Bitcoin has touched an unprecedented high, trading past $89,000 on Tuesday and pushing the overall cryptocurrency market above its previous peak during the pandemic, as quoted on Bloomberg. The value of the largest cryptocurrency surged 32% since the U.S. election on Nov. 5, with a new record of $89,599 on Tuesday.

President-elect Donald Trump’s supportive stance on cryptocurrency has energized traders’ bullish sentiments. Trump has pledged to introduce favorable crypto regulations and increase the U.S. involvement in digital assets. His proposed policies include creating a strategic Bitcoin reserve and promoting domestic mining, positioning the United States as a potential global leader in cryptocurrency.

This shift is a marked departure from the Securities & Exchange Commission's clampdown on the crypto industry under President Joe Biden. The new outlook has stimulated speculative buying across both major and minor cryptocurrencies, taking the total digital asset market valuation to approximately $3.1 trillion, according to CoinGecko, as quoted on Bloomberg.

Bitcoin has been described as being on a “beast mode,” according to Chris Weston, head of research at Pepperstone Group, as quoted on Bloomberg. He noted that traders now face a choice: join the rally or wait for a potential price pullback.

In the options market, investors are betting on Bitcoin to reach $100,000 by the year-end. Open interest in futures for Bitcoin and second-ranked Ethereum also hit record highs on Monday, indicating increased engagement by institutional investors.

MicroStrategy Inc. MSTR, a prominent corporate Bitcoin holder, recently acquired about 27,200 Bitcoin, investing roughly $2 billion between Oct. 31 and Nov. 10.

Increasing bets of interest rate cuts by the Fed in the coming days make cryptocurrency favorable. Plus, President Trump favors low rates. Both factors should boost risk-on trade sentiments and create bullish opportunities in digital currencies.

Bitcoin is often touted as a hedge against inflation and has a fixed supply. This move contrasts with traditional fiat currencies, which central banks can issue in unlimited quantities. Thus, in times of inflation, the value of fiat currencies tends to fall.

Meanwhile, some market watchers view Bitcoin as a store of value due to its limited supply, which can preserve wealth amid high inflation. Having said this, we would like to note that the crypto space is extremely volatile.