Bitcoin (BTC) broke new records by reaching an all-time high above $106,000 in the first hours of the new week. What are the reasons for the rise? The catalysts behind this rise include increasing speculation that US President-elect Donald Trump will create a Bitcoin reserve and large companies such as Riot Platforms and MicroStrategy purchasing billions of dollars worth of BTC. Apart from these, it was stated that historical data and expectations regarding the interest rate decision of the US Federal Reserve, which will be announced this week, are also included. Bitcoin rose above $106,000 today to reach an all-time high as investors grew more hopeful of a Fed rate cut over the weekend, experts told CNBC. According to experts, the BTC rally is being driven by expectations of a 97% probability of a 25 basis point rate cut, which is considered positive for Bitcoin due to its correlation with lower interest rates, a weaker dollar, and an expanding money supply. Data Shows Bitcoin Rally Will Continue! Analysts speaking to Coindesk said that BTC rose on optimism regarding changes in US crypto policy. Augustine Fan, senior manager at SOFA, said that optimism in US crypto policies has increased inflows into Bitcoin ETFs, thereby accelerating the BTC rally. Fan said that unlike previous crypto cycles, traditional finance (TradFi) inflows have dominated the BTC rally in the current cycle. Fan said that he thinks that more and more traditional companies will need cryptocurrencies in light of the huge revenue opportunities and changes in the political environment. “This effect will only grow and accelerate the rally. Also, Bitcoin’s recent price action has shown that BTC is forming higher lows, which is an indication of a sustainable uptrend.” Crypto exchange BTSE COO Jeff Mei also evaluated the recent rise in Bitcoin, stating that BTC still has a great potential for growth and that he expects more growth. Mei stated that Bitcoin is ready for a rise called the “Santa Claus Rally” according to historical data and said that according to data from the last eight years, Bitcoin has closed December in the green six times since 2015 and increased by up to 46 percent. “We still think Bitcoin has tremendous upside potential and could easily reach $125,000 by 2025. While some say the upside has been priced in over the last month, we believe the upside is just beginning. The idea of institutions, family offices, and high-net-worth individuals allocating 1%-3% of their portfolios to Bitcoin and crypto may take some time, but when it happens, prices will skyrocket. “There are also many reasons to be optimistic about the continued rally, given Trump’s pro-crypto appointments, continued rate cuts, and stimulus spending from China.” *This is not investment advice. Continue Reading: Why Did Bitcoin (BTC) Rise? Will the Rally Continue? Analysts Explained!
