Bitcoin continued to break records on Monday as the original cryptocurrency surged to a new all-time high of $107,822, fueled by the growing potential for a strategic national Bitcoin reserve.
The currency, which has consistently hit new highs over the past several weeks, rose 5% from $102,000 on Sunday night to surpass $107,000.
Brian Rudick, head of research at crypto market maker GSR, tells Fortune that the surge was triggered partly by President-elect Donald Trump’s reaffirmation of his support for a strategic Bitcoin reserve in an interview with CNBC late last week. In response to a question about whether he plans to establish a federal reserve for the currency, similar to that of oil reserves, Trump said, “Yes, I think so.”
“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,” he said.
Trump had promised to create a national Bitcoin reserve, an effort spearheaded by Wyoming Sen. Cynthia Lummis, while on the campaign trail as part of his effort to court the crypto vote. In July, Lummis introduced the Bitcoin Act, which would establish the reserve, saying that it “will serve as an additional store of value to bolster America’s balance sheet,” according to her website.
Rudick notes that Trump’s comments, along with a meeting between Lummis and Trump’s Treasury pick, Scott Bessent, are driving optimism among investors about Bitcoin’s future as a legitimate store of value.
While it is unclear if Lummis’s bill will pass anytime soon, Rudick says, Trump could sign an executive order to prohibit the government from selling off its current Bitcoin holdings—over 200,000 BTC seized from individuals who engaged in illicit activities—adding further legitimacy to the currency as a reserve asset.
“If it seems like the U.S. would go down this route … it could actually create this nation-state-level war for Bitcoin,” Rudick says, suggesting that an array of other countries could start adopting Bitcoin reserves and buying the currency in bulk. “At that point the sky is the limit in terms of where the price could go.”
Of course, countries that either buy or hold Bitcoin run the risk of the currency losing value. El Salvador, the first country to make Bitcoin legal tender, lost $60 million on its Bitcoin bet in 2022. Since then, the currency’s value has rebounded, and El Salvador’s holdings are now worth over $600 million.
Last month, Trump’s election victory sent Bitcoin on a tear, which has continued for weeks as investors anticipate the appointment of pro-crypto officials and changes to regulations that are supposed to support the crypto industry’s growth. The currency is up over 150% this year after Trump fully embraced the crypto industry over the summer.