This week in crypto, Bitcoin once again captured global attention, reaching a new high of US$99,000 (AU$151,000) today, just shy of the highly anticipated US$100,000 milestone. With record-breaking volumes and bullish sentiment sweeping the markets, Bitcoin remains the centre of discussions as 2024 approaches a pivotal year for the asset class.

Record stablecoin inflows signal strong demand for Bitcoin, with many attributing these movements to increased market confidence. Analysts suggest this surge in liquidity could propel Bitcoin beyond the six-figure barrier, potentially paving the way for a historic new all-time high. This momentum has reinvigorated bullish sentiment across the crypto community, as investors watch closely to see how the market evolves.

Adding to the week’s excitement, MicroStrategy made headlines after completing a US$3 billion capital raise to buy additional Bitcoin, reinforcing its position as the largest publicly held Bitcoin owner. Despite this, market volatility hit hard, with MicroStrategy’s shares dropping 25%, even as its unrealised Bitcoin gains exceeded US$15 billion. Notably, the firm’s trading volumes outpaced all U.S. spot Bitcoin ETFs combined, highlighting its substantial market influence.

Meanwhile, President-elect Donald Trump reiterated his commitment to establishing a strategic Bitcoin reserve during his upcoming term. First proposed at the Bitcoin 2024 conference in Nashville, Tennessee, the initiative aims to position the United States as a global leader in digital assets by stockpiling Bitcoin. The renewed focus on this plan has ignited discussions within the crypto community and among financial analysts. Experts believe it could enhance Bitcoin’s status as a legitimate reserve asset while prompting other nations to adopt similar strategies, potentially reshaping global financial dynamics.

On the institutional front, Bitcoin ETFs in the U.S. now manage over US$104 billion in assets, putting them on track to surpass gold ETFs in net holdings, a remarkable milestone. BlackRock’s Bitcoin ETF options launched this week demonstrating robust demand for regulated Bitcoin investment products, with US$1.9 billion traded on the first day. Market participants have praised the launch of U.S. spot Bitcoin options for injecting much-needed liquidity and sophistication into the market.

Despite widespread optimism, caution lingers among some crypto analysts. While Bitcoin nearing the US$100,000 mark is undoubtedly significant, market watchers warn that reaching this psychological milestone could prompt short-term profit-taking and heightened volatility. Cathie Wood of ARK Invest remarked that while Bitcoin’s performance is impressive, the asset still has “a long way to go” in terms of adoption and utility.

As Bitcoin hovers just below US$100,000, all eyes are on whether it can surpass this historic threshold before year-end. With growing institutional interest and the prospect of a U.S. Bitcoin reserve adding to the excitement, one thing remains clear: Bitcoin’s journey continues to captivate both the crypto community and the broader financial world.

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