Bitcoin, the leading cryptocurrency, peaked at $106,533 and was last trading at $103,917, a 2.6% increase, as of 1215 GMT. Ether, a smaller cryptocurrency, also saw a 0.4% increase, trading at $3,918.
"We're in blue sky territory here," remarked Tony Sycamore, an analyst at IG. "The next target for the market is $110,000. The anticipated pullback many expected simply did not materialize, especially with this recent news."
Investor confidence was further bolstered by MicroStrategy's inclusion in the tech-focused Nasdaq 100 index, which is expected to attract additional investments for the software company that has pivoted to bitcoin acquisition.
Bitcoin and the broader cryptocurrency market have gained significant attention as investors speculate that the forthcoming Trump administration will foster a more favorable regulatory landscape, enhancing the appeal of alternative currencies. Bitcoin has surged 192% this year.
"We're going to do something remarkable with crypto because we don't want China or anyone else—it's not just China, but others are adopting it—and we want to take the lead," Trump stated in an interview with CNBC last week.
When questioned about the possibility of establishing a crypto reserve similar to oil reserves, Trump responded, "Yes, I think so."
As of July, governments worldwide held 2.2% of bitcoin's total supply, according to data from CoinGecko, with the United States owning nearly 200,000 bitcoins valued at over $20 billion at current prices.
Other nations, including China, the UK, Bhutan, and El Salvador, also possess significant amounts of bitcoin, as reported by the data site BitcoinTreasuries.
Additionally, several other countries are exploring the idea of creating strategic reserves for cryptocurrency.
Russian President Vladimir Putin stated earlier this month that the current U.S. administration is weakening the U.S. dollar's status as the global reserve currency by politicizing its use, which is prompting many nations to seek alternative assets, such as cryptocurrencies.
"For instance, who can prohibit bitcoin? No one," Putin remarked.
However, there are skeptics. Federal Reserve Chair Jerome Powell recently compared bitcoin to gold. Analysts emphasize that any transition to alternative assets will require time to materialize.
"We should remain cautious regarding the idea of a BTC strategic reserve, and it is important to recognize that this is unlikely to occur in the near future," noted Chris Weston, head of research at Pepperstone.
"Any optimistic remarks from Trump suggesting that plans for a strategic reserve are developing could provide a positive influence, but such moves would carry implications that must be carefully evaluated and communicated to market participants."
CRYPTO BOOST
Since the November 5 election, which resulted in Trump's victory alongside several pro-crypto candidates, bitcoin has surged over 50%. The overall cryptocurrency market value has nearly doubled this year, reaching a record high of over $3.8 trillion, according to CoinGecko.
Trump, who previously referred to cryptocurrencies as a scam, has since embraced digital assets during his campaign, vowing to establish the United States as the "crypto capital of the planet."
This month, Trump appointed David Sacks, a former PayPal executive and close associate of Trump adviser and major donor Elon Musk, as a White House czar for artificial intelligence and cryptocurrencies.
Additionally, Trump announced his intention to nominate Paul Atkins, a Washington attorney with pro-crypto views, to lead the Securities and Exchange Commission.
On Friday, Nasdaq revealed that MicroStrategy, under the leadership of CEO Michael Saylor, will be included in the Nasdaq-100 Index, with the change set to take effect before the market opens on December 23.
MicroStrategy, known for its significant investments in the largest cryptocurrency, has experienced a remarkable increase in its stock price, rising more than six times this year and reaching a market capitalization of nearly $94 billion. It now holds the title of the largest corporate owner of the cryptocurrency.
MicroStrategy's inclusion in the Nasdaq-100 is expected to attract index-tracking investors, potentially increasing share value and facilitating further cryptocurrency acquisitions through debt and equity financing, according to Matthew Dibb, Chief Investment Officer at Astronaut Capital.
This inclusion, while unexpected, has not diminished optimism regarding the initiation of a capital cycle potentially driving up Bitcoin's price.