On December 15th, Bitcoin’s price surged almost 5%, setting a new all-time high over $106,000 amid growing speculation about its potential role as a United States reserve asset. The cryptocurrency peaked at $106,554 before experiencing a slight pullback, according to TradingView data. This new high surpasses the previous record of $104,000 set earlier on December 5th.
Investor Optimism and Regulatory Speculation
CK Zheng, the chief investment officer at ZK Square, referred to this period as “Santa Claus mode” for Bitcoin, driven by a fear of missing out among investors who are keen to increase their stakes in the cryptocurrency. Zheng predicts that Bitcoin could reach $125,000 by early 2025. However, he cautioned that a potential 30% correction might follow, as much of the optimism regarding policy changes from the upcoming Trump administration may already be reflected in current prices. A 30% drop from the anticipated high would bring Bitcoin’s price down to around $87,500.
The speculation around Bitcoin’s rise in value is further fueled by comments from Jack Mallers, founder and CEO of Strike, who suggested that US President-Elect Donald Trump could issue an executive order on his first day in office to designate Bitcoin as a reserve asset. “There’s potential to use a day-one executive order to purchase Bitcoin,” Mallers stated, emphasizing that while it wouldn’t amount to 1 million coins, it would represent a significant position.
In addition to federal actions, state-level initiatives are also making headlines. Dennis Porter, CEO of Satoshi Action Fund, revealed that a third Bitcoin reserve bill is being drafted, following earlier bills in Texas and Pennsylvania. He shared, “We had Pennsylvania, and we had Texas. And now we have another state coming on board. And they sent me the draft. So I know it’s real,” during a December 15 X Spaces session. Porter anticipates at least 10 states will introduce similar legislation.
The financial landscape could see further impacts with analysts expecting a 0.25% interest rate cut by the US Federal Reserve on December 18th, potentially boosting Bitcoin’s price further. Another catalyst behind the recent surge in Bitcoin’s price could be a new rule by the Financial Accounting Standards Board, which allows institutions to record the value of their crypto assets more realistically, applicable to fiscal years beginning after December 15th.
Currently, market sentiment for Bitcoin is in the “Extreme Greed” zone, with a score of 83 out of 100 on the Crypto Fear and Greed Index, the highest since its breakthrough to $100,000 on December 5th.
What The Author Thinks
The ongoing developments surrounding Bitcoin—from potential governmental endorsements to legislative actions at the state level—illustrate a significant shift in how cryptocurrencies are perceived and integrated into the financial system. This shift not only underscores the growing acceptance of digital currencies but also highlights the innovative approaches being considered by policymakers to leverage these assets. The dual influence of potential regulatory support and evolving financial policies could continue to shape Bitcoin’s trajectory, offering intriguing possibilities for its role in global finance.
