Since Donald Trump became president-elect a little more than a month ago, nearly $10 billion has been invested in US Bitcoin ETFs, indicating optimism for potential pro-cryptocurrency regulations under his administration.
Investment giants like BlackRock and Fidelity are among over a dozen companies that have contributed to this significant inflow, raising their total assets to around $113 billion.
Trump's appointments, like a digital asset advocate leading the SEC, show a shift toward crypto-friendliness. Support for a national Bitcoin reserve is gaining bipartisan traction in Congress, led by Senator Cynthia Lummis.
Bitcoin recently hit a milestone by surpassing $100,000. However, market analysts are cautious about the volatility and the need for sustained positive catalysts to maintain this level.
Companies like MicroStrategy, which uses convertible bonds to purchase Bitcoin, are experiencing substantial growth, with MicroStrategy's stock rising 73% since Trump’s election. Similar growth is noted for other companies such as MARA Holdings and Core Scientific.
The trend reflects Bitcoin's nearly 40% growth during this period. The cryptocurrency's market cap is closing in on $2 trillion, boosting the valuation of MicroStrategy’s holdings.
Convertible bonds, prominent in recent crypto-related transactions, are structured with zero coupons, fostering convertible arbitrage. Despite the high demand for these financial instruments, fears of Bitcoin price drops seem insignificant.
Raj Imteaz from ICR Capital LLC highlights the pressure on companies in the competitive crypto market to issue converts to remain effective against peers with large financial reservoirs secured at favorable rates.
