(Jan 14): Bitcoin reached a two-month high, continuing a cautious climb higher in January as geopolitical uncertainty enhances its appeal.
The original digital asset rose as much as 2.4% to US$96,348 early Wednesday (Jan 14) in Singapore, its highest intraday level since Nov 16. Ether, the second-largest token, surged as much as 5.1%.
Bitcoin slumped to a loss of more than 6% for 2025 after ending the year in muted fashion, trading in a narrow range and proving largely indifferent to rallies in stocks and precious metals. But the token has flashed signs of a potential breakout throughout January and traders now see it potentially gaining ground on rival asset classes.
“Medium term, I think we could see investors allocate more to bitcoin on a gold-catch-up narrative — and other risk-on assets are having a great time,” said Justin d’Anethan, head of research at Arctic Digital.
He pointed to a Tuesday report showing that underlying US inflation rose less than expected as a tailwind for the token, as well as tensions surrounding the US Federal Reserve, which was served with grand jury subpoenas from the Justice Department earlier this week. The Fed episode highlights “the value of safe-haven and hard assets” over the US dollar, d’Anethan said.
See also: MSCI shelves crypto-exclusion plan but signals wider review
Another factor is “a sharp short squeeze” in bitcoin derivatives markets, said Vincent Liu, chief investment officer at Kronos Research. Some US$270 million of bitcoin short positions have been liquidated in the past 24 hours, according to CoinGlass data. Across all cryptocurrencies, about US$600 million of short positions were wiped out.
Broadly, traders view the current macro backdrop as positive for bitcoin, said Joshua Lim, global co-head of markets at FalconX.
Venezuela tensions, unrest in Iran, the Fed independence debate and MSCI’s decision to shelve a plan to eject crypto-heavy firms like Strategy Inc from major indexes amount to a “steady drumbeat of positive macro developments” for bitcoin, he said.
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