Bitcoin rose to a record high on US President-elect Donald Trump’s support for digital assets and optimism about the upcoming inclusion of MicroStrategy, an accumulator of the token, in a key US stock gauge.
The largest virtual currency rose more than 3% at one point on Monday in Asia to an unprecedented US$106,493 ($143,602.08), exceeding its previous peak from Dec 5. The advance helped to boost sentiment in the wider crypto market.
Trump is moving toward creating a friendly regulatory backdrop for digital assets, undoing a crackdown imposed by President Joe Biden’s outgoing administration. The Republican has also backed the idea of a strategic national Bitcoin stockpile, though many question the feasibility of the proposal.
A lot of people are “basing their expectation on a much more favourable administration,” Aya Kantorovich, co-founder of institutional crypto platform August, said on Bloomberg Television. The optimism is reflected in demand for exchange-traded funds investing in digital assets, she added.
On Friday, Nasdaq Global Indexes said MicroStrategy will join the Nasdaq 100 Index, the US technology stock gauge tracked by an array of investment funds. The software maker has transformed into a leveraged bet on Bitcoin as the company raises billions of dollars to plow into the digital asset.
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“Now that MicroStrategy is in Nasdaq, index funds may buy its shares, and that will help the company to raise more equity to buy more Bitcoin,” said Sean McNulty, director of trading at liquidity provider Arbelos Markets.
The original cryptocurrency, which has more than doubled this year, changed hands at US$104,616 as of 5.13am on Monday in London. Smaller tokens such as second-ranked Ether and meme-crowd favourite Dogecoin pushed higher.
Bitcoin through Sunday cemented a seven-week winning streak, the longest such run since 2021. But the pace of gains cooled more recently, which could be an indication that “a pullback may be coming”, IG Australia Market Analyst Tony Sycamore wrote in a note.
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US ETFs investing directly in Bitcoin have attracted US$12.2 billion of net inflows since Trump’s victory in the presidential election on Nov 5. Subscriptions for similar products for Ether have reached US$2.8 billion over the same period.
Chart: Bloomberg
