Bitcoin Soars: Trump Victory Ignites Crypto Frenzy, Will $200,000 Target Price Become Reality?

Bitcoin Soars: Trump Victory Ignites Crypto Frenzy, Will $200,000 Target Price Become Reality?21st Century Business Herald reporter Lai Zhentao reports from Guangzhou, In less than a week after the election, Bitcoin prices have reached new all-time highs. In the early hours of Tuesday Beijing time, Bitcoin briefly touched an all-time high of US$89,253

Bitcoin Soars: Trump Victory Ignites Crypto Frenzy, Will $200,000 Target Price Become Reality?

21st Century Business Herald reporter Lai Zhentao reports from Guangzhou, In less than a week after the election, Bitcoin prices have reached new all-time highs. In the early hours of Tuesday Beijing time, Bitcoin briefly touched an all-time high of US$89,253. It retraced slightly by noon, closing at US$88,108.22 per coin as of 12:00. Bitcoin had just broken through the US$80,000 mark on Sunday night and within two days it was approaching the US$90,000 target. Over the past week, Bitcoin has gained 29.66%. Year-to-date, it has surged 108.03%.

Bitcoin leader MicroStrategy continues to hoard coins aggressively. On Monday, the company announced that it purchased approximately 27,200 Bitcoins for about US$2.03 billion between October 31 and November 10, its largest purchase since it began acquiring digital assets over four years ago. With this latest purchase, MicroStrategy's Bitcoin holdings have a market value of approximately US$24 billion. The surge in Bitcoin has also driven MicroStrategys stock price skyrocketing. It closed up 25.73% on Monday, hitting an all-time high of 340.0. Since August 2020, MicroStrategy's share price has risen over 2500%, while Bitcoin has risen about 660% during the same period.

Bitcoin spot ETFs have also reached a historic moment after a large influx of funds. Last Thursday, the total amount of money flowing into Bitcoin spot ETFs reached US$1.37 billion, setting a record for the largest single-day inflow. From its inception at the beginning of the year to yesterday, the cumulative inflow of Bitcoin spot ETFs has reached US$26.22 billion. Among the 11 spot ETFs in the United States, iShares Bitcoin ETF (IBIT) under BlackRock has the largest asset base. The latest data show that its asset base (US$33.2 billion) has surpassed that of iShares Gold ETF (US$32.9 billion) under BlackRock for the first time. This reversal is quite symbolic for Bitcoin. Gold has inherent safe-haven attributes and reserve asset status, while the BlackRock iShares Gold ETF started trading in January 2005, and the iShares Bitcoin ETF only launched in January this year. Bitcoin was able to achieve a reversal in fund size within 10 months, partly reflecting the shift in market investment preferences.

Historic Breakthrough

Within a week, Bitcoin has repeatedly set new all-time highs. Last Wednesday, after Trump secured his victory in the election, Bitcoin broke through US$75,000 per coin for the first time. Last Thursday, after the Federal Reserve announced a 25-basis-point rate cut, Bitcoin surged in a frenzy, breaking through the US$80,000 mark on Sunday. Now, Bitcoin, having briefly breached US$89,000, is trying to break the key resistance level of US$90,000.

Market funds are aggressively increasing their holdings of Bitcoin. On January 10 this year, the first 11 Bitcoin spot ETFs in the United States were launched. The total size of the assets under management was around US$28 billion. By yesterday, this figure had almost tripled to US$82 billion. The BlackRock Bitcoin ETF IBIT is the largest ETF spot fund in the market. Last Wednesday, trading volume reached a new high of US$4.1 billion. The next day it absorbed US$1.1 billion in net inflows, setting a new record for the largest single-day inflow. Recently, IBITs asset size has surpassed that of the gold trust fund IAU for the first time, partly reflecting the influx of large sums of money into Bitcoin while gold has been relatively neglected.

This is also reflected in the price trend. Bitcoin has soared while gold has seen a sharp drop. On the day the election results were announced last week, gold fell by the most in more than two years, dropping 3.93% over the past week. Crypto macro analyst Noelle Acheson said that the Trump administrations introduction of clearer crypto rules could lead some investors to prefer Bitcoin over gold.

Trumps Support, Musks Boost

Why is the bullish sentiment for Bitcoin exceeding that of traditional investment targets like gold? HashKeyGroup Chief Analyst Ding Zhaofei told 21st Century Business Herald that Trump is the most Bitcoin-friendly president to date. During his campaign, he promised to include Bitcoin in government reserves, establish a Presidential Advisory Committee, and replace the SEC chair. The gradual implementation of these favorable measures will create a more favorable market environment for Bitcoin, expanding its upward potential.

Recently, media reports have stated that Trump is seeking out individuals supportive of cryptocurrencies to fill key positions in financial regulatory bodies like the Securities and Exchange Commission, in order to fulfill his election promise to make the United States the global cryptocurrency capital. The report, citing unnamed sources, says Trumps aides are considering current regulators, former federal officials, and financial industry executives for important leadership positions. Many of them have publicly expressed support for cryptocurrencies.

From a macro perspective, interest rate cuts have also injected more liquidity into the market. Ding Zhaofei said that last weeks decision by the Federal Reserve to lower the benchmark interest rate by 25 basis points will provide more funding for high-risk assets such as Bitcoin, pushing up their prices. Furthermore, the low interest rate environment encourages investors to seek high-yield investment channels, increasing demand for cryptocurrencies.

While the Trump trade is the biggest contributor to the recent excitement in the crypto world, Musk's support is also crucial. Ding Zhaofei pointed out that Musk has consistently supported Bitcoin, Dogecoin and other cryptocurrencies. Tesla began accepting Bitcoin payments as early as 2020. This time, with Trump's election, Musk, as Trump's most important campaign partner and an early Bitcoin influencer," is expected to lead the market forward.

$200,000 Target Price, Can It Become Reality?

The booming derivatives market shows that the market is betting that Bitcoin prices will continue to rise. Coinglass data shows that on Tuesday morning, the open interest of Bitcoin call options with a strike price of US$80,000 has risen to US$1.88 billion, and the open interest of call options with a strike price of US$100,000 has also reached US$1.71 billion. The bets on the US$100,000 target are almost as high as those on US$80,000.

Institutional forecasts are also generally optimistic. Geoff Kendrick, Global Head of Digital Asset Research at Standard Chartered Bank, said that if the Republicans sweep the House and Senate, the total market capitalization of cryptocurrencies will triple by the end of 2026. Fundstrat co-founder Tom Lee believes Bitcoin could reach US$100,000 this year. Standard Chartereds Geoff Kendrick previously predicted that after Trumps victory, Bitcoin could reach US$125,000 by the end of this year. Bernsteins prediction is even bolder, putting the price of Bitcoin at US$200,000 by 2025 and US$1 million within a decade.

The main forces entering the market also have a long-term bullish attribute. Gemini co-founder Cameron Winklevoss said that the breakthrough of Bitcoin above US$80,000 was driven mainly by the continuous institutional demand through Bitcoin spot ETFs, not by retail investor activity. This sticky demand from institutional investors is a sign of long-term bullish sentiment, and the current market cycle is still in its early stages.

Digital Economy Rises, Bitcoin Soars with Tech Giants

Wang Yingbo, a digital economy scholar at the Shanghai Academy of Social Sciences, told 21st Century Business Herald that the long-term core driving force behind the surge in Bitcoin is the trend of shifting from carbon-based to silicon-based, that is, the rise of the digital economy. This is reflected in the Nasdaqs continued new highs. Although the short-term factor behind the upward trend is Trumps victory in the US election, the more important factor is that the US will further relax regulations on digital economy companies, accelerating the deployment of digital technologies such as artificial intelligence. As a digital asset, Bitcoin will soar with tech giants. Tesla, whose market capitalization has just surpassed US$1 trillion, is also expected to continue to rise, and we can expect the emergence of tech companies with market capitalizations of US$5 trillion or even US$10 trillion in the near future.

Correction Risk, Cautious Entry

However, from a medium-to-short-term perspective, investors still need to be aware of the risk of corrections. Wang Yingbo said that the rally in Bitcoin could continue until next year when the Trump administration takes office. If the policies are