forbes.com
Bitcoin prices continued their strong, upward trend on Monday, December 16, setting their latest record as they benefited from some very strong fundamentals.
The world’s most prominent digital currency, which has achieved ever-increasing highs in recent weeks, rose above $107,850, according to Coinbase data from TradingView.
Several analysts highlighted this strong performance, including the TikTok influencer who goes by Wendy O.
“As 2024 comes to a close we have a lot of anticipation and hope for a pro crypto president stepping into office,” she stated via emailed comments.
“Some fundamental analysis to note is the rumor that Trump will make an Executive Order day 1 in office to create a Bitcoin Strategic Reserve. This would be done to help stabilize the dollar and help combat the US debt crisis,” said the analyst.
“This news also brought rumors of Japan and Russia potentially following suit to create their own Bitcoin Strategic reserve and with a finite supply of 21 Million Bitcoin could cause a supply shock further pushing price up,” she added.
Marc P. Bernegger, cofounder of crypto fund of funds AltAlpha Digital, also weighed in.
“In my view, the latest surge in Bitcoin's price, reaching above $105,000, can be attributed to these key factors: The main driver is the anticipation of a potential U.S. Bitcoin Strategic Reserve based on comments from President-elect Donald Trump suggesting the possibility of establishing a U.S. bitcoin strategic reserve similar to its oil reserves,” he stated through email.
“This news fueled optimism among investors, expecting this move could increase demand and legitimacy for Bitcoin,” said Bernegger.
“Additionally there have been large transactions moving Bitcoins off major exchanges, reducing the available supply which typically leads to price increases,” he stated. “This weekend alone, over 27,000 Bitcoins were moved from exchanges.”
“Another positive news was the addition of MicroStrategy, a major corporate holder of Bitcoin, to the Nasdaq 100 index,” Bernegger indicated.
Nasdaq recently announced that the company would be part of the aforementioned index as of December 23.
“This move signifies increased institutional adoption and interest in Bitcoin,” the market observer claimed.
Jacob Joseph, senior research analyst at CCData, offered his perspective, choosing to focus on anticipation surrounding the shifting U.S. political landscape and also some other key factors.
“The sustained momentum since the U.S. elections underscores a positive shift in Bitcoin’s fundamentals, as the industry anticipates a more regulatory-friendly environment under the new U.S. government and strong institutional adoption of the asset,” he stated via emailed comments.
“With last week’s U.S. CPI figures meeting expectations, the market may be factoring in another anticipated interest rate cut by the Federal Reserve later this week,” said Joseph, speaking to the policy meeting scheduled to take place on Tuesday, December 17 and Wednesday, December 18.
“Historically, December has been a favourable month for Bitcoin, with an average return of 9.11% since 2014,” he noted, citing the digital currency’s market history.
“The current rally could also benefit from the ‘Santa Rally,’ a seasonal trend typically observed in the stock market, where equities experience positive price action in late December,” Joseph stated.
Olivier Mammet, head of US OTC trading for Gemini, also spoke to the matter, providing his views on what drove bitcoin’s recent gains.
“A lot of this has been fuelled by excitement as we head towards Trump’s inauguration in January,” he stated.
“The pattern of swings on Sunday evening is well alive and the fast break through the $103,000 area can be explained by a market positioned on the wrong foot,” the market observer claimed.
“We saw perpertuals funding turn negative on a few exchanges over the weekend, a sign of an increase in short positions that got liquidated fast,” he stated.
“On Friday evening, Nasdaq also indicated that Microstrategy would enter the Nasdaq 100 Index on 23rd December,” said Mammet.
“We also have FOMC this week, and although a 25bps cut is expected (>90% probability), the market could be positioning for it,” he concluded.
Disclosure: I own some bitcoin, bitcoin cash, litecoin, ether, EOS and SOL.