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Bitcoin reached an all-time high of $106,496 early Monday, continuing its remarkable rally driven by political and economic factors. The surge comes amid optimism surrounding President-elect Donald Trump’s pro-crypto administration and plans to deregulate digital assets, including a proposal to establish a national Bitcoin strategic reserve.
While Bitcoin’s price pulled back slightly to $106,170 as of Monday afternoon, its 3.2% daily gain showcases the market's strength. However, concerns loom as the Federal Reserve's upcoming policy meeting could signal a more hawkish approach, potentially slowing the momentum.
Historically, cryptocurrencies like Bitcoin have thrived in low-interest-rate environments. As the Federal Open Market Committee convenes on Dec. 18, a more cautious tone from Fed Chair Jerome Powell could affect crypto prices. Analysts warn that hints of a pause in the Fed's rate-cutting cycle could dampen Bitcoin’s trajectory, as monetary easing has been a significant driver of risk asset appreciation.
Despite these potential challenges, Bitcoin has proven resilient. It is up more than 50% since Trump’s election victory and a staggering 148% year-to-date. The president-elect’s appointment of crypto advocates, including Paul Atkins to lead the Securities and Exchange Commission, has bolstered confidence in the market. Atkins is expected to replace Gary Gensler, a controversial figure in crypto regulation, signaling a more favorable landscape for digital assets.
Bitcoin’s new peak has sent ripples across crypto-related stocks. MicroStrategy, known for its substantial Bitcoin holdings, rose 2.7% in early trading, while Coinbase and Robinhood Markets gained 3.8% and 3.5%, respectively. The announcement that MicroStrategy will join the Nasdaq 100 on Dec. 23 and its recent $1.5 billion Bitcoin purchase are seen as additional bullish catalysts.
Earlier this month, Bitcoin breached the $100,000 mark for the first time but remained range bound until this week’s breakout. Analysts now eye even loftier targets, with some predicting $150,000 by the end of 2025. FxPro’s Alex Kuptsikevich noted that Bitcoin’s move into record territory after weeks of consolidation is a critical signal of accelerated growth potential, barring any disruptive news from traditional financial markets.
Every day, as Bitcoin firmly enters financial markets globally, partnership between the Federal Reserve and the Trump administration will determine how far the currency will go.
