Factors Driving Bitcoin's Price Surge

1, Policy Support: The Trump Effect

Trump's potential re-election and his positive stance toward cryptocurrencies are seen as key catalysts for Bitcoin’s rise. At the 2024 Bitcoin Conference, Trump promised to designate Bitcoin as a strategic reserve asset for the US and to make the US the global cryptocurrency hub. His policies include:

• National Strategic Reserve Plan: Over the next five years, the US government will continue purchasing Bitcoin to build a strategic reserve, with a commitment not to sell.

• Regulatory Support: Enhancing the SEC’s approach to cryptocurrency regulation and supporting blockchain innovation.

• Institutional Backing: Plans to create a dedicated position within the White House to oversee cryptocurrency policy.

Trump's policies also encourage foreign capital to flow into the US Bitcoin market and support the development of innovative financial products. These measures have significantly boosted market confidence in Bitcoin, laying a solid foundation for its upward movement.

2, Monetary Policy: Interest Rate Cuts and Inflation

Global monetary easing policies have exacerbated inflation expectations, with Bitcoin's role as "digital gold" becoming more pronounced. In 2024, the Federal Reserve has repeatedly signalled rate cuts, further enhancing Bitcoin’s appeal to investors.

Compared to traditional safe-haven assets like gold, Bitcoin offers higher liquidity and stronger growth potential. As of 2024, research shows that institutional investors and high-net-worth individuals are increasingly adding Bitcoin to their portfolios, seeking to preserve and grow wealth in a high-inflation, low-interest-rate environment.

3, Institutional Push: ETFs and Options

The introduction of Bitcoin spot ETFs has been a milestone event in the crypto market, lowering the entry barriers for institutional investors. The launch of ETFs has brought in over $23 billion in net inflows.

Additionally, the rapid growth of Bitcoin options markets has provided investors with flexible risk-hedging tools, while also improving market depth and liquidity. Tiger now supports IBIT's options trading. This "capital layering effect" has provided strong support for Bitcoin’s price, especially as it surpassed $90,000.

The notable increase in institutional investment has further solidified Bitcoin's position:

• Goldman Sachs: As of September 2024, Goldman Sachs holds $710 million in Bitcoin assets through BlackRock’s Bitcoin fund.

• MicroStrategy's Increased Holdings: MicroStrategy raised $6.6 billion through convertible senior notes to purchase 78,000 additional Bitcoins. It now holds 1.67% of the global Bitcoin supply, worth $31 billion. This strategy has led to a 750% increase in the company’s stock price this year.