Bitcoin in 'Santa Claus mode': optimism grows for reserve status in US

Bitcoin in 'Santa Claus mode': optimism grows for reserve status in US

Bitcoin is experiencing a meteoric rise, and many analysts agree that it is in what is known as "Santa Claus mode." The term describes a period when investors are expecting growth and are looking to allocate more capital to cryptocurrencies, which may be driven by fears of potential losses.

The price of Bitcoin rose by almost 5% on December 15, reaching a new all-time high of over $106,000. Although the price has corrected slightly and is currently hovering around $104,667, investors continue to express optimism about the future of the cryptocurrency. CK Zheng, chief investment officer at ZK Square, predicts that Bitcoin's price could rise to $125,000 by early 2025, although he warns of the possibility of a 30% correction that could pull the price back to around $87,500.

This optimism comes at a time when the US Federal Reserve is expected to continue cutting interest rates in December. Strike's founder and CEO, Jack Mallers, has suggested that President-elect Donald Trump could sign an executive order on his first day in office declaring Bitcoin a reserve asset. "There is an opportunity to use the order to buy bitcoin," Mallers said, adding that it could represent a significant position, though not in the million-coin range.

A third Bitcoin reserve law is also in the works at the state level, with Dennis Porter, CEO of the Satoshi Action Fund, expecting other states to join Texas and Pennsylvania. He said he expects at least 10 states to pass similar laws.

Financial analysts predict that a 0.25% interest rate cut by the Federal Reserve on December 18 could further support the Bitcoin price. Another potential boost could come from a new Financial Accounting Standards Board rule that will allow institutions to better record the value of their cryptoassets.

Currently, Bitcoin market sentiment is in the "extreme greed" zone, as shown by the Fear and Greed Index, which scored 83 out of 100. Since December 5, when Bitcoin first broke the $100,000 mark, investor attention has increasingly focused on the cryptocurrency.

With the growing interest and optimism around Bitcoin, it is clear that the cryptocurrency is becoming an increasingly important part of investment portfolios. As we approach the end of the year, it will be interesting to see how the situation develops and whether Bitcoin actually reaches the predicted heights.

*This is not investment advice.

Coingarage team