Cryptocurrency has been on an upward trend for nearly two years
Bitcoin extended its record rally on Monday. The price of the oldest and most well-known cryptocurrency rose to $107,821 on the Bitstamp trading platform in the evening. Although the price dipped slightly afterward, it still remained significantly above the $100,000 mark at around $106,000. Bitcoin has been in an upward trend for nearly two years, pushing its value from below $20,000 to six-digit highs.
Trump’s election drives the rally
The latest driver of the rally is the election of Donald Trump as the new U.S. president. Since Trump’s victory, Bitcoin’s price has surged by approximately 50%. Trump is seen as a supporter of cryptocurrencies.
Potential for disappointment
“The prospect of introducing strategic Bitcoin reserves, in particular, is fueling investors’ enthusiasm,” wrote market analyst Timo Emden of Emden Research. While Trump’s promises may keep investors optimistic until he officially takes office, Emden warned that the potential for disappointment could grow. Investors should remain cautious, as none of these plans are set in stone.
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The popular cryptocurrency is trading at $61,700.
Rate cuts boost Bitcoin
Bitcoin’s rally is further supported by expectations of interest rate cuts by major central banks. The U.S. Federal Reserve is set to announce its rate decision on Wednesday evening, with another 0.25 percentage point cutanticipated. For riskier investments like cryptocurrencies, this is positive news, as it reduces the attractiveness of fixed-income assets.
Outlook for further Bitcoin purchases
Bitcoin is also receiving a boost from the prospect of further purchases by the U.S. software company MicroStrategy. CEO and co-founder Michael Saylor is a staunch Bitcoin advocate, aiming to transform the company into a Bitcoin-driven enterprise.
MicroStrategy’s strategy appears to be paying off, as evidenced by its inclusion in the tech-heavy Nasdaq 100 indexstarting December 23 of this year. Emden noted that this move reflects the growing dominance of Bitcoin.
According to data from Coinmarketcap.com, Bitcoin’s market value currently stands at approximately $2.1 trillion, accounting for around 56% of the total cryptocurrency market capitalization of $3.7 trillion across more than 10,000 cryptocurrencies.
