(Bloomberg) — Bitcoin briefly spiked above $93,000 as expectations of further interest rate cuts from the Federal Reserve added to the momentum of newly elected President Donald Trump’s pro-crypto stance.
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The digital asset rose nearly 6% in the US to a record $93,462, but failed to maintain its gains, falling to $89,974 at 10:28 a.m. in Singapore on Thursday. The broader crypto market fluctuated between gains and losses amid choppy trading.
Speculators are trying to parse whether Trump’s rhetorical support for digital assets will continue to propel Bitcoin, opening a path to $100,000, or give way to an onslaught of profit-taking after advancing 33% since the US election on November 5.
“After such an extensive move, it’s reasonable to think we’ll see opinions shift, resulting in more two-way flows,” Chris Weston, head of research at Pepperstone Group, wrote in a note. “Still, the trend in Bitcoin is higher – for now – and I would expect buyers to come back into action once the liquidation of a concentrated position runs its course and we move into a cleaner position.”
U.S. inflation data on Wednesday matched analyst expectations, prompting traders to increase their bets on another quarter-point rate cut by the Fed in December. At the same time, Trump’s broader platform of tax cuts and protectionist trade tariffs complicates the picture by threatening to fuel price pressures in the future.
The president-elect has promised to create a friendly regulatory framework for crypto, establish a strategic Bitcoin stockpile and make the US the global hub for the industry. Once a crypto skeptic, Trump changed course after digital asset companies spent heavily to further their interests during their election campaigns.
Questions remain about the feasibility of these promises and the possible timeline for implementation. Trump and his Republican Party have joint control of the elected branches of government, but state matters such as economic and fiscal policy may be the first in line for action.
Billionaire Michael Novogratz, founder of crypto-focused Galaxy Digital LP, said on Bloomberg Television that the chances of a strategic reserve for US Bitcoin are low, while adding that the largest token could rise to $500,000 if it becomes a reality.
