The Bitcoin it flies to new historical records, updating the previous high above 100 thousand dollars, thanks to Trump’s proposal to create a Bitcoin reserve and expectations of a Fed rate cut this week. Bitcoin reached a peak overnight new record of $106.48and then retrace back to $105.15maintaining an important increase of 3.4%. At this level, the cryptocurrency shows a 50% increase since Trump’s victory in the elections. There capitalization market has also broken through the threshold of 2 trillion dollars, reaching 2.08 trillion.
The proposed Bitcoin reserve in Texas
The latest wave of purchases on Bitcoin was triggered by the latest statements by President-elect Donald Trumpwho has now become the main supporter of cryptocurrencies, who has stated that he wants to create one Bitcoin strategic reserve in the United States similar to oil reserves.
In reality the US government owns already a certain amount of Bitcoinfollowing the seizures of Department of Justice for financial fraud. The federal government is estimated to have cash on hand almost 200,000 Bitcoin and it is nothing new that Trump has proposed that the government appropriate that little treasure and include it in the reserves (a proposal already aired during the election campaign).
The proposal, anyway. That seems to have made proselytes in the State of Texasone of the largest in the United States in terms of size and economic importance. Congressman Giovanni Capriglione, in fact, would have presented a bill proposing the establishment of a strategic reserve of State Bitcoin. If Texas were to vote in favor of this proposal, called the Texas Strategic Bitcoin Reserve Act, which provides for the creation of a reserve in the state treasury, there could be a significant impact on the market thanks to the operation of a imitation phenomenon in other US states
Support from the Fed’s rate cut
Aside from the most colorful hypotheses, the market is already discounting the Federal Reserve’s next rate cut which should weaken the dollar, increasing the value of all alternative assets, especially so-called safe haven assets such as gold and Bitcoin. The FOMC will meet tomorrow and will announce monetary policy decisions on Wednesday evening, but a cut in interest rates by 25 basic points.
At the CME, futures on FedWatch they leave no room for doubt and signal a rate cut by 25 points to 4.25-4.50% with a probability of 97.1%. At the same time, expectations for January indicate rate stability with a probability of 81%. The issue is more uncertain for March, where the probability of another 25 point cut exists but is lower (54%).
Conquering the “traditional” market
Finally, the market also benefits fromwaiting for penetration of the traditional financial market by cryptocurrencies. Trump announced he will nominate head of the SEC Paul Atkinsa pro-crypto Washington lawyer.
Furthermore, the Nasdaq announced that MicroStrategy will be added to the Nasdaq-100 indexfollowing the change to the basket which will come into force on Monday 23 December. MicroStrategy is an aggressive investor in the cryptocurrency market and is also currently the largest holder of Bitcoin.
