Bitcoin Hits Another All-Time High on Trump's Election Win. Is There More to Come?

Ever since Donald Trump won the presidential election on Nov. 5, Bitcoin (CRYPTO: BTC) has been absolutely en fuego. The world's most popular cryptocurrency is now up 40% over the past two weeks, and seems to be hitting a new all-time high not just every day, but every hour. It's now trading around $98,000, just a stone's throw away from the psychologically important price level of $100,000.

So just how much higher can Bitcoin go? A lot higher than you might think. The pro-crypto optimism surrounding the Trump presidency is gaining momentum, and investors are likely to ratchet up their price forecasts for Bitcoin as we head into 2025. Let's take a closer look.

Trump's pro-crypto plans

The so-called "Trump trade" is essentially a bet that many of the pro-crypto promises made by Trump on the campaign trail will actually materialize once he becomes president. These include the creation of a pro-crypto regulatory environment for the U.S. (including the dismissal of current SEC head Gary Gensler), new support for the Bitcoin mining industry, and the creation of a strategic Bitcoin reserve.

While all of these moves can help to push the price of Bitcoin higher, the one that particularly stands out is the creation of a strategic Bitcoin reserve. As currently envisioned by U.S. Sen. Cynthia Lummis (R-Wyo.), it would commit the U.S. to buying 1 million Bitcoins over the next five years, or approximately 200,000 Bitcoins per year.

Another variant -- proposed by Robert F. Kennedy Jr. earlier this year -- calls for the U.S. government to buy 550 Bitcoins every single day until it amasses 20% of the total circulating supply of Bitcoin.

Image source: Getty Images.

All of that buying pressure, of course, is going to send Bitcoin higher. And that's especially the case if other nations also begin to view Bitcoin as a national strategic priority. What if, for example, China or Russia starts buying Bitcoin? What if the sovereign wealth funds of the Middle East begin buying Bitcoin? It might lead to a Bitcoin "arms race" of global proportions.

Bitcoin ETF inflows

And don't forget about the spot Bitcoin ETFs. Throughout the year, these have been a primary reason for Bitcoin's soaring gains. As soon as they officially launched in January, money began flowing into them. The largest of these new spot Bitcoin ETFs, the iShares Bitcoin Trust (NASDAQ: IBIT), has now accumulated over $40 billion in assets under management. By way of comparison, that's now more than the iShares Gold Trust, which has been around for nearly 20 years.

We could just be getting started here. After all, the biggest buyers of the spot Bitcoin ETFs have thus far been hedge funds and big Wall Street firms. Next up will be the risk-averse institutional investors -- such as pension funds and endowments -- that previously viewed crypto as too risky. Right now, they might only be willing to allocate 1% of their total portfolios to Bitcoin. But over time, that percentage could steadily move higher.

So that's another major source of potential new buying pressure as we head into 2025. Higher Bitcoin prices lead to more hype about Bitcoin, which brings in more investors, which sends the price of Bitcoin higher, which leads to more hype... Well, you get the idea. It's a massive positive feedback loop. As long as the price of Bitcoin keeps pushing higher, nobody is going to ask any questions.

Get ready to buy the dip

But maybe people should ask some questions. After all, as soon as Bitcoin smashes through the $100,000 level, there could be a steep pullback. Almost certainly, there will be some profit-taking.

So are the crypto bulls being too optimistic about Bitcoin right now? At the very least, there should be questions asked about the Trump administration's economic plans. Will the planned introduction of tariffs on U.S. goods -- and the risk of higher prices -- be good or bad for Bitcoin? Can Trump's team actually pull off the creation of a strategic Bitcoin reserve?

The good news is that a decline in the price of Bitcoin could actually turn out to be a positive if you've missed out on Bitcoin's extraordinary 130% gains year to date. That's because it could give you one last chance to buy the dip.

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Dominic Basulto has positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy.