Bitcoin briefly surged past $93,000 on Wednesday, fueled by growing expectations of additional interest rate cuts by the U.S. Federal Reserve, coupled with President-elect Donald Trump’s supportive rhetoric toward digital assets. The cryptocurrency reached a peak of $93,462 but couldn’t maintain its momentum, retreating to $90,205 by 6:13 a.m. London time on Thursday. The broader cryptocurrency market remained volatile, fluctuating between gains and losses.
The market is grappling with whether Trump’s endorsement of Bitcoin and other cryptocurrencies will sustain the asset’s upward trajectory, potentially pushing it toward the $100,000 mark, or if the recent rally will prompt profit-taking after Bitcoin’s 34% surge since the U.S. presidential election on November 5.
“It’s reasonable to expect that after such an extended rally, opinions will shift, leading to increased market fluctuations,” said Chris Weston, head of research at Pepperstone Group. “However, for now, the trend in Bitcoin is upward, and I anticipate renewed buying interest once any concentrated positions are liquidated.”
The boost in Bitcoin’s price coincided with the latest U.S. inflation data, which aligned with analysts’ forecasts and spurred traders to bet on another quarter-point rate cut by the Federal Reserve in December. At the same time, Trump’s broader economic policies—including tax cuts and protectionist tariffs—have raised concerns about potential inflationary pressures in the future.
Trump, once a skeptic of cryptocurrencies, has pledged to create a crypto-friendly regulatory environment, establish a strategic Bitcoin reserve, and position the U.S. as the global leader in digital assets. His shift in stance followed significant campaign contributions from the crypto industry, which sought to align itself with his political platform.
Despite the bullish rhetoric, questions remain about the practicality and timeline of these proposals. While Trump and the Republican Party control both chambers of government, economic and fiscal priorities are expected to take precedence in the early stages of his presidency.
Billionaire investor Michael Novogratz, founder of Galaxy Digital LP, expressed doubt about the likelihood of a U.S. Bitcoin reserve but suggested that such a move could send Bitcoin prices soaring to as much as $500,000.
The recent rally in Bitcoin is also having a ripple effect across the financial industry, driving record trading volumes and inflows into U.S. Bitcoin exchange-traded funds (ETFs). Additionally, companies like MicroStrategy, which has added Bitcoin to its balance sheet, are contributing to the growth of convertible U.S. debt markets, on track for their strongest month of the year.
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