Bitcoin witnessed a remarkable surge to a record high above $106,000 on Monday. This remarkable feat was triggered by President-elect Donald Trump's suggestion of creating a US bitcoin strategic reserve similar to the strategic oil reserve. Such an announcement ignited the enthusiasm of crypto bulls and sent Bitcoin prices soaring.

Unprecedented Bitcoin Rally Driven by Trump's Crypto Move

Bitcoin's Initial Surge and Market Reaction

Bitcoin, the world's largest and most renowned cryptocurrency, hit a high of $106,533. It last traded with a 3.1 per cent increase at $104,493. Smaller crypto ether also showed positive movement, rising 1.2pc to $3,952. Tony Sycamore, an analyst at IG, remarked, "We're in blue sky territory here. The next figure the market will be eyeing is $110,000. The pullback that many were anticipating simply didn't materialize as we now have this significant news."This surge in Bitcoin's value was not only due to Trump's remarks but also received a boost from MicroStrategy's inclusion in the tech-heavy Nasdaq 100 index. This is likely to lead to more inflows for the software firm that has turned into a bitcoin buyer.

Investor Sentiment and the Crypto Boom

Bitcoin and crypto have come into the spotlight as investors bet that the incoming Trump administration will create a more favorable regulatory environment. This has boosted sentiment around the alternative currency, with Bitcoin being up a remarkable 192pc for the year. Trump himself expressed his intention to do something great with crypto, stating, "We don't want China or anybody else — not just China but others are embracing it — and we want to be at the forefront."When asked about creating a crypto reserve similar to oil reserves, Trump responded affirmatively. Data provider CoinGecko shows that governments around the world hold 2.2pc of Bitcoin's total supply, with the United States possessing nearly 200,000 bitcoins valued at more than $20 billion at current levels. Other countries like China, the UK, Bhutan, and El Salvador also have significant amounts of bitcoins.There are skeptics, however. Federal Reserve Chair Jerome Powell compared Bitcoin to gold earlier this month. Analysts also point out that implementing such a move will take time. Chris Weston, head of research at Pepperstone, said, "I think we still need to be cautious about a BTC strategic reserve and at least consider that this is not likely to happen anytime soon. Of course, any comment from Trump that offers more hope for the evolution of a strategic reserve is a positive factor, but it would come with consequences that need to be carefully considered and communicated to market players."

The Crypto Boost and Trump's Crypto Embrace

Since the November 5 election that saw Trump elected along with many other pro-crypto candidates, Bitcoin has surged more than 50pc. The total value of the cryptocurrency market has almost doubled this year, reaching a record over $3.8 trillion according to CoinGecko.During his campaign, Trump, who once labeled crypto a scam, embraced digital assets and promised to make the United States the "crypto capital of the planet." This month, he named a White House czar for artificial intelligence and cryptocurrencies, former PayPal executive David Sacks, a close friend of Trump adviser and megadonor Elon Musk. He also said he would nominate pro-crypto Washington attorney Paul Atkins to head the Securities and Exchange Commission.On Friday, exchange operator Nasdaq announced that MicroStrategy will be added to the Nasdaq-100 Index, with the change taking effect before the market opens on December 23. MicroStrategy, an aggressive investor in the world's largest crypto asset, has seen its shares soar more than six-fold this year, taking its market value to almost $94bn. It is now the largest corporate holder of the cryptocurrency.Pepperstone's Weston believes the market is "front running the idea that Michael Saylor (MicroStrategy CEO) will capitalize on the likely rally in the MicroStrategy share price, given the impending passive flows from its inclusion into the NAS100 — where he'll presumably sell shares and purchase more bitcoin."