Bitcoin Soars Amid Optimism About Donald Trump's Support for Digital Currency

The cryptocurrency market is extremely excited as traders predict that Bitcoin (BTC) will reach a new all-time high before the inauguration of cryptocurrency-supporting President-elect Donald Trump on January 20th. With market-dominating volatility, BTC has surged 11% from its Monday low of under $90,000 and has surpassed the $100,000 mark in the past 24 hours, according to data from CoinDesk. This significant move into six-figure territory has been driven by a combination of factors, including a milder-than-expected Core Consumer Price Index (CPI) report, easing concerns about the Federal Reserve's accommodative policies. As fears of inflation abate, market participants are shifting their focus to potential policy announcements from the new administration, particularly those that could benefit cryptocurrencies. The main drivers of the market

1. Concerns about inflation have been reduced The adjusted core CPI report has eased concerns about hawkish monetary policies, which had previously put pressure on risk assets such as Bitcoin. The absence of inflation pressure has provided conditions for BTC to break through the key resistance level of $100,000 before Trump's inauguration. Matt Mena, a cryptocurrency researcher at 21Shares, emphasized the technical and psychological importance of this milestone. Mena noted that "Surpassing $100,000 before Trump's inauguration could help Bitcoin surpass its all-time high of $108,000, paving the way for new record levels as market optimism increases".
2. The expected cryptocurrency support policy President-elect Trump's clear support for policies promoting growth and asset price increases has bolstered the optimistic outlook among market participants. His campaign commitment to establish a national strategic Bitcoin reserve fund has particularly fueled cryptocurrency enthusiasts. Nathan Cox, the investment director at Two Prime, an SEC-regulated investment advisor specializing in digital assets, said: "If Trump signals a strategic Bitcoin reserve on the first day of his term, even without signing it into policy, we could see Bitcoin prices rise rapidly, with asymmetric price discovery driving unprecedented global demand."
3. Traditional market and interrelation The Bitcoin price increase coincides with broader gains in traditional markets. The technology-focused Nasdaq 100 rose over 2% on Wednesday, and BTC's positive correlation with the index reached a two-year high. Meanwhile, the S&P 500 is approaching the significant level of 6,000, which analysts like Mena believe could signal the next phase of the global asset price increase. The changes in the horizon Market participants are preparing for a volatile week as the Trump administration takes office. Paul Howard, a senior director at Wincent, a cryptocurrency market maker, has warned that announcements related to digital asset regulations, banking rules, and strategic Bitcoin reserves could lead to significant price fluctuations. “Expected fluctuations of +/-10% on major cryptocurrencies such as BTC, SOL, ETH, and XRP as the market reacts to policy decisions from the new government. Not all potential outcomes are fully reflected in the current price,” Howard explained. Look ahead As the inauguration ceremony approaches, market sentiment remains optimistic, driven by expectations for a new government's supportive cryptocurrency policy. A potential announcement of a strategic Bitcoin reserve fund could propel BTC to surpass its all-time high, driving significant growth in the overall cryptocurrency market. As traders position themselves to embrace both opportunities and risks, the days ahead promise to be a crucial period for Bitcoin and the broader digital asset landscape.