A New Era for Digital Assets?
The price of Bitcoin, the largest virtual currency, rose to an unprecedented US$106,493 on Monday in Asia, surpassing its previous peak from December 5. This remarkable surge can be attributed to a combination of factors, including President-elect Donald Trump’s support for digital assets and optimism surrounding MicroStrategy Inc.’s inclusion in a key US stock gauge.
Trump’s Support for Digital Assets
President-elect Donald Trump has been making waves with his pro-digital asset stance. His administration is poised to create a friendly regulatory backdrop for these emerging technologies, undoing the crackdown imposed by President Joe Biden’s outgoing administration. The Republican has also backed the idea of a strategic national Bitcoin stockpile, although many question the feasibility of this proposal.
MicroStrategy Inc.’s Inclusion in Nasdaq 100 Index
The news of MicroStrategy’s inclusion in the Nasdaq 100 Index, a key US stock gauge tracked by various investment funds, has been a significant driver of optimism. The software maker has transformed into a leveraged bet on Bitcoin as it raises billions of dollars to invest in the digital asset.
"Now that MicroStrategy is in Nasdaq, index funds may buy its shares, and that will help the company to raise more equity to buy more Bitcoin," said Sean McNulty, director of trading at liquidity provider Arbelos Markets. This development has further solidified the link between MicroStrategy’s success and Bitcoin’s price.
A Seven-Week Winning Streak
Bitcoin has cemented a seven-week winning streak, the longest such run since 2021. While this remarkable achievement is undoubtedly a testament to the resilience of the cryptocurrency market, it also raises concerns about a potential pullback. "A pullback may be coming," wrote IG Australia Pty Market Analyst Tony Sycamore in a note, suggesting that investors should remain cautious.
Growing Demand for Digital Assets
The growing interest in digital assets is reflected in demand for exchange-traded funds (ETFs) investing in these emerging technologies. According to data, US$12.2 billion of net inflows have been attracted by ETFs investing directly in Bitcoin since Trump’s victory in the presidential election on November 5. Similar products for Ether have seen US$2.8 billion in subscriptions over the same period.
A New Era for Digital Assets?
The inclusion of MicroStrategy in the Nasdaq 100 Index represents a significant milestone for digital assets, marking institutional acceptance and paving the way for further investment in these emerging technologies. As the market continues to evolve, it remains to be seen whether this momentum will sustain or if a correction is looming.
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