What is fueling Bitcoin’s remarkable surge to $108,000? From Trump’s remarks to ETF developments and MicroStrategy’s significant purchases, is a substantial institutional supply crunch imminent?

Bitcoin reaches unprecedented heights

Bitcoin (BTC) has once again captured the spotlight. On December 17, BTC surged to an all-time high of $108,260, increasing its gains since the U.S. elections to over 50%. As of December 17, it is trading at approximately $106,663.

The surge in BTC comes after President-elect Donald Trump proposed the establishment of a U.S. Bitcoin strategic reserve, a notion that has generated considerable excitement in the market.

Trump’s announcement, delivered during his speech at the New York Stock Exchange on December 12, seeks to place the U.S. ahead of global rivals in the digital asset landscape. He emphasized America’s need to “do something great with crypto” and to create reserves akin to its existing strategic oil stockpile.

The concept of a Bitcoin reserve is not entirely new. It was initially introduced through the BITCOIN Act, advocated by Republican Senator Cynthia Lummis, which proposes the U.S. accumulating 1 million BTC over the next five years to help manage the escalating $35 trillion national debt.

Institutional involvement is another critical element driving this rally, especially from MicroStrategy, a company renowned for its aggressive Bitcoin acquisitions.

Recently, MicroStrategy revealed it had acquired $1.5 billion worth of BTC at an average price of $100,386 per coin. This latest purchase brings its total Bitcoin holdings to 439,000 BTC, valued at approximately $47 billion.

The firm’s approach to Bitcoin has proven to be hugely beneficial, elevating its market capitalization from $1.1 billion in 2020 to nearly $100 billion today.

Additionally, MicroStrategy’s upcoming inclusion in the Nasdaq 100 index, set to take effect next week, is likely to further enhance demand for its stock as funds and ETFs adjust their portfolios.

Meanwhile, Ethereum (ETH) is also making headlines in this crypto frenzy. After a phase of stagnation, ETH has shown robust recovery signs, reaching a seven-day high of $4,106 on December 16, marking a 6% increase for the week.

Although Ethereum has experienced some minor pullbacks due to profit-taking, it remains stable around the $3,950 mark at the time of writing.

Let’s explore the crucial developments driving Bitcoin and Ethereum, analyze the macroeconomic factors influencing this bullish trend, and see what experts predict for the near future.

Institutional dynamics at play

Bitcoin and Ethereum both exhibit significant momentum, but the underlying narrative becomes more apparent when examining ETF inflows, liquidations, and the open interest in futures markets.

Spot Bitcoin ETFs have seen remarkable growth this month. Since the beginning of December, they have recorded consistent inflows every day, accumulating over $5.16 billion by December 16.

These inflows have raised the total assets under management for Bitcoin ETFs to $123 billion — a strong indication of confidence, particularly from institutional investors.

Conversely, Ethereum ETFs present a contrasting narrative. From their launch on July 23 until December 3, inflows were lackluster, totaling just $733.6 million. When compared to Bitcoin’s performance, this amount appears minuscule. However, the momentum has clearly shifted.

Since December 4, Ethereum ETFs have experienced consistent…