Bitcoin hits new all-time high

Bitcoin surges past $106,000

Bitcoin’s meteoric ascent to $106,533 underscores a surge in market optimism, driven by President-elect Donald Trump’s pledge to position the U.S. as a global leader in cryptocurrency. In an interview with CNBC, Trump revealed plans to establish a U.S. Bitcoin strategic reserve, a move that could significantly bolster the digital asset’s credibility. Bitcoin has soared more than 50% since the U.S. election on November 5.

Adding to the bullish momentum, on-chain data revealed a withdrawal of nearly 27,000 Bitcoins—worth approximately $2.8 billion—from major exchanges over the weekend. This significant outflow hints at tightening supply, which could be fueling upward price pressure.

Trump’s plan, aimed at ensuring U.S. dominance in the crypto space, has resonated with investors. His administration appears poised to embrace digital assets, as evidenced by his selection of crypto advocates for key roles. David Sacks, tapped to serve as the White House AI and crypto czar, and Paul Atkins, nominated to head the SEC, signal a policy shift toward broader acceptance of blockchain technologies.

This strategic pivot has not gone unnoticed globally. Russia’s President Vladimir Putin has increasingly vocalized Bitcoin’s potential as an alternative to the U.S. dollar. Putin recently highlighted Bitcoin’s resilience to sanctions, underscoring its appeal as a geopolitical tool and hedge against fiat currencies. The prospect of a “Bitcoin cold war” looms, with major powers vying for influence in the emerging digital economy.

Corporate adoption further cements Bitcoin’s role as a modern reserve asset. MicroStrategy, a pioneer in Bitcoin-backed strategies, now holds 423,650 BTC valued at $43.6 billion. Tesla has also maintained its position as a significant corporate Bitcoin holder, signaling growing confidence among institutional investors.

Trump’s vision for a Bitcoin reserve aligns with his remarks at the Bitcoin 2024 Conference, where he predicted Bitcoin’s market cap could rival gold’s $16 trillion valuation. Republican Senator Cynthia Lummis bolstered this vision by introducing the BITCOIN Act, advocating for the U.S. government to acquire 1 million Bitcoins over the next five years. The proposed initiative, aimed at addressing America’s $35 trillion national debt, represents a bold attempt to integrate Bitcoin into national fiscal policy.

FOMC meeting and economic events to watch

Cryptocurrency markets often mirror broader economic trends, making it critical to monitor upcoming events with potential to influence trading sentiment. This week, several key events are poised to shape the landscape:

1. FOMC meeting (December 18)
   The Federal Reserve is widely expected to announce a 25-basis-point rate cut. A dovish signal could further fuel risk appetite across markets, including crypto.
2. U.S. GDP growth rate (December 19)
   The third-quarter GDP growth rate stood at 2.8%, following a surge to 3% in the second quarter. Analysts anticipate no change this time, keeping the final figure steady.
3. Retail sales data (December 17)
   Monthly retail sales, a barometer of consumer spending, are projected to offer fresh insights. In October, retail sales rose 2.8% year-over-year, although monthly growth slipped to 0.4% from 0.8%.
4. Core PCE Price Index and Personal Income (December 20)
   The Core PCE Price Index—closely watched as the Fed’s preferred inflation gauge—held steady at 0.3% in October. Personal income rose to 0.6% from 0.3%, while personal spending decelerated from 0.6% to 0.4%. These indicators will provide further clues about the state of inflation and consumer behavior.