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Bitcoin has hit a new all-time high, rising to $97,852 on Binance. The cryptocurrency is up 5% in the past 24 hours and is up as much as 43% in the past 16 days since November 5. The momentum shows no signs of slowing down as the BTC price continues to steadily rise. Several key factors are driving this remarkable rally:
#1 US Strategic Bitcoin Reserve Trade
Following Donald Trump’s victory in the US presidential elections, market sentiment has changed significantly. The initial “Trump Trade” has evolved into the “US Bitcoin Reserve Trade,” fueled by speculation that newly elected President Trump could establish a Strategic Bitcoin Reserve (SBR). This follows his pledge at the Bitcoin 2024 conference in Nashville.
Industry insiders such as David Bailey, CEO of BTC Inc and Trump campaign advisor, and Dennis Porter, CEO of Satoshi Act Fund, have hinted at the possibility of the SBR becoming a reality. Both have pushed for the SBR to be created by executive order within the first 100 days of Trump’s presidency. They warn that the United States may fall behind in the global race to accumulate BTC.
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Bailey revealed on November 9: “There is at least one nation-state that has actively acquired Bitcoin and is now a top 5 holder. Hopefully we’ll hear from them soon.” He emphasized his certainty with a meme, indicating that his information is based on knowledge rather than speculation. Mike Novogratz, CEO of Galaxy Digital, confirmed in a recent interview with Bloomberg TV that “countries are already buying BTC in large quantities.”
The “US Bitcoin Reserve Trade” is expected to continue until Trump’s inauguration on January 20. It remains to be seen whether Trump will follow through on his promises, possibly moving more than 208,000 BTC seized by law enforcement to the reserve or even adopting Senator Cynthia Lummis. ‘Bitcoin Act proposal to buy 1 million BTC in five years.
#2 Potential Appointment of a ‘Crypto Czar’
A leak on Wednesday suggests that President-elect Trump’s team is discussing creating a new White House position dedicated solely to Bitcoin and crypto policy. Sources familiar with the transition efforts indicate that candidates are being vetted for the role.
If enacted, this would be the first-ever Bitcoin and crypto-specific stance from the White House, underscoring the influence the nascent industry will wield in the incoming administration. It is unclear whether the role will be a senior staff position in the White House or a “crypto czar” overseeing policy and regulations within the federal government. Crypto industry advocates are pushing for a direct line to Trump – big news for the entire industry.
#3 Launch of Bitcoin ETF Options
The introduction of Bitcoin ETF options has had a significant impact on the market. BlackRock’s iShares BTC Trust (IBIT) ETF options, launched on November 19, 2024, had an unprecedented notional exposure of $1.9 billion on their first trading day. Bloomberg ETF expert James Seyffart stated: “IBIT’s final number of first-day options totals just under $1.9 billion in notional exposure traded across 354k contracts. 289k were calls and 65k were puts. That’s a ratio of 4.4:1. These options were almost certainly part of the move to the new all-time Bitcoin highs today.”
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Jeff Park, Head of Alpha Strategies at Bitwise Invest, recently highlighted the groundbreaking nature of Bitcoin ETF options:
With the SEC’s approval to list and trade Bitcoin ETF options, we are about to witness the most extraordinary positive ‘vol’ of ‘vol’ in financial history. For the first time, Bitcoin’s notional value will be ‘fractionally captured’ with ETF options. This marks the most monumental progress possible for the crypto market.
Park explained that Bitcoin ETF options provide a regulated market where the Options Clearing Corporation (OCC) protects clearing members from counterparty risk, allowing Bitcoin’s synthetic notional exposure to grow exponentially. He emphasized that this could lead to an explosive recursive effect on Bitcoin’s price due to its unique volatility characteristics and ‘volatility smile’.
If there’s one thing to read about the groundbreaking nature of Bitcoin ETF options today, read this (and bookmark it) for 2025 – it’s going to be wild. pic.twitter.com/On2DmUsbHX
— Jeff Park (@dgt10011) September 20, 2024
#4 Rise in Spot Market and Bitcoin ETFs
The latest rally was also driven by significant spot market activity. High spot bids have pushed the price higher, with yesterday’s inflows into BTC ETFs a crucial factor. Inflows amounted to $773.4 million, with BlackRock contributing $626.5 million, Fidelity $133.9 million, Bitwise $9.2 million and ARK Invest $3.8 million. Over the past three days, US spot Bitcoin ETFs have purchased a whopping $1.856 billion worth of Bitcoin.
Good morning,
Yesterday’s Bitcoin ETF flows were positive at $773.4 million.
Blackrock earned $626.5 million, Fidelity $133.9 million. (BTC, the mini ETF, is still missing data)
Price is slowly rising from $92K to $97k now.
Shitcoins are being slaughtered.source:… pic.twitter.com/WMYIj7WiYj
— WalvisPanda (@WalvisPanda) November 21, 2024
The total net asset value of US Bitcoin spot ETFs has surpassed $100 billion. Twelve Bitcoin ETFs, including those from BlackRock and Fidelity, were issued in January and reached this milestone in just ten months.
At the time of writing, BTC was trading at $96,920.
Featured image created with DALL.E, chart from TradingView.com