the lead," Trump told CNBC. When asked about creating a crypto reserve, he affirmed the possibility, sparking enthusiasm among investors.
This development comes as the total cryptocurrency market value hits a record $3.8 trillion, with bitcoin up 192% this year. Trump's campaign embraced digital assets, promising to make the US the global crypto hub. He also appointed crypto-friendly figures to key positions, including David Sacks as AI and crypto czar, and Paul Atkins to head the SEC.
Adding to the momentum, MicroStrategy, the largest corporate bitcoin holder, was included in the Nasdaq-100 index, driving expectations of more inflows into the crypto market. Shares of the software-turned-crypto firm have surged six-fold this year, and analysts predict CEO Michael Saylor might use gains to acquire more bitcoin.
Despite the bullish sentiment, analysts urge caution, highlighting that creating a bitcoin reserve would be a complex and time-consuming process. Federal Reserve Chair Jerome Powell likened bitcoin to gold, signaling a need for careful consideration of such a move’s implications.