Bitcoin Price Almost Hits $98,000: Key Reasons Behind The Rally

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As a seasoned researcher with over two decades of experience in the financial markets, I have witnessed countless bull runs and bear markets, but the current surge in Bitcoin is unlike anything I’ve ever seen before. The factors driving this rally are truly unprecedented, and it’s hard not to be captivated by the prospect of a “US Bitcoin Reserve Trade” and the potential appointment of a “crypto czar.

Bitcoin recently soared to a fresh record peak, hitting $97,852 on Binance. In the last day alone, it’s climbed by 5%, and over the past 16 days since November 5, it has experienced an impressive surge of 43%. This upward trend shows no signs of abating as the price of Bitcoin continues to climb steadily. A few major factors are fueling this exceptional rally:

#1 US Strategic Bitcoin Reserve Trade

After Donald Trump won the U.S. presidential election, there’s been a major change in market attitudes. The initial “Trump trade” has transformed into what is now known as the “US Bitcoin Reserve Trade,” which stems from speculation that President-elect Trump might create a Strategic Bitcoin Reserve (SBR). This comes after his promise made at the Bitcoin 2024 conference held in Nashville.

Experts such as David Bailey, CEO of BTC Inc and a political advisor for Donald Trump’s campaign, along with Dennis Porter, CEO of Satoshi Act Fund, have suggested that the SBR (Secure Blockchain Registry) could become a reality. They advocate for the immediate establishment of the SBR within the initial 100 days of Trump’s presidency by executive order. They caution that failing to act promptly may result in the U.S. losing ground in the international competition to amass Bitcoin.

On November 9th, Bailey stated, “At least one country has been amassing Bitcoin and now ranks among the top 5 holders. I’m looking forward to their announcement.” He underlined his confidence by sharing a meme, suggesting that his information comes from solid knowledge instead of guesswork. Subsequently, Mike Novogratz, CEO of Galaxy Digital, stated in a recent Bloomberg TV interview that “many countries are currently purchasing Bitcoin in large quantities.

The “US Bitcoin Reserve Trade” is anticipated to persist until President Trump’s inauguration on January 20. It remains uncertain whether Trump will keep his pledges, possibly transferring approximately 208,000 BTC seized by law enforcement into the reserve or even supporting Senator Cynthia Lummis’ Bitcoin Act, which proposes the acquisition of a million BTC over a five-year period.

#2 Potential Appointment Of A ‘Crypto Czar’

On Wednesday, a hint emerged that Trump’s transition team might be negotiating to establish a fresh White House post focusing exclusively on Bitcoin and cryptocurrency policy. Insiders involved in the transition process suggest that potential applicants are under consideration for this job opening.

Establishing this role would mark the first instance of a dedicated White House position focusing solely on Bitcoin and cryptocurrencies, emphasizing the potential impact the emerging sector could have within the new administration. The specifics regarding the importance and scope of this role are yet to be determined – it may be a senior-level White House post or a “crypto czar” responsible for overseeing policy and regulation across various government departments. Crypto enthusiasts are actively lobbying for direct access to President Trump, which could significantly impact the entire industry if successful.

#3 Launch Of Bitcoin ETF Options

As a crypto investor, I’ve witnessed firsthand the transformative effect of Bitcoin ETF options on the market. On its debut day, BlackRock’s iShares BTC Trust (IBIT) ETF options, launched on November 19, 2024, astonished everyone with a staggering $1.9 billion in notional exposure. James Seyffart, an expert from Bloomberg on ETFs, highlighted that this figure was reached through 354,000 contracts, with 289,000 being calls and 65,000 being puts, demonstrating a ratio of 4.4:1. These options were likely a significant factor in Bitcoin reaching new all-time highs on the same day.

Recently, Jeff Park, who leads Alpha Strategies at Bitwise Invest, emphasized the potentially transformative impact of Bitcoin Exchange Traded Fund (ETF) alternatives.

The SEC’s approval to list and trade Bitcoin ETF options brings us close to experiencing an unprecedented surge in volatility, a ‘volatility of volatilities,’ in financial terms. For the first time, Bitcoin’s value will be partially backed by ETF options. This significant step represents a groundbreaking development for the crypto market.

Park outlined how Bitcoin ETF options establish a controlled market environment, with the Options Clearing Corporation (OCC) safeguarding clearing members from potential risks posed by counterparties. This setup allows for the synthetic exposure to Bitcoin’s value to escalate rapidly. He highlighted that this could trigger a powerful chain reaction on Bitcoin’s price, given its distinctive volatility traits and the “volatility smile” phenomenon.

If there were one thing to read today re the game-changing nature of Bitcoin ETF options, read (and bookmark) this one for 2025 – it’s going to be wild.

— Jeff Park (@dgt10011) September 20, 2024

#4 Surge In Spot Market And Bitcoin ETFs

The recent surge in Bitcoin’s price can be attributed to increased trading in the immediate market, where large orders have pushed the value upward. Yesterday’s inflows into the Bitcoin ETF reached an impressive $773.4 million, with BlackRock contributing the largest share at $626.5 million, followed by Fidelity ($133.9 million), Bitwise ($9.2 million), and ARK Invest ($3.8 million). Over the past three days, these U.S. Bitcoin ETFs have collectively purchased approximately $1.856 billion worth of Bitcoin.

Good morning,

Yesterday’s Bitcoin ETF flows were positive for $773.4 million.

Blackrock did $626.5 million, Fidelity $133.9 million. (BTC the mini-ETF is still missing data)

Price slowly climbing higher from $92K up to $97k now.
Shitcoins are getting slaughtered.

source:…

— WhalePanda (@WhalePanda) November 21, 2024

The total net asset value of US Bitcoin spot ETFs has exceeded $100 billion. Twelve Bitcoin ETFs, including those from BlackRock and Fidelity, were issued in January and have reached this milestone in just ten months.

At press time, BTC traded at $96,920.

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2024-11-21 19:35