DailySun
What is driving Bitcoin’s remarkable ascent to $108,000? With influences ranging from Trump’s address to ETFs and substantial acquisitions by MicroStrategy, is a significant institutional supply squeeze on the horizon?
Bitcoin reaches unprecedented heights
Bitcoin (BTC) has regained the limelight. On December 17, BTC surged to an all-time peak of $108,260, marking over a 50% increase since the U.S. elections. As of this writing, on the 17th, it is trading at about $106,663.
The recent rally for BTC has been fueled by President-elect Donald Trump’s suggestion to create a U.S. Bitcoin strategic reserve, igniting excitement in the markets.
Trump’s proposal, delivered at the New York Stock Exchange on December 12, aims to ensure that the U.S. stays ahead of global competitors in the digital asset arena. He emphasized the importance of America taking significant strides in crypto and creating reserves akin to its existing strategic oil reserves.
The concept of a Bitcoin reserve isn’t entirely novel. It was initially proposed through the BITCOIN Act, spearheaded by Republican Senator Cynthia Lummis. This initiative envisions the U.S. acquiring 1 million BTC over the next five years to help mitigate the escalating $35 trillion national debt.
Another significant contributor to this surge has been institutional involvement, particularly from MicroStrategy, a firm known for its aggressive Bitcoin investments.
In the last week, MicroStrategy revealed it had acquired $1.5 billion in BTC at an average price of $100,386 per coin. This latest purchase brings its total Bitcoin holdings to 439,000 BTC, valued at approximately $47 billion.
The company’s Bitcoin strategy has yielded massive returns, skyrocketing its market cap from $1.1 billion in 2020 to nearly $100 billion today.
Furthermore, MicroStrategy’s inclusion in the Nasdaq 100 index next week is anticipated to enhance demand for its stock as funds and ETFs adjust their portfolios.
Meanwhile, Ethereum (ETH) hasn’t lagged in this crypto surge. After a period of stagnation, ETH exhibited robust movement, reaching a seven-day high of $4,106 on December 16—a weekly gain of 6%.
While Ethereum has seen a slight retracement due to profit-taking, it remains stable around the $3,950 mark as of this writing.
Let’s explore the critical developments driving Bitcoin and Ethereum, assess the macroeconomic indicators fueling this bullish run, and consider expert predictions for what may lie ahead.
Institutional Influence
Both Bitcoin and Ethereum are demonstrating strong momentum, but the underlying narrative is clearer when we examine ETF inflows, liquidations, and futures open interest.
Spot Bitcoin ETFs have experienced a remarkable surge this month. Since the beginning of December, they’ve seen consistent inflows every day, accumulating over $5.16 billion as of December 16.
These inflows have elevated the total assets under management for Bitcoin ETFs to $123 billion, reflecting strong confidence, particularly from institutional investors.
Conversely, Ethereum ETFs reveal a different pattern. From their launch on July 23 to December 3, inflows remained modest, totaling just $733.6 million. Compared to Bitcoin’s inflow performance, this number appears relatively small. However, recent trends indicate a shift in momentum.
Since December 4, Ethereum ETFs have witnessed consistent…
