By Kevin Buckland and Ankur Banerjee
(Reuters) -Bitcoin rose to a record high above $106,000 on Monday after President-elect Donald Trump suggested he plans to create a US bitcoin strategic reserve similar to its strategic oil reserve, fueling enthusiasm from crypto bulls .
The world’s largest and best-known cryptocurrency, it reached a high of $106,533 and was last trading up 3.2% at $104,462. Minor crypto ether rose 1.5% to $3,965.
“We’re in blue sky territory here,” said Tony Sycamore, an analyst at IG. “The next number the market will be looking for is $110,000. The pullback that many people were waiting for just didn’t happen because now we have this news.”
Investor sentiment was also boosted by MicroStrategy’s inclusion in the technology sector, which is likely to lead to more inflows for the software company turned Bitcoin buyer.
Bitcoin and crypto have been catapulted into the spotlight as investors bet that the new Trump administration will usher in a friendlier regulatory environment, boosting sentiment around the alternative currency. Bitcoin is up 192% this year.
“We’re going to do something great with crypto because we don’t want China or anyone 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: “Yes, I think so.”
Governments around the world controlled 2.2% of the total bitcoin supply as of July, according to data provider CoinGecko, while the United States owned nearly 200,000 bitcoins worth more than $20 billion at current levels.
China, Great Britain, Bhutan and El Salvador are the other countries with a significant amount of bitcoins, data site BitcoinTreasuries showed.
Other countries have also considered strategic cryptocurrency reserves.
Russian President Vladimir Putin said earlier this month that the current US administration is undermining the US dollar’s role as a reserve currency in the global economy by using it for political purposes, forcing many countries to turn to alternative assets, including cryptocurrencies.
“Bitcoin for example, who can ban it? Nobody,” Putin said.
However, there are skeptics, with Fed Chairman Jerome Powell comparing Bitcoin to gold earlier this month. Analysts also point out that such a move will take time to implement.
“I think we still need to be cautious about a strategic reserve of BTC, and at least consider that this is unlikely to happen any time soon,” said Chris Weston, head of research at Pepperstone.
“Any comment from Trump that offers an increased level of hope that plans for a strategic reserve are developing is of course a clear tailwind, but this would come with consequences that need to be carefully considered and properly communicated to market players.”
CRYPTO BOOST
Bitcoin has risen more than 50% since the November 5 election, which saw Trump elected along with many other pro-crypto candidates. According to CoinGecko, the total value of the cryptocurrency market has nearly doubled in the past year to a record over $3.8 trillion.
Trump – who once labeled crypto a scam – embraced digital assets during his campaign, promising to make the United States the “crypto capital of the planet.”
Trump this month named a White House czar for artificial intelligence and cryptocurrencies, former PayPal (NASDAQ:) executive David Sacks, a close friend of Trump adviser and megadonor Elon Musk.
Trump also said he would appoint pro-crypto lawyer Paul Atkins of Washington to head the Securities and Exchange Commission.
On Friday, exchange operator Nasdaq said MicroStrategy will be added to the Nasdaq-100 Index, with the change taking effect before the market opens on December 23.
MicroStrategy, an aggressive investor in the world’s largest crypto assets, has seen its shares soar more than sixfold this year, bringing its market value to nearly $94 billion. It is now the largest corporate holder of the cryptocurrency.
Pepperstone’s Weston said the market was “fronted with the idea that Michael Saylor (MicroStrategy CEO) will benefit from the likely rally in MicroStrategy’s share price, given the looming passive flows from its inclusion in the NAS100 – where he will presumably own shares sell and buy more bitcoin.”
