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Bitcoin hits new record on hopes Trump will build national fund
Bitcoin has surged to a new record of more than $106,000 (£83,700) amid hopes that Donald Trump will create a US national fund for the currency.
The president-elect suggested he could create a “strategic reserve” of Bitcoin upon taking office again in January, akin to America’s existing strategic oil stockpile.
His comments late last week further boosted expectations that his administration will be strongly supportive of the cryptocurrency industry.
Bitcoin’s price leapt to $106,533 on Monday, taking gains to more than 190pc so far this year.
Speaking to the broadcaster CNBC, Mr Trump said: “We’re going to do something great with crypto because we don’t want China or anybody else – not just China, but others are embracing it – and we want to be the head.”
Asked if he plans to build a crypto reserve similar to oil reserves, the incoming president replied: “Yeah, I think so.”
Despite an American crackdown on cryptocurrencies in recent years, the US is already the biggest government owner of Bitcoin in the world – mostly due to seizures. It owns some 198,000 Bitcoin worth $20bn.
Other top government owners include China, the UK, Bhutan and El Salvador, according to data website BitcoinTreasuries.
Governments around the world held 2.2pc of Bitcoin’s total supply as of July, according to data provider CoinGecko.
Private companies such as Elon Musk’s Tesla also hold reserves.
Vladimir Putin, Russia’s president, has previously claimed Bitcoin could become a safe haven currency for countries that are worried about the US using its control of the dollar to mete out sanctions.
Mr Putin said: “Who can prohibit it? No one.”
This is because Bitcoin is not controlled by any central bank, instead using the distributed computing power of users who “mine” the currency online.
Computer code also limits the total amount of Bitcoin that can ever be in circulation, with trading of the currency using anonymous “wallets” making it difficult for authorities to know who is behind certain accounts.
Its limited circulation has led some, including Jerome Powell, the Federal Reserve chairman, to liken it to gold rather than a conventional currency.
Bitcoin is the world’s biggest and best known cryptocurrency. On Monday, others such as Ethereum also rose on the news of Trump’s comments.
Tony Sycamore, an analyst at IG, told Reuters: “We’re in blue-sky territory here.
“The next figure the market will be looking for is $110,000. The pull-back that a lot of people were waiting for just didn’t happen, because now we’ve got this news.”
Investors have also been cheered by the addition of MicroStrategy, a Bitcoin treasury company, to the Nasdaq 100 index, something that will lead to more tracker funds investing in the firm.
Trump – who once labelled crypto a scam – embraced digital assets during his campaign, promising to make the United States the “crypto capital of the planet”.
This month, he named former PayPal executive David Sacks as his White House tsar for artificial intelligence and cryptocurrencies.
Mr Sacks is a close friend of Trump adviser and mega-donor Mr Musk, who is taking a prominent role in the new administration and has referred to himself as “first buddy”.
Trump has also said he will nominate pro-crypto Washington lawyer Paul Atkins to head the Securities and Exchange Commission, which regulates US financial markets.
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