Bitcoin hits new high at $106,554 as Trump backs BTC reserve plan

Bitcoin (BTC) saw another big rally on Monday in Asia, exceeding its December 5 level to hit a new high at $106,554, contributing to a nearly 5.56% increase over the past week. The surge was largely attributed to recent comments from U.S. President-elect Donald Trump, who confirmed plans to explore Bitcoin as a potential reserve asset for the United States.

The latest data on the crypto platform CoinDesk shows that BTC trading is marginally lower at $104,567.82 today, down 1.81% in the past 24 hours. Its m-cap is $2.07 trillion.

The latest development around U.S.-based listed tech major MicroStrategy's inclusion in Nasdaq 100 after its annual reshuffling has also fuelled the rally, ranking MicroStrategy in one of the largest exchange-traded funds (ETF), with more than 300 billion dollars in AUM.

"This marks a historic moment in the crypto's ascent, signalling broader acceptance and confidence in its role as a store of value in the digital age," says Sumit Gupta, co-founder, CoinDCX.

Optimism for bullish momentum remains firm as the market awaits a 25-basis point cut by the Federal Reserve, triggering high overtures in the market. In the derivatives market, open interest in Bitcoin futures and options had hit record highs, which is indicative of a bullish sentiment.

"Resistance at $106,533 and liquidity clusters close to $100,000 may lead to short-term profit-taking. Nonetheless, due to strong institutional interest and strong buying momentum, Bitcoin looks to have targets in the range of $108,000 to $110,000," Avinash Shekhar, co-founder & CEO, Pi42, a crypto-INR perpetual futures trading platform, co-founded by Avinash Shekhar and Nischal Shetty, tells Fortune India.

The anticipated US interest rate cut later this week could provide a fresh tailwind and could push BTC to test $110,000 before any meaningful retracement, opine Vikram Subburaj, CEO, Giottus, a Chennai-based cryptocurrency exchange platform founded in 2017. Vikram Subburaj, its co-founder and CEO, says a critical driver has been the inflow of funds into Bitcoin spot ETFs. "This signals increasing institutional confidence. It is sure that BTC is on a gentle yet decisive price-discovery mode. Investors should not panic at mild corrections. On a note of caution, traders should remain vigilant for potential profit-taking at higher levels. Strategic investors might view this as an opportunity to accumulate."

Shivam Thakral, CEO of Delhi-based BuyUcoin which claims to have over 1 million customers, says investors anticipate continued price surges driven by increasing institutional adoption and improving regulatory clarity.

Manhar Garegrat, country head, India & Global Partnerships, Liminal Custody, a Singapore-based digital asset custody and wallet infrastructure provider, says the crypto community is actively engaged in regulatory discussions and there are several reports of regulators across the world taking cognisance of the future of finance with crypto. "The growing institutional adoption on the back of Trump's support for the industry and the recognition of Bitcoin as a potential hedge against inflation in the backdrop of a concerning macro-economic environment suggests a positive long-term outlook."

Trump's BTC Reserve Plan

Once a crypto sceptic, Trump is now a convert to the crypto-verse. Trump had earlier said if crypto is going to define the future, he would want (it) to be mined, minted and made in the U.S.A. He also proposed to reserve “100% of all the bitcoins” the U.S. government currently holds. Predicting bitcoin would surpass gold's $16 trillion m-cap, Trump said he would use it to pay off the U.S.’ $35-trillion debt.

The U.S. holds the highest 2,05,515 BTC, mostly via black market seizures by the FBI, as per data by crypto intelligence firm Arkham Intelligence. China follows with confiscated bitcoins at 1,94,775. The U.K. and Germany's cache of seized bitcoins is 61,000 and 50,000, respectively. Few select ones are a step ahead. Bitcoin holds a legal tender status in Al Salvador and the Central African Republic. El Salvador bought 2,546 BTC, and, as its President Nayyib Bukele announced in 2022, the country buys at least 1 bitcoin every day.

Since the war against Russia, Ukraine has received bitcoin donations and its current holdings are 46,000 BTC. India's neighbour Bhutan is heavily into Bitcoin mining. Its government wants to leverage cheap hydroelectric power in the country to mine more bitcoins.

Where does India stand?

Indian government’s approach to crypto also remains “cautious”. Cryptos are not regulated in India, meaning investors trade at their own risk. The government says it has no plans to bring a law to tax crypto transactions -- though there's a 30% tax on overall profit and 1% TDS -- leaving its future uncertain in India. Crypto players say hope’s still alive. The developments in the U.S. could have positive effects across the world. “India must seize (the moment), especially following its proactive role during the G20 presidency,” says Balaji Srihari, business head, CoinSwitch, had told Fortune India earlier.