Bitcoin (BTCUSD) Prices Shatter Another Record, Rising Above $107000 With Growing Optimism Around Reports That President-elect Donald Trump May Be Considering Establishing a Bitcoin Strategic Reserve

The largest cryptocurrency by market cap broke the $107,000 price barrier Monday, after crossing $106,000 for first time in late trading Sunday.

Bitcoin (BTCUSD) prices hit another record high on Monday, rising above $107,000 amid optimism over reports that President-elect Donald Trump may be considering establishing a bitcoin strategic reserve.

The largest cryptocurrency by market cap broke the $107,000 price barrier Monday, after crossing $106,000 for the first time in late trading Sunday. Meanwhile, MicroStrategy (MSTR), which calls itself a bitcoin treasury company, announced another massive bitcoin purchase of $1.5 billion.

MicroStrategy shares were up more than 5% in recent trading Monday, and have gained over 527% year-to-date.

Bitcoin Prices, Nasdaq 100 Inclusion Prop MSTR Shares

MicroStrategy bought 15,350 bitcoins during the week ending December 15, at an average price of roughly $100,386 per bitcoin, the company reported. The purchase was financed by selling MicroStrategy shares.

The company now owns 439,000 bitcoins, worth approximately $47 billion at current prices. And its bet on bitcoin has had a major impact on its stock. MicroStrategy's market cap has grown from roughly $1.1 billion in August 2020 when it first adopted its bitcoin strategy to close to $100 billion now.

The exponential growth in MicroStrategy shares this year was largely fueled by rising bitcoin prices. Bitcoin rallied earlier this year on demand from the newly launched spot bitcoin exchange-traded funds (ETFs), the bitcoin halving and finally the re-election of Trump and hope of a more crypto-friendly administration.

But MicroStrategy shares may have more room to run. Its inclusion in the Nasdaq 100 index starting next week would imply many funds and ETFs—such as the Invesco QQQ Trust (QQQ)—purchasing the stock to align their portfolios to the index.

However, the next milestone of becoming a part of the S&P 500 index may prove to be difficult, according to Bloomberg analysts James Seyffart and Eric Balchunas. While companies need to have a market capitalization of at least $18 billion, the S&P has complete discretion about deciding which companies ultimately make the cut.

The biggest issue for MicroStrategy could be its lack of profitability. The company has not turned a profit in the past few quarters, the analysts noted.

That could change for MicroStrategy come January 2025. Current accounting rules do not allow companies like MicroStrategy to record bitcoin on their books at fair value. Instead they are forced to take an impairment loss if bitcoin prices fall while not taking any gains from rising bitcoin prices into account. Those impairments would drag down the company's profits. But new rules by Financial Accounting Standards Board (FASB) allow for capturing some of that upside from rising bitcoin prices.