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Bitcoin’s historic surge past the $100,000 milestone to a new all-time high of $103,844.05 last week sparked excitement across markets. As expected, the token faced a sharp pullback, falling toward $94,000—adhering to its historic patterns of volatility after hitting new milestones.
But just as quickly, Bitcoin is back, reclaiming the six-figure mark on Wednesday, where it currently sits.
What makes this milestone even more notable is the robust market environment it has emerged in. Beyond the short-term ups and downs, Bitcoin’s broader narrative remains one of steady upward momentum, fueled by growing institutional interest and a regulatory landscape poised for transformation under a pro-crypto administration.
Going beyond the short-term narrative of ups and downs, the broader outlook sets the tone for more new milestones for the OG token despite loud calls from naysayers for caution.
Not to forget the broader geopolitics currently at play, which is keeping risk investors on the sidelines and the bears taking significant positions against high-return assets.
CPI Relief and the Road Ahead
The recent bounce has been buoyed by relief in inflation data. The November Consumer Price Index (CPI) met expectations, sparking renewed hope of a 25-basis-point rate cut at the Federal Reserve's December meeting. This dovish outlook has added fuel to the market’s optimism, with traders setting sights on Bitcoin climbing beyond $110,000 in the short term.
Adding to the market’s strength is renewed activity on major exchanges. Traders note a “passive buyer” lifting prices, while liquidity conditions on platforms like Binance signal continued demand. Analysts now anticipate a cleaner move toward $112,000, backed by technical indicators such as a “reset” Relative Strength Index (RSI).
ETFs Are Winning Big
The ETF story has been pivotal in Bitcoin's recent rally. A record $1 trillion has been invested in U.S. ETFs this year, according to CNBC, with crypto ETFs taking a significant slice of the pie.
In fact, investors have poured more money into Bitcoin and Ether ETFs on the so-called Trump Trade. The first cryptocurrency ETFs that hold Bitcoin directly also saw record-breaking demand, adding to the deluge of new products.
Since Donald Trump was elected president, about $10 billion has flowed into Bitcoin ETFs on a gamble that the market would explode due to Trump's love of the crypto industry.
Meanwhile, Ether ETFs have also made headlines. Spot Ether ETFs, recently greenlit by regulators, attracted $428 million in daily inflows last week, reflecting strong investor confidence. While Ether has yet to break its $4,000 milestone, its performance has been stellar, up last week and outpacing Bitcoin in gains since Trump's victory.
Ether benefits from further tailwinds due to Trump's choice of Paul Atkins to head the SEC.
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Atkins, who is a member of the advisory board of the crypto advocacy group Token Alliance, is seen by some to have the power to change the fact that ETFs investing in the token do not enable investors to receive yield from staking Ether, which is a barrier to their adoption.
Open interest in futures contracts for Ether has soared to record levels on CME Group Inc.'s derivatives platform, surpassing the increase in Bitcoin futures contracts by a wide margin, which indicates that investors expect further gains.
Focus Shifts to Strategic Bitcoin Reserve
The United States possesses petroleum and precious metal reserves, and President-elect Trump has also considered establishing a strategic Bitcoin reserve.
Uncle Sam should probably get in on the action since its value has generally gone up, and some people think it's an excellent portfolio diversifier.
What would be the drawbacks if the US government became a crypto hedge fund?
Does anyone even care about cryptos riding the Trump wave?
Bitcoin has already surpassed milestones that many naysayers said were fantasy figures, with bets now of the OG token reaching half a million dollars and beyond as the next peak.
Beyond the hustle and bustle of short-term trading's regular ups and downs, the reality of a Bitcoin reserve concept is likely to cause prices to skyrocket.
There are many arguments in favour and against.
Of course, a government nod will bring in billions of dollars of inflows, with many betting that a small percentage increase in portfolios will take the OG token's market to over $5 trillion.
As a result of a reserve, the inflows are expected to be comfortably more than the ETFs have done so far.
But the other side of the argument that stands out is who it favours and whether it creates any value for the administration.
Despite the scepticism that has haunted cryptos based on questions related to a lack of an underlying asset and investors' purpose of pushing prices higher, there is no doubt that enthusiasts see this as another boost for the digital industry as a whole.
However, there is a paradox with the Bitcoin reserve concept.
The token was fundamentally created as a decentralised endeavour by eliminating the need for governments and centralised intermediaries.
The Cycle High and Beyond
Bitcoin has surpassed milestones that once seemed like far-off fantasies, and the forecasts are only getting more ambitious. Firms like Bernstein are eyeing a $200,000 cycle high by 2025, while Fundstrat's Tom Lee projects Bitcoin reaching $250,000 next year. These predictions, while bold, reflect the optimism of a market buoyed by transformative shifts and an ever-expanding pool of investors.
As Bitcoin hovers around $100,000, one thing is certain: the crypto narrative is far from over. Whether this marks the start of an extended bull run or the prelude to another round of volatility, the OG token continues to captivate the world—and history shows that the most significant moves often come when least expected.
Elsewhere
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Blockcast
In this episode, Takatoshi Shibayama sits down with Jason Choi, general partner at crypto prop shop Tangent, for a candid exploration of crypto markets. Choi discusses meme coin supercycles, navigating macroeconomic headwinds, and the evolution of project evaluation from speculative hype to real-world traction.
Previous episodes of Blockcast can be found on Podpage, with guests like Peter Hui (Moongate), Luca Prosperi (M^0), Charles Hoskinson (Cardano), Aneirin Flynn (Failsafe), and Yat Siu (Animoca Brands) on our most recent shows.
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Use promo code BLOCKDESK20 at checkout for a 20% discount on tickets here.
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