Bitcoin has achieved a record-breaking milestone, reaching $97,852 on Binance. The cryptocurrency has risen by 5% in the past 24 hours and surged an impressive 43% over the last 16 days since November 5. This remarkable ascent shows no signs of abating, driven by several pivotal factors influencing its trajectory.
A shift in market sentiment followed Donald Trump's victory in the US presidential election. The initial “Trump trade” has transformed into the “US Bitcoin Reserve Trade,” with anticipation mounting about a potential Strategic Bitcoin Reserve (SBR) under Trump’s leadership. This notion was fueled by his pledge at the Bitcoin 2024 conference in Nashville.
Industry leaders like David Bailey, CEO of BTC Inc, and Dennis Porter, CEO of Satoshi Act Fund, underscore the possibility of an SBR. Both push for its establishment within Trump’s first 100 days via executive order, warning against the US falling behind globally in Bitcoin accumulation.
Bailey disclosed on November 9, “At least one nation-state is now among the top Bitcoin holders.” He affirmed this information with certainty, suggesting informed knowledge over mere conjecture. Mike Novogratz, CEO of Galaxy Digital, confirmed on Bloomberg TV that nations are making substantial Bitcoin acquisitions.
The “US Bitcoin Reserve Trade” is likely to persist until Trump’s inauguration on January 20. The realization of Trump's promises, including reallocating 208,000 BTC confiscated by law enforcement or following Senator Cynthia Lummis’ proposal to purchase 1 million BTC over five years, remains to be seen.
Potential Appointment of a 'Crypto Czar' A recent leak hints at Trump’s team considering a unique White House role dedicated to Bitcoin and crypto policy. Transition efforts are reportedly vetting candidates for this first-ever crypto-specific position, which signifies the burgeoning influence of the industry within the incoming administration.
It remains uncertain whether this role will be a senior White House position or a “crypto czar” who oversees policy and regulation across the federal landscape. Advocates within the crypto industry are campaigning for direct access to Trump, a significant development for the sector.
The introduction of Bitcoin ETF options dramatically influenced the market. BlackRock’s iShares BTC Trust (IBIT) ETF options debuted on November 19, 2024, with a groundbreaking $1.9 billion in notional exposure on their opening day. Bloomberg ETF expert James Seyffart noted, “IBIT's first day of options trading saw close to $1.9 billion traded via 354,000 contracts."
Jeff Park, Head of Alpha Strategies at Bitwise Invest, emphasized the transformative nature of Bitcoin ETF options, stating they mark the most remarkable advancement for the crypto market. With SEC approval, Bitcoin's value is “fractionally banked” through ETF options, paving the way for exponential growth owing to unique volatility characteristics.
As the Bitcoin ETF options evolve, they could initiate an extraordinary recursive effect on Bitcoin's price. This groundbreaking financial tool ensures counterparties are protected by the Options Clearing Corporation, fostering Bitcoin's synthetic notional exposure to expand significantly.
The recent rally is also attributed to substantial activity in the spot market. Significant spot bids have propelled Bitcoin’s price upward, with noteworthy BTC ETF inflows. The influx amounting to $773.4 million includes contributions from BlackRock ($626.5 million), Fidelity ($133.9 million), Bitwise ($9.2 million), and ARK Invest ($3.8 million).
Over three days, US spot Bitcoin ETFs amassed an astonishing $1.856 billion in Bitcoin. The total net asset value of these ETFs now surpasses $100 billion. Launched in January, these 12 ETFs, including those from BlackRock and Fidelity, reached this milestone in just ten months. As of press time, BTC traded at $96,920, highlighting its continuing journey toward new heights.