The Bitcoin price just topped $108,000 for the first time on Tuesday, continuing its charge higher amid a possible clue as to how President-elect Donald Trump may put in motion creation of a U.S. strategic Bitcoin reserve upon taking office. Validation of Bitcoin as an investment also notched another milestone late Friday with MicroStrategy's inclusion in the Nasdaq 100 and its QQQ ETF.
MSTR stock surged Monday morning before giving it all back in the afternoon. However, Coinbase Global, Robinhood Markets and bitcoin miners all joined in the cryptocurrency's ascent.
Bitcoin Strategic Reserve Funding?
During the campaign Trump discussed a $20 billion Bitcoin reserve. He gave every indication that's still on the table during a CNBC interview on Thursday.
Asked by CNBC's Jim Cramer whether a Strategic Petroleum Reserve, but for cyrpto, was coming, Trump answered, "Yeah, I think so."
"We're going to do something great with crypto."
Rep. Cynthia Lummis, Wyo.-R, has proposed that the U.S. government buy 1 million bitcoin over five years, at a current cost of over $100 billion based on today's price. However, that requires buy-in from Congress.
Short of that, some cryptocurrency industry insiders have suggested in recent days how Trump might proceed to establish a bitcoin reserve.
Strike CEO Jack Mallers said on Tim Pool's podcast that Trump plans to sign an executive order on Day One establishing a bitcoin reserve. "People are looking at the dollar stabilization act as it gives the president wide discrepancy to protect the dollar."
Satoshi Action Fund CEO Dennis Porter, a crypto advocacy organization, provided even more detail, posting, "I can confirm that Trump is exploring an Executive Order creating a 'Strategic Bitcoin Reserve.'"
Porter said Trump is exploring use of the Exchange Stabilization Fund for buying Bitcoin.
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Exchange Stabilization Fund Facts
Here's a primer from the Treasury Department: The Exchange Stabilization Fund was established via the Gold Reserve Act of 1934, then amended in the late 1970s.
The Exchange Stabilization Fund conducted gold transactions up through 1971.
The act provides that the Department of the Treasury has a stabilization fund, consistent with its obligations to facilitate an orderly system of exchange rates. The ESF "with the approval of the President, may deal in gold, foreign exchange, and other instruments of credit and securities."
Bitcoin Price, MSTR, COIN
On Sunday, Bitcoin surpassed its previous all-time high near $103,900 from Dec. 5, then rose as high as $107,778 on Monday afternoon. Bitcoin took out that high on Tuesday morning, rising as high as $108,262. The world's largest cryptocurrency has soared around around 156% this year.
Outstanding Bitcoin now have a total value of $2.1 trillion, according to CoinDesk. That's more than four times the $483 million value of Ethereum, which regained the $4,000 level but remains below 2021 highs.
Bitcoin proxy and software company MicroStrategy is set to join the Nasdaq 100 index, effective Dec. 23. The Nasdaq 100 is composed of the largest nonfinancial companies in the Nasdaq composite index. The addition of MSTR means that ETFs, including the highly-popular Invesco QQQ Trust, will become automatic buyers as well.
MSTR rose as much as 7%, but finished fractionally lower in Monday stock market action. Among other crypto-related plays, Coinbase stock rose 1.5%, Robinhood 7.5%, and MARA Holdings 8.1%.
MicroStrategy's massive Bitcoin bet has so far paid off. The company said Monday that it has acquired 439,000 Bitcoin for $27.1 billion, or $61,725 per Bitcoin. That leaves a profit on paper of about $19 billion. However, the stock has an $83 billion market capitalization, even though its enterprise software business is losing money.
Be sure to read IBD's The Big Picture column after each trading day to get the latest on the prevailing stock market trend and what it means for your trading decisions.
