What’s driving Bitcoin’s remarkable surge to $108,000? Following Trump’s address, the impact of ETFs, and substantial purchases by MicroStrategy, is a significant institutional supply squeeze on the horizon?
Bitcoin hits unprecedented heights
Bitcoin (BTC) is back in the limelight. On December 17, BTC soared to an astounding peak of $108,260, marking over 50% gains since the U.S. elections. As of December 17, it is trading around $106,663.
BTC’s upward trend correlates with President-elect Donald Trump’s initiative to create a U.S. Bitcoin strategic reserve, igniting excitement across various markets.
During his speech at the New York Stock Exchange on December 12, Trump emphasized the need for the U.S. to lead in digital assets, advocating for reserves akin to its strategic oil stockpile.
The concept of a Bitcoin reserve is not entirely novel. It was first presented in the BITCOIN Act, promoted by Republican Senator Cynthia Lummis, which aims for the U.S. to acquire 1 million BTC over five years to tackle the burgeoning $35 trillion national debt.
Institutional involvement, especially from MicroStrategy, is another catalyst for this surge. The company is well-known for its aggressive Bitcoin purchases.
Just this past week, MicroStrategy revealed it had acquired $1.5 billion in BTC at an average price of $100,386 per coin. This latest investment elevates its total Bitcoin holdings to 439,000 BTC, worth around $47 billion.
MicroStrategy’s Bitcoin strategy has significantly boosted its market cap, skyrocketing from $1.1 billion in 2020 to nearly $100 billion today.
Furthermore, MicroStrategy’s impending inclusion in the Nasdaq 100 index, effective next week, is expected to catalyze even more demand for its shares as funds and ETFs adjust their portfolios.
Meanwhile, Ethereum (ETH) has also gained traction in this cryptocurrency frenzy. After a phase of stagnation, ETH surged to a week-high of $4,106 on December 16, representing a 6% increase over the week.
Although Ethereum has seen minor pullbacks due to profit-taking, it remains stable around the $3,950 mark at the time of writing.
Let’s explore the key developments propelling Bitcoin and Ethereum, assess the macroeconomic factors fueling this bull run, and consider expert forecasts for the near future.
Institutional Influence
Both Bitcoin and Ethereum showcase robust momentum, but the true narrative unfolds when examining ETF inflows, liquidations, and open interest in futures.
Spot Bitcoin ETFs have experienced remarkable growth this month, recording daily inflows since December began, amassing over $5.16 billion as of December 16.
These inflows have catapulted the total assets under management for Bitcoin ETFs to $123 billion — a strong indicator of confidence, particularly from institutional investors.
In contrast, Ethereum ETFs present a different picture. From their launch on July 23 to December 3, inflows were relatively modest, totaling $733.6 million, which pales in comparison to Bitcoin’s figures. Nonetheless, the momentum has shifted positively.
Since December 4, Ethereum ETFs have seen consistent…
