Bitcoin is on a tear, rallying towards its largest weekly gain since the US election week in November, driven by anticipation surrounding pro-crypto President Donald Trump’s second inauguration. The world’s leading cryptocurrency has surged approximately 11% since Sunday, reaching $104,512 on Thursday, a 4.96% increase for the day. This impressive climb follows a period of fluctuating performance, with Bitcoin experiencing declines in three of the previous four weeks, after hitting an all-time high of $108,315 in December.
The renewed optimism in the crypto market is largely attributed to Trump’s anticipated pro-crypto stance during his second term. “The market is now pricing in the Trump inauguration and Trump being actually optimistic on crypto,” explains Zaheer Ebtikar, founder of crypto fund Split Capital.
Bloomberg reports suggest that President Trump intends to issue an executive order prioritizing cryptocurrency within his administration’s policy agenda. This order is expected to foster a more collaborative dialogue with industry leaders, marking a significant shift from his previous skepticism towards digital currencies.
This week’s Bitcoin resurgence coincides with a broader rally in risk assets, spurred by easing concerns about US inflation. Lower-than-expected Producer Price Index (PPI) and Consumer Price Index (CPI) figures have reignited investor hopes for further interest rate cuts by the Federal Reserve. “The PPI and CPI misses lifted the lid on macro worries, which has allowed traders to focus back on upcoming crypto-specific catalysts,” notes Jake Ostrovskis, a trader at Wintermute, a crypto market-making firm.
Adding to the positive momentum, Ripple’s XRP token also reached a record high of $3.40 on Thursday, fueled by optimism surrounding a potential resolution in Ripple’s ongoing legal battle with the US Securities and Exchange Commission (SEC).
Despite the bullish sentiment, Ostrovskis cautions against potential market volatility leading up to Trump’s inauguration. “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,” he adds.
