Bitcoin’s price has climbed nearly 5% in 24 hours, reaching a new all-time high of $106,554 on December 15, amid rising speculation that it could become a U.S. reserve asset. The rally comes as investors anticipate a Federal Reserve interest rate cut and possible pro-Bitcoin moves from President-elect Donald Trump’s administration.
Bitcoin Enters “Santa Claus Mode”
CK Zheng, Chief Investment Officer at ZK Square, attributes Bitcoin’s surge to what he calls “Santa Claus mode,” driven by investor fear of missing out (FOMO) during the holiday season. Zheng predicts Bitcoin could hit $125,000 in early 2025 but warns of a possible 30% correction once bullish news from the Trump administration is fully “priced in.” Such a correction could push Bitcoin’s price down to $87,500.
Despite the possibility of a pullback, Bitcoin continues to benefit from growing institutional and retail interest. Its previous all-time high of $104,000, set on December 5, has now been surpassed, solidifying its bullish trajectory.
Trump Administration’s Potential Bitcoin Moves
One of the key drivers of Bitcoin’s price surge is speculation about its future role in U.S. monetary policy. Jack Mallers, CEO of Strike, suggested that President-elect Trump could issue an executive order on his first day in office to designate Bitcoin as a reserve asset.
While Mallers clarified that such a move wouldn’t involve purchasing millions of coins, he noted it would still be a “significant position.” This speculation has fueled excitement within the crypto community and added momentum to Bitcoin’s rally.
Bitcoin Reserve Bills Gaining Momentum
At the state level, efforts to adopt Bitcoin as a reserve asset are also gaining traction. Dennis Porter, CEO of the Satoshi Action Fund, revealed that a third state is preparing to introduce a Bitcoin reserve bill. While the state remains unnamed, Porter expects at least 10 states to propose similar bills, following in the footsteps of Pennsylvania and Texas.
“This isn’t going to stop. We’re going to see more and more of these bills come forward,” Porter said during a December 15 X Spaces discussion.
Federal Reserve and Accounting Rule Changes Could Drive Growth
Bitcoin’s rally is also supported by macroeconomic developments. Financial analysts predict the Federal Reserve will announce a 0.25% interest rate cut on December 18, which could further boost Bitcoin’s price in the coming months. Lower interest rates often drive investors toward alternative assets like Bitcoin as they seek higher returns.
Additionally, the Financial Accounting Standards Board (FASB) has introduced new crypto fair value accounting rules, allowing institutions to report the value of their crypto holdings more accurately. These rules, effective for fiscal years beginning after December 15, are expected to attract more institutional players to the crypto market.
According to the Crypto Fear and Greed Index, Bitcoin’s market sentiment currently sits at 83 out of 100, indicating “Extreme Greed.” This reflects strong bullish momentum, as both retail and institutional investors continue to pour capital into the leading cryptocurrency.
