• Bitcoin has surpassed $94,000, driven by news of Trump's company potentially acquiring crypto trading firm Bakkt.
• The cryptocurrency market has seen a bullish run since the U.S. election, pushing its value above $3 trillion.
• Trading volumes have significantly increased, but investors are warned of potential losses due to market pullbacks.
• Dogecoin spiked by 20% after Elon Musk was appointed to lead a new department by President-elect Trump.

Bitcoin, the world's largest and most recognized cryptocurrency, has made history by breaching the $94,000 mark for the first time. This significant milestone, achieved on November 20, 2024, has been largely driven by the news that Donald Trump's social media company is in talks to acquire the crypto trading firm Bakkt. This development has sparked hopes of a more cryptocurrency-friendly regime under the incoming Trump administration.

The Financial Times reported the potential acquisition, citing two individuals with knowledge of the matter. Trump Media and Technology Group, which operates Truth Social, is reportedly close to finalizing an all-stock acquisition of Bakkt. The latter is backed by the NYSE-owner Intercontinental Exchange, further solidifying its standing in the financial world.

Market analyst Tony Sycamore from IG attributed Bitcoin's record-breaking rise to the Trump deal report and traders capitalizing on the first day of options trading on the Nasdaq over BlackRock's Bitcoin ETF.

Bitcoin's Bullish Run and Market Reaction

The cryptocurrency market has been on a bullish run since the U.S. election on November 5, with traders betting on President-elect Trump's promised support for digital assets. This support is expected to lead to a less restrictive regulatory regime, breathing new life into Bitcoin after a few stagnant months. This growing excitement has pushed the global cryptocurrency market's value above $3 trillion, a record high according to analytics and data aggregator CoinGecko.

Chris Weston, head of research at Australian online broker Pepperstone, noted a real underlying buying pressure for Bitcoin. He suggested that another surge in value could trigger a fresh chase from those who prefer to invest in strong assets.

Investors are also optimistic that Trump's support of cryptocurrencies, coupled with backing from a crypto-friendly Congress, will lead to policies beneficial for the asset class. This optimism is reflected in the performance of TMTG shares, which, despite a 7% drop in afternoon trading on Tuesday, had closed up 16.7% on Monday.

Trading Volumes and Market Caution

The cryptocurrency market has also seen a significant increase in trading volumes. On Binance, the world's largest crypto exchange, the average daily trading volume of Bitcoin jumped to about $493 million in the week following the election, nearly double the year's average. Meanwhile, U.S.-listed exchange-traded funds tracking the spot price of Bitcoin, favored by institutional investors, recorded their biggest daily net inflows on record of $1.43 billion on November 7.

However, market players have cautioned that investors could face losses due to profit-taking and market pullbacks in the coming weeks. Despite the initial excitement, the specifics of what will change under the new administration remain unclear.

In a related development, Dogecoin, Elon Musk 's favorite cryptocurrency, spiked by as much as 20% after the Tesla mogul was appointed by President-elect Donald Trump to lead a newly created "Department of Government Efficiency" - or DOGE. This appointment is expected to pave the way for the Trump administration to dismantle government bureaucracy, slash excess regulation, cut wasteful expenditures, and restructure federal agencies.