Bitcoin tops US$100,000 level as angst over Fed policy path eases

BITCOIN notched its biggest gain of the new year as reassuring US inflation figures revived bets on further interest-rate cuts by the Federal Reserve, lifting global markets.

The digital asset changed hands at US$100,420 as at 8.08 am on Thursday (Jan 16) in Singapore after a more than 3 per cent jump in the prior session following the Bureau of Labor Statistics figures. Tokens such as Ether and XRP posted sharper rallies.

The report pointing to cooling core consumer prices reignited bets on another Fed rate reduction by July, boosting stocks and bonds. The spotlight now turns to the policy blitz expected in the wake of president-elect Donald Trump’s inauguration on Jan 20, potentially including steps to bolster the crypto sector.

Speculators are weighing up the risk of inflationary tariff and immigration policies against Trump’s vow to make the US the global home of digital assets. The Republican has also backed the idea of creating a national Bitcoin stockpile.

One key question is whether the 50 per cent advance in Bitcoin sparked by Trump’s election victory on Nov 5 – the token hit a record US$108,316 last month – will give way to “sell-the-news” profit-taking when he actually assumes power.

“Our understanding is that Trump has a large number of executive orders ready to go soon after inauguration next week, some of which are specifically positive for digital assets,” said Cosmo Jiang, portfolio manager at Pantera Capital. “In the short term, we could see some sell-the-news, but those who do are missing the forest for the trees.” BLOOMBERG