Bitcoin nears $100,000 as pro-crypto sentiment surges under Donald Trump’s second presidency

Bitcoin continued its remarkable surge on Thursday, edging closer to the significant $100,000 milestone as investors anticipated a friendlier U.S. regulatory landscape under President-elect Donald Trump. A renewed wave of optimism surrounding cryptocurrencies is fueling what many are calling a potential boom era for the asset class.

Bitcoin prices topped $98,000 during European trading hours, marking a new record high. The cryptocurrency has soared over 130% year-to-date in 2024, with a 40% gain in the two weeks since Trump’s re-election. According to Coin Metrics, Bitcoin was up more than 3% on the day, after reaching an intraday high of $98,367. It has since lost some of its gain and it’s now trading at $97,213.62 as of the time of writing.

This rally has also buoyed crypto-related equities. Coinbase climbed 2% in premarket trading, while MicroStrategy—a company known for holding significant Bitcoin reserves—jumped 13%. Mining stocks saw similar gains, with MARA Holdings rising 9%.

Pro-Crypto Policies Drive Market Optimism

Investors are speculating that Trump’s pro-crypto stance and his promise to make the United States the “crypto capital of the planet” will usher in more favorable regulations. His administration’s proposals include a potential national Bitcoin reserve, adding a layer of strategic importance to the digital asset.

“Bitcoin is firmly in overbought territory, but it’s being magnetically drawn toward the $100,000 level,” noted Tony Sycamore, an analyst at IG Markets.

The pro-crypto momentum has attracted substantial institutional interest. Over $4 billion has flowed into U.S.-listed Bitcoin exchange-traded funds (ETFs) since the election. Options trading on BlackRock’s Bitcoin ETF has also gained traction, with bullish call options significantly outpacing bearish puts.

Ripple Effect on Crypto Stocks

The Bitcoin rally has bolstered the broader crypto market, with shares of MARA Holdings climbing 14% overnight and MicroStrategy increasing 10%, pushing its market capitalization beyond $100 billion. These moves reflect heightened investor confidence in crypto’s potential during Trump’s second term.

“Many are wondering if this administration will bring the regulatory clarity the crypto community has long awaited,” said Will Peck, head of digital assets at WisdomTree. “While it’s too early to say for certain, the excitement is undeniably bullish for Bitcoin and the entire blockchain ecosystem.”

Market Mechanics: Short Squeezes and Futures

Bitcoin’s recent surge has been amplified by a combination of futures market activity and short liquidations. A spike in funding rates and open interest during Asian trading hours triggered over $88 million in short liquidations within 24 hours, according to CoinGlass. This liquidation wave further propelled the cryptocurrency’s price upward.

Premiums in spot markets have also declined, signaling increased demand in the futures market, data from CryptoQuant shows. Rob Ginsberg, an analyst at Wolfe Research, described this dynamic as a continuation of Bitcoin’s breakout from a long consolidation period.

“Looking back at previous moves of this magnitude, BTC has historically either gone into a consolidation period or ignored the overbought condition as investors pile in.” The chase is on,” Ginsberg said according to a report from CNBC. “The real test will come as Bitcoin approaches the psychological barrier of $100,000, possibly within days.”

Economic Implications Under Trump

Beyond regulatory tailwinds, Trump’s second term could introduce broader economic shifts favorable to Bitcoin. Analysts point to potential increases in budget deficits, inflationary pressures, and a redefined role for the U.S. dollar on the global stage—all of which could boost Bitcoin’s appeal as an alternative asset.

As Bitcoin approaches the historic $100,000 mark, the cryptocurrency is not only setting new records but also reaffirming its role as a key player in the financial landscape under a crypto-forward administration.