BITCOIN appears to be back on track toward record highs with the second presidential inauguration of pro-crypto Donald Trump just days away.
The largest cryptocurrency by market value has climbed as much as 13 per cent since Sunday (Jan 12), putting it on pace for the biggest weekly gain since election week in November. Bitcoin, which reached a record US$108,315 in December, had declined in three of the prior four weeks. It was up about 4.9 per cent to US$105,076 as of 3.44 pm in New York.
“The market is now pricing in the Trump inauguration and Trump being actually optimistic on crypto,” said Zaheer Ebtikar, founder of crypto fund Split Capital.
Trump, who was previously a crypto sceptic, is planning to release an executive order elevating crypto as a policy priority and giving industry insiders a voice within his administration, Bloomberg reported, citing people familiar with the plans, on Thursday.
This week’s crypto rebound comes as riskier assets rally broadly following reassuring US inflation data that revived bets on further Federal Reserve interest-rate cuts.
“The producer price index and consumer price index misses lifted the lid on macro worries, which has allowed traders to focus back on upcoming crypto specific catalysts,” said Jake Ostrovskis, a trader at crypto market-making firm Wintermute.
Indeed, XRP, the token linked to Ripple Labs reached a record high of US$3.40 on Thursday, as expectations that the company’s years-long conflict with the US Securities and Exchange Commission could soon end.
Ostrovskis cautioned that the options market is indicating traders are betting higher volatility at the end of January, meaning that the market could be front-running Monday’s inauguration. BLOOMBERG
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