Bitcoin Price Surge Crosses $106,000 as Reserve Talks Gain Momentum
Bitcoin prices surged to $106,000 on Monday, December 16th, 2024. According to Reuters, the surge in the price of the cryptocurrency was because the new President Trump announced to creation a Bitcoin strategic reserve.
Last week, the world’s biggest cryptocurrency hit a lifetime high $100,000. From there Bitcoin touched $104,462 and then rose by 3.2% to $106,000 on Monday morning. The cryptocurrency market has grown by 50% and reached $80,000 since the day Donald Trump was elected as the President
Tony Sycamore, an analyst at IG said, “We’re in blue sky territory here. The next figure the market will be looking for is $110,000. The pullback that a lot of people were waiting for just didn’t happen, because now we’ve got this news.”
Strategic Reserve Hopes Drive Bitcoin Surge
With Musk supporting Trump coming in power, discussions around the inclusion of Bitcoin in a U.S. strategic reserve have sparked a wave of optimism among investors. Proponents of the initiative liken Bitcoin to “digital gold,” arguing it could provide a robust hedge against economic uncertainty.
The new President told CNBC, “We’re gonna do something great with crypto because we don’t want China or anybody else – not just China but others are embracing it – and we want to be the head.”
The market rally has also improved Bitcoin investment, with institutions and retail investors eager to capitalize on the momentum. “This is a monumental step forward for Bitcoin,” said a leading cryptocurrency analyst. “The possibility of its integration into a strategic reserve marks a shift from speculative trading to recognition as a legitimate asset class.”
This latest surge in the prices of Bitcoin highlights the cryptocurrency’s growing role as a reliable store of value and a hedge against traditional market risks. Analysts suggest that if such a reserve policy is implemented, Bitcoin could achieve unprecedented mainstream recognition.
According to a data provider Coin Gecko, governments around the world hold 2.2% of the Bitcoin Supply with the U.S. holding 200,000 of it at a valuation of $20 million.
Doubts and Criticism
Despite the excitement about Bitcoin, the critics express concern about its stability and value as a reserve currency. Both geopolitical risks and legal restrictions might become obstacles to creating a Bitcoin strategic reserve.
The Trump Bitcoin policy is being hotly discussed, which underlines the challenges of syncing the state, if its actions touch on cryptocurrencies, to the machinery of cryptocurrency which is traditionally built on a decentralized system.
But doubt remains, with US Federal Reserve Chairman Jerome Powell stating recently that Bitcoin was akin to gold. Chris Weston, head of research at Pepperstone, “I think we still need to be cautious on a BTC strategic reserve, and at least consider that this is not likely to happen anytime soon. Of course, any comment from Trump that offers an increased degree of hope that plans for a strategic reserve is evolving are an obvious a tailwind, but this would come with consequences which would need to be carefully considered and well telegraphed to market players.”
Future Implications of Bitcoin
Bitcoin’s leap past $106,000 sets a new standard, showcasing cryptocurrency’s resilience and adaptability in a rapidly evolving financial landscape. Should the United States adopt a Bitcoin strategic reserve, experts predict a cascading effect across the crypto market, spurring demand for other digital assets and accelerating adoption on a global scale.
With Musk getting a seat at the table, there are a lot of changes that have already been announced. For example, David Sacks was nominated as the AI advisor and Crypto czar. A lot of big tech companies are also hoping for a lot from the administration. Last week the CFO of Open AI called Trump an “AI President.”
