Live updates: Follow the latest on Donald Trump’s inauguration
Bitcoin, which on Monday soared to a record of more than $109,000 ahead of US president-elect Donald Trump's inauguration, is likely to go much higher, say analysts.
The world’s largest cryptocurrency rallied amid expectations that Mr Trump's policies will promote the adoption of digital assets. Bitcoin was trading at $106,014.33 at 4.42pm UAE time on Monday.
"Bitcoin’s recent breach of $109,000 on Monday is a historic milestone, and I firmly believe this is only the beginning," said Nigel Green, chief executive of wealth management company deVere Group.
"We forecast that it could surge to $150,000 by mid-2025, driven by a confluence of factors including a pro-crypto Trump administration, heightened institutional investment, growing retail enthusiasm, and favourable regulatory developments globally. The ongoing momentum suggests that Bitcoin is cementing its status as a dominant global asset class," he said.
Bitcoin had a stellar 2024, more than doubling from $44,000 to top $100,000 for the first time on the back of Mr Trump's White House win and the launch of Bitcoin sport exchange traded funds (ETFs) in January last year.
"Trump has vowed to make the US a crypto capital for the world, with policies that push for the establishment of a strategic Bitcoin stockpile," said Vijay Valecha, chief investment officer at Century Financial.
"Crypto is here to stay, with eight states in the US introducing bills proposing crypto reserves, along with at least 13 more states preparing for similar legislation. Additionally, supporting the rally, net inflows of $1.86 billion were reported by US Bitcoin spot ETFs last week, taking the total net flow to $2.42 in the new year."
In the short term, according to Fibonacci extension levels, prices could see the $132,000 level as the first target, with a further target at $149,778, close to the psychological $150,000 level mark, Mr Valecha said.
Crypto markets perform in line with risky assets, and Bitcoin has performed best during improving US liquidity conditions, said Manuel Villegas, digital assets analyst at Julius Baer. "Overall, crypto markets are positively positioned ahead of Trump’s inauguration, the outlook on policy changes is big, and volatility is unlikely to subside anytime soon.
"That said, ETF flows are moving ahead of the inauguration, anticipating a little bit of ‘hot sauce’ to further warm up markets," he added. Julius Baer's outlook for the first quarter "remains stable, contingent on sustained demand and constrained supplies, with swings exacerbated by the macroeconomic environment", Mr Villegas said.
Mr Green also cautioned that investors must remain strategic amid the boom in crypto prices, keeping a focus on diversification and a long-term perspective. “While the current rally is incredibly promising, it’s important to note that it won't be a straight line to $150,000," he said.
"Market corrections are inevitable as investors periodically lock in profits, but these pullbacks are not a sign of weakness. Instead, they represent opportunities for longer-term growth, as the underlying fundamentals – such as institutional adoption and geopolitical demand – remain robust.”
Mr Trump was once a crypto sceptic. In his first term, he derided Bitcoin and its peers as “not money”, “based on thin air” and something that “can facilitate unlawful behaviour, including drug trade and other illegal activity”. He also described it a scam after he left office in 2021. However, in the months before and after his election this time around, he said he was considering an executive order designating cryptocurrencies as a “national priority”.
"We're gonna 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," Mr Trump told CNBC in December. In response to a question on his plans to build a crypto reserve similar to oil reserves, he said: "Yeah, I think so."
The number of new meme coins and their value have jumped since Mr Trump’s election victory in November. Industry executives are hoping the incoming administration will adopt a friendlier approach to crypto assets. Along with his sons, Mr Trump has also endorsed World Liberty Financial, a crypto venture set up by his longtime business partners and others.
UAE currency: the story behind the money in your pockets
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Name: Abeer Al Shahi
Emirate: Sharjah – Khor Fakkan
Education: Master’s degree in special education, preparing for a PhD in philosophy.
Favourite activities: Bungee jumping
Favourite quote: “My people and I will not settle for anything less than first place” – Sheikh Mohammed bin Rashid.
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Will the pound fall to parity with the dollar?
The idea of pound parity now seems less far-fetched as the risk grows that Britain may split away from the European Union without a deal.
Rupert Harrison, a fund manager at BlackRock, sees the risk of it falling to trade level with the dollar on a no-deal Brexit. The view echoes Morgan Stanley’s recent forecast that the currency can plunge toward $1 (Dh3.67) on such an outcome. That isn’t the majority view yet – a Bloomberg survey this month estimated the pound will slide to $1.10 should the UK exit the bloc without an agreement.
New Prime Minister Boris Johnson has repeatedly said that Britain will leave the EU on the October 31 deadline with or without an agreement, fuelling concern the nation is headed for a disorderly departure and fanning pessimism toward the pound. Sterling has fallen more than 7 per cent in the past three months, the worst performance among major developed-market currencies.
“The pound is at a much lower level now but I still think a no-deal exit would lead to significant volatility and we could be testing parity on a really bad outcome,” said Mr Harrison, who manages more than $10 billion in assets at BlackRock. “We will see this game of chicken continue through August and that’s likely negative for sterling,” he said about the deadlocked Brexit talks.
The pound fell 0.8 per cent to $1.2033 on Friday, its weakest closing level since the 1980s, after a report on the second quarter showed the UK economy shrank for the first time in six years. The data means it is likely the Bank of England will cut interest rates, according to Mizuho Bank.
The BOE said in November that the currency could fall even below $1 in an analysis on possible worst-case Brexit scenarios. Options-based calculations showed around a 6.4 per cent chance of pound-dollar parity in the next one year, markedly higher than 0.2 per cent in early March when prospects of a no-deal outcome were seemingly off the table.
Bloomberg
'The Sky is Everywhere'
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Europe’s rearming plan
- Suspend strict budget rules to allow member countries to step up defence spending
- Create new "instrument" providing €150 billion of loans to member countries for defence investment
- Use the existing EU budget to direct more funds towards defence-related investment
- Engage the bloc's European Investment Bank to drop limits on lending to defence firms
- Create a savings and investments union to help companies access capital
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- infant formulas and follow-on milks, health and slimming products such as powdered or fortified meal and dish substitutes,
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The specs
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SPECS
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