Bitcoin extended its record rally on Monday.
The price of the oldest and best-known cryptocurrency rose to $107,821 on the Bitstamp trading platform in the evening. Recently the price fell slightly again, but at around $106,000 it was still well above the round mark of $100,000.
Bitcoin has been on an upward trend for almost two years, taking the price from less than $20,000 to six-digit highs. The latest driver of the rally is the election of Donald Trump as the new US President. Since then, the price has increased by around half. Trump is considered a supporter of cryptocurrencies.
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“In particular, the prospect of introducing strategic Bitcoin reserves is grist for investors’ mill,” wrote market analyst Timo Emden from Emden Research. Trump is likely to keep investors happy with his promises until he moves into the White House. But this could also increase the potential for disappointment. Investors should remember that all plans are not set in stone.
In addition, the expectation of further key interest rate cuts by major central banks is supporting Bitcoin. The US Federal Reserve will publish its interest rate decision on Wednesday evening. A further reduction of 0.25 percentage points is expected. This is good news for investments that are considered risky, such as cryptocurrencies, because it reduces the attractiveness of fixed-interest investments.
Bitcoin is currently receiving a boost from the prospect of further purchases of the cryptocurrency by the US software company MicroStrategy. The company boss and co-founder Michael Saylor is considered a hardcore Bitcoiner and wants to transform his company into a Bitcoin company.
MicroStrategy’s strategy seems to be working, at least for now, as shown by the company’s inclusion in the technology-heavy US stock index NASDAQ 100 as of December 23rd of this year. The move reflects the triumph of Bitcoin, Emden continued.
According to a list from the provider Coinmarketcap.com, the market value of Bitcoin is currently almost $2.1 trillion. That’s around 56 percent of the total market capitalization of $3.7 trillion of all just over 10,000 cryptocurrencies.
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FRANKFURT (dpa-AFX)