Bitcoin’s recent rise above $100,000 highlights its responsiveness to macroeconomic trends and institutional investor sentiment. The news of a U.S.-UK trade deal eased investor worries, creating a risk-on mood that sent Bitcoin to an intraday high of $101,370. Optimism was also reflected in mainstream markets, with global equities hitting six-week highs.
Institutional demand has been a major driver, with $5.3 billion of inflows into spot Bitcoin ETFs in the last three weeks alone. Particularly, investment company Strategy revealed intentions to spend $84 billion on Bitcoin purchases, indicating strong faith in the long-term worth of the cryptocurrency. Such large institutional commitments not only serve as price support but also add to the legitimacy of Bitcoin as a mainstream asset class.
Government Policies and Strategic Reserves
Government activities have also continued to shape Bitcoin’s path. New Hampshire is creating a cryptocurrency reserve that enables the treasurer of the state to invest up to 5% of government funds in cryptocurrencies, such as Bitcoin. The action is one of an emerging trend among states to include cryptocurrencies in their monetary policies.
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At the national level, President Trump’s executive order to establish a Strategic Bitcoin Reserve places the U.S. as a major Bitcoin holder, with an estimated 200,000 BTC. This policy change not only reflects the government’s acknowledgment of Bitcoin’s strategic importance but also establishes a precedent for other countries to explore similar reserves, which could propel worldwide demand.
Analysts estimate that all these factors combined may drive the price of Bitcoin to $120,000 shortly, with some estimates calling for a potential jump to $250,000 by 2025. Nevertheless, it’s important to point out that although the long-term view is bullish, short-term volatility might continue because of market forces and macroeconomic unpredictability.
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