Bitcoin surges above $106,000 on strategic reserve hopes

When asked if he plans to build a crypto reserve similar to oil reserves, Trump said: “Yeah, I think so.” [File]
| Photo Credit: REUTERS

Bitcoin surged to a record high above $106,000 in early Asian trade on Monday, boosted by comments from President-elect Donald Trumpthat suggested he plans to create a U.S. bitcoin strategic reserve similar to its strategic oil reserve.

Bitcoin, the world’s biggest and best known cryptocurrency, hit a high of $106,533 and last traded at $105,688. Smaller crypto Ether rose nearly 3% to 4,014.

“We’re in blue sky territory here,” said Tony Sycamore, an analyst at IG. “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.”

“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,” Trump told CNBC late last week.

When asked if he plans to build a crypto reserve similar to oil reserves, Trump said: “Yeah, I think so.”

Other countries have also been considering cryptocurrency strategic reserves.

Russian President Vladimir Putin earlier this month questioned the need to hold state reserves in foreign currencies, saying that domestic investment of such reserves was more attractive.

Putin said the current U.S. administration was undermining the role of the U.S dollar as the reserve currency in the global economy by using it for political purposes, forcing many countries to turn to alternative assets, including cryptocurrencies.

“For example, bitcoin, who can prohibit it? No one,” Putin said.

There are skeptics though, with Federal Reserve Chair Jerome Powell likening bitcoin to gold earlier this month.

“People are not using it as a form of payment, or as a store of value. It’s highly volatile, it’s not a competitor for the dollar.”

Crypto Boost

Bitcoin has surged more than 50% since the November 5 election that saw Trump elected along with many other pro-crypto candidates. The total value of the cryptocurrency market has almost doubled over the year so far to hit a record over $3.8 trillion, according to data provider CoinGecko.

Trump this month named a White House czar for artificial intelligence and cryptocurrencies, former PayPal executive David Sacks, a close friend of Trump adviser and megadonor Elon Musk.

Trump also said he would nominate pro-crypto Washington attorney Paul Atkins to head the Securities and Exchange Commission.

On Friday, exchange operator Nasdaq said MicroStrategy will be added to the tech-heavy Nasdaq-100 Index after a meteoric surge in the shares of the bitcoin buyer.

MicroStrategy, an aggressive investor in the world’s largest crypto asset, has seen its shares soar more than six-fold this year, taking its market value to almost $94 billion. It is now the largest corporate holder of the cryptocurrency.