(Bloomberg) — Bitcoin is approaching the historic $100,000 level, driven by optimism that President-elect Donald Trump’s support for cryptocurrencies heralds a boom as the United States focuses on friendly regulation rather than a crackdown.
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The largest digital assets rose as much as 3.6% to a record high of $97,892 on Thursday and are hovering near that peak as of 6:25 a.m. in London. The cryptocurrency market as a whole has gained nearly $900 billion since Trump won the election on November 5.
Trump’s transition team has begun discussions about whether to create a position in the White House dedicated to digital asset policy. The industry is seeking the position — which would be the first of its kind in the United States — to have a direct line to the president-elect, who is now one of crypto’s biggest cheerleaders.
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The talks are the latest US boost to digital asset market sentiment, along with MicroStrategy Inc’s plans. To accelerate token purchases and introduce options into Bitcoin exchange-traded funds in the country.
Feature level
Speculators are increasingly focused on when, not if, bitcoin will jump to $100,000. Defenders of its purported role as a modern-day store of value cherish the six-figure number as a symbolic rebuttal to skeptics who see little benefit in cryptocurrencies and condemn their links to money laundering and crime.
“Buyers are choking sellers,” said Tony Sycamore, market analyst at IG Australia Pty. “Although I’m not sure everything will be smooth as it approaches the $100,000 level, the demand seems insatiable.”
MicroStrategy, the largest publicly traded Bitcoin company, on Wednesday announced a nearly 50% increase in planned sales of convertible securities, to $2.6 billion, to fund token purchases. The once obscure software maker now considers itself a bitcoin custodian and has a stock of about $31 billion in the digital asset.
ETF flows
A group of ten US ETFs investing in Bitcoin attracted a net inflow of $5.8 billion in the period following Election Day, data compiled by Bloomberg showed. The group’s total assets have reached an unprecedented amount of $100 billion.
“The huge psychological level of $100,000 is now looming,” said Caroline Morrone, co-founder of Orbit Markets, which provides liquidity for cryptocurrency derivatives. She added that the pattern of bets in Bitcoin options indicates that “the market is anticipating a rapid rise.”
Trump pledged to create a supportive regulatory framework for cryptocurrencies in the United States and create a strategic stockpile of Bitcoin. The timeline for implementing his promises and the feasibility of Bitcoin reserves remains uncertain.
The president-elect used to be skeptical of cryptocurrencies, but changed his stance after digital asset companies spent big during the election campaign to advance their interests. He also has his own digital asset projects.
The current bout of optimism has dulled memories of the 2022 market downturn that exposed fraud and other risky practices and led to the collapse of platforms including Sam Bankman-Fried’s FTX exchange. The unrest has precipitated a wave of enforcement actions by the U.S. Securities and Exchange Commission, a crackdown that the industry expects will wane under Trump.
-With assistance from Suvashree Ghosh and Adam Hay.
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