The Bitcoin (CRYPTO: BTC) price roared to yet another new record high this morning.
Five hours ago, from the time of writing, the world's original and biggest cryptocurrency topped US$107,780 (AU$169,652) for the first time.
That also saw it command a market valuation of some US$2.2 trillion. Or to put that in real numbers, US$2,200,000,000,000.
Yep, that's one heck of a lot of zeros!
In late morning trade today, the token has retraced a touch to be trading for US$106,051.
Image source: Getty Images
What's been driving the Bitcoin price higher in 2024?
Twelve months ago, the Bitcoin price stood at US$41,348.
The token trended gradually higher for most of the year, catching tailwinds from declining interest rates in the United States and much of the developed world, as well as the launch of several US spot Bitcoin exchange traded funds (ETFs) in the United States.
But the biggest driver sending the token soaring to new record highs came with Donald Trump's resounding US presidential election win on 5 November.
On 5 November, you could have bought a whole Bitcoin for US$67,811. (You could also have bought just part of a Bitcoin, called Satoshis.) That means the Bitcoin price has gained 56% since Trump's victory.
Trump has promised to be much more crypto-friendly than sitting President Joe Biden.
And crypto investors again have the incoming US president to thank for this morning's new all-time high prices.
The Trump crypto trade continues to pay off
It looks like the Bitcoin price has received a big boost from speculations that Trump may follow through on his plans to set up a strategic Bitcoin reserve in the US.
Like the nation's strategic oil reserve, this would enable the US government to tap into its Bitcoin holdings in times of national crises.
"We're going to do something great with crypto," the president said. Citing concerns of competition from China and other nations, he added, "We want to be the head."
Commenting on Bitcoin's new record, Tony Sycamore, an analyst at IG, said (quoted by Reuters), "We're in blue sky territory here. The next figure the market will be looking for is $110,000. The pullback that a lot of people were waiting for just didn't happen, because now we've got this news."
Chris Weston, head of research at Pepperstone, advised caution in the wake of the record-high Bitcoin price.
According to Weston:
I think we still need to be cautious on a BTC strategic reserve and at least consider that this is not likely to happen anytime soon.
Of course, any comment from Trump that offers an increased degree of hope that plans for a strategic reserve are evolving are an obvious tailwind, but this would come with consequences which would need to be carefully considered and well telegraphed to market players.
