Trump Returns to the White House, Bitcoin Hits a New High, Institutional Funds Flood In

Trump Returns to the White House, Bitcoin Hits a New High, Institutional Funds Flood InBitcoin has continued to climb in recent days, breaking through $80,000 and $85,000 consecutively, setting new all-time highs multiple times. As of 11:14 AM Beijing time on November 12th, the price of Bitcoin surged past $87,800

Trump Returns to the White House, Bitcoin Hits a New High, Institutional Funds Flood In

Bitcoin has continued to climb in recent days, breaking through $80,000 and $85,000 consecutively, setting new all-time highs multiple times. As of 11:14 AM Beijing time on November 12th, the price of Bitcoin surged past $87,800. Other cryptocurrencies also rose collectively. As of 9:00 AM Beijing time, Dogecoin saw a cumulative increase of over 100% in the past seven days; Ethereum (ETH) rose over 5% in the past 24 hours and over 40% in the past seven days; Binance Coin (BNB) increased by over 2% in the past 24 hours.

However, this upswing is also accompanied by risks. Data from Coinglass shows that over the past 24 hours, over 150,000 accounts have been liquidated, totaling over $570 million; in the past 12 hours, short-sellers accounted for over 70% of the total liquidated amount.

Meanwhile, US stocks with cryptocurrency concepts also experienced a surge. Canaan Inc. rose over 41%, MicroStrategy jumped over 25%, and Coinbase increased over 19%.

This climb in Bitcoin prices is believed to be closely related to the favorable expectations associated with Trump winning the US presidential election. During his campaign, Trump expressed support for the digital asset market multiple times, promising to consider Bitcoin as a strategic asset, reduce regulatory barriers, and promote market development.

Besides policy expectations from Trump, the continuous influx of institutional funds is also a significant driving force behind Bitcoin's price surge.

Institutional Giants are Adding to their Bitcoin Holdings

On the evening of November 11th, Bitcoin prices suddenly surged significantly. According to news, MicroStrategy, a US-listed company and a major Bitcoin holder, issued a statement announcing a purchase of approximately 27,200 Bitcoins for around $2.03 billion (approximately 14.6 billion yuan), marking the largest buy order since December 2020. Stimulated by this news, MicroStrategy's stock price also soared, rising over 30% during the day, and closing over 25% higher. The company's total market capitalization climbed to $688.99 billion (approximately 5 trillion yuan).

As early as October 30th, MicroStrategy announced the "21/21 plan," which aims to raise $42 billion through $21 billion in equity and $21 billion in debt over the next three years to buy more Bitcoin. Of the $21 billion equity financing, over $3.5 billion has already been raised.

In recent years, MicroStrategy has been heavily buying Bitcoin to hedge against inflation, making it the company with the largest Bitcoin holdings among US-listed companies. As of September this year, MicroStrategy held over 250,000 Bitcoins. As of October 31st, the total value of its holdings exceeded $17 billion. Therefore, MicroStrategy's stock price is deeply tied to Bitcoin. Since 2024, MicroStrategy's stock price has accumulated a gain of 438%, while Bitcoin's cumulative increase during the same period is 101%.

Besides MicroStrategy, another major Bitcoin holder, BlackRock, has surpassed gold in the asset management scale of its Bitcoin ETF. On Monday, during US stock trading, BlackRock's Bitcoin ETF IBIT surpassed the asset management scale of one of the largest gold ETFs, iShares IAU. Data from FactSet shows that IBIT received approximately $1 billion in inflows over the past week, with total inflows reaching $27 billion since its launch in January. As of last Friday, the asset management scale of Bitcoin ETF IBIT reached $34.3 billion, while IAU's asset management scale was slightly lower at $33 billion.

Trump's Support for Cryptocurrencies

As the former and newly elected US president, Trump has participated in numerous cryptocurrency events, including attending the Bitcoin 2024 Global Conference and issuing NFT (Non-Fungible Token) with a tough-guy image.

During his campaign, Trump also expressed support for the digital asset market multiple times, promising to consider Bitcoin as a strategic asset, reduce regulatory barriers, and promote market development.

Standard Chartered Bank believes that Trump may introduce a series of policies to reshape the US cryptocurrency industry, specifically including the following four aspects:

1. Repeal SAB121. The SEC's guidance document SAB121 on digital assets requires entities acting as custodians of crypto assets to list those assets on their balance sheets and create equivalent liabilities. Repealing SAB121 is expected to pave the way for further adoption of digital assets by institutional investors.

2. Passage of the Stablecoin Bill. Stablecoins are becoming a crucial use case for digital assets in the real world. In the past 12 months, three important bills aimed at establishing a regulatory framework for banks issuing stablecoins have been submitted to the House of Representatives. However, under the Trump administration, more progress is expected to be made in early 2025.

3. SEC Leadership Change. Under current Chairman Gary Gensler, the SEC has taken a firm stance on digital assets. Trump has explicitly stated during his campaign that he will replace Gensler.

4. Possibility of a Bitcoin Reserve Fund. While this is a low-probability event, Trump mentioned in July that he will retain the Bitcoin owned by the government (210,000 BTC at that time), which could have a significant price-boosting impact on this small asset class.

Gao Chengshi, executive member of the Blockchain Special Committee of the China Computer Society, told media reporters that after returning to the White House, Trump should fulfill most of his promises regarding virtual currency, namely further relaxing regulations on virtual currency transactions. However, it is important to acknowledge that many countries and regions still employ traditional centralized approaches to regulate virtual currency, an approach that may still be feasible in certain times and regions. As blockchain and Web3 (the third stage of internet development, known as the "decentralized network") expand their influence, a new decentralized governance strategy that aligns with them will inevitably arise.

Therefore, the Bitcoin policy of the US Trump administration still requires further observation and should not be viewed with excessive optimism.

Conclusion

Trump's return to power and the continuous inflow of institutional funds have provided new momentum for Bitcoin's price surge. However, the market also needs to be wary of potential risks, including regulatory policy changes, market bubble risks, and technological risks.

Overall, the future trajectory of the Bitcoin market remains uncertain, and investors need to remain vigilant and invest rationally.