Bitcoin surged to a new record high of $93,000 on Wednesday, only to pull back shortly after. The sharp rise following Donald Trump’s election victory has been attributed to both optimism surrounding his administration and profit-taking after the cryptocurrency’s rapid rally.
According to Coinbase, the largest cryptocurrency exchange in the U.S., Bitcoin was trading at $88,104 per coin at 4:23 PM Eastern Time (1:23 PM Pacific Time), marking a slight dip of 0.06% from the previous day’s price.
The cryptocurrency, which had first crossed the $90,000 threshold the day before, maintained its momentum on Wednesday morning, surpassing both $91,000 and $93,000.
The surge in Bitcoin’s price is largely tied to expectations of relaxed cryptocurrency regulations under Trump’s incoming administration, especially after Tesla CEO Elon Musk’s nomination to head the new Department of Government Efficiency. Investors are hopeful that Musk’s leadership could lead to more favorable regulatory conditions for digital assets.
However, after peaking at $93,200, Bitcoin reversed course, falling back below the $90,000 mark. Analysts suggest that the pullback was a result of profit-taking after the sharp price increase.
On Election Day, November 5, Bitcoin was trading below $70,000, but following Trump’s victory, the price soared 35% to hit its peak on November 13. In addition, new consumer price index (CPI) data showed a 2.6% year-over-year increase, halting a seven-month slowdown in inflation. This news added to market uncertainty and contributed to the pullback in Bitcoin’s price.
Meanwhile, some analysts are predicting that Bitcoin’s price could rise as high as $500,000 if it were adopted as a strategic reserve asset under a second Trump administration. Michael Novogratz, founder of the cryptocurrency investment firm Galaxy Digital, suggested, “While the likelihood is low, if Bitcoin becomes a strategic reserve asset, its price could reach $500,000.” He added, “All other countries would have to adopt Bitcoin as well.”
A reserve asset refers to assets held by central banks for international payments, typically including reserve currencies like the U.S. dollar, Special Drawing Rights (SDR) from the International Monetary Fund (IMF), or gold.