Galaxy Digital founder Michael Novogratz predicted that the price of the largest digital token could soar to US$500,000. — Bloomberg
NEW YORK: Bitcoin notched another record high, climbing above US$93,000 for the first time, with traders exuberant over president-elect Donald Trump’s rhetorical support for crypto.
The digital asset is up more than 35% in the wake of Trump’s Nov 5 election victory.
It reached a record of US$93,462 on Wednesday, before paring the increase.
That’s still put once fanciful price forecasts of US$100,000 well within striking distance.
Trump has pledged to create a friendly regulatory framework for crypto, set up a strategic bitcoin stockpile and make the United States the global hub for the industry.
A one-time crypto sceptic, Trump reversed course after digital-asset companies spent heavily during election campaigning to promote their interests.
While calling the probability of a US bitcoin strategic reserve low, Galaxy Digital founder Michael Novogratz predicted that the price of the largest digital token could soar to US$500,000 if it is enacted.
“If we get the bitcoin reserve, as a guy who owns a lot of bitcoin, I won’t cry,” Novogratz said during an interview Wednesday on Bloomberg Television.“I think bitcoin is heading to US$500,000. It is a different paradigm because it forces every other country in.”
Trump’s stance spread optimism across crypto, lifting the value of the market to an all-time peak.
But thorny questions remain about whether Trump and his Republican lawmakers will be focused first on larger matters like China policy and the United States economy, pushing digital-asset legislation down the pecking order.
“While we wouldn’t rule out further gains, a heck of a lot of good news is now priced in,” IG Australia Pty Market Analyst Tony Sycamore wrote in a note.
One of the strongest performers recently in crypto is dogecoin, a token promoted by billionaire Elon Musk and a meme-crowd favourite.
The Shiba Inu-themed coin, also known as doge, rose 80% or so in the past five days.
Before the election, Musk suggested he could lead a Department of Government Efficiency, whose initials are an apparent nod to the cryptocurrency.
Trump on Tuesday announced the creation of the department to cut wasteful spending, saying Musk would be its co-head.
Dogecoin briefly jumped after the statement before following bitcoin lower.
Meanwhile, traders added to wagers that the Fed will cut interest rates by another quarter point next month after in-line inflation data, spurring gains for Treasury debt.
Treasury yields and the dollar had been climbing, an indication that investors expect inflationary pressures from Trump’s plan to impose trade tariffs and cut taxes.
Stocks resumed their push toward all-time highs.
Bullish options bets are concentrated on the largest token reaching US$100,000, based on data from Deribit.
Inflows into US bitcoin exchange-traded funds topped US$1bil at the start of the week.
“Broad enthusiasm amongst both institutions and retail is driving price action,” said Michael Safai, founding partner at quantitative trading firm Dexterity Capital.
“There’s been a dearth of retail interest this past year, and it has experienced a renaissance since the election.” — Bloomberg
