Bitcoin hits a new high, breaking above $107,000, is the hope for strategic reserves growing stronger?

FX168 Financial News (North America) reported that on Monday (December 16), boosted 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 surge broke through $107,000, further igniting the enthusiasm of cryptocurrency investors.

At the same time, the Nasdaq operator announced that MicroStrategy (MSTR.O) will be included in the technology-focused Nasdaq 100 Index. This news is expected to bring more capital inflows to 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 $105,957.38.

(Source: FX168)

IG analyst Tony Sycamore stated, "We have entered the 'blue sky territory,' and the next number the market is focusing on is $110,000. The pullback that many anticipated did not occur because Trump's announcement changed market expectations."

(Source: Reuters)

Trump's Policy Push Benefits Bitcoin Market

The Bitcoin and cryptocurrency markets have become the focus as investors bet that the incoming Trump administration will create a more favorable regulatory environment, enhancing market sentiment towards this alternative currency. By the end of 2024, Bitcoin's price has risen by approximately 150% Last week, Trump told CNBC: "We are going to do 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 Strategic Petroleum Reserve, 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 a total of 2.2% of the total Bitcoin supply. 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, there are still skeptics in the market. Federal Reserve Chairman Jerome Powell compared Bitcoin to gold this month, stating that its primary use is as a store of value. Additionally, analysts point out that plans for a "Bitcoin strategic reserve" may take a long time to implement.

Chris Weston, head of research at Pepperstone, stated: "I think we still need to be cautious about Bitcoin strategic reserves, at least considering that this may not be realized in the short term." He added: "Of course, any comments from Trump suggesting that this plan is moving forward will provide a significant upward boost to the market, but the subsequent impact of this plan needs to be carefully considered and clearly communicated to the market."

Unprecedented Heat in the Cryptocurrency Market

Since Trump's election 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.

(Source: Reuters)

Trump had previously criticized cryptocurrencies but changed his stance during the campaign to support digital assets, promising to make the U.S. the "global cryptocurrency capital." This month, Trump appointed former PayPal executive David Sacks as the White House's director of artificial intelligence and cryptocurrency affairs; Sacks is a close friend of Trump's advisor Elon Musk. Additionally, Trump stated that he would nominate pro-cryptocurrency Washington lawyer Paul Atkins to serve as chairman of the U.S. Securities and Exchange Commission (SEC) MicroStrategy Drives Capital Circulation Effect

Last Friday, Nasdaq announced that MicroStrategy, led by Michael Saylor, will officially join the Nasdaq 100 Index before the market opens on December 23. As the world's largest corporate holder of Bitcoin, the company's stock price has surged sixfold this year, with a market capitalization approaching $94 billion.

Matthew Dibb, Chief Investment Officer of Astronaut Capital, pointed out that after being included in the Nasdaq 100 Index, investors will buy MicroStrategy shares to track the broader index's holdings, which will further drive up the company's stock price and enable it to purchase more Bitcoin through debt and equity financing.

"Although this inclusion was somewhat unexpected, many believe it could mark the beginning of a capital circulation effect with the potential to drive up the spot price of Bitcoin," Dibb said