Bitcoin exceeds $100,000 amidst potential crypto regulation by Trump

bitcoin

The value of bitcoin surpassed $100,000 once more in the early hours of Friday, driven by the heightened expectations within the cryptocurrency industry of swift action from Donald Trump upon his ascension to the presidency the following week. Formerly a critic who once dismissed bitcoin as potentially fraudulent, Trump now embraces digital currencies wholeheartedly. He has launched a new cryptocurrency venture and pledged during his campaign to position the United States as the global hub for cryptocurrencies. Trump’s commitments entail establishing a U.S. cryptocurrency reserve, implementing favorable regulations, and appointing a crypto leader within his administration.

During a bitcoin conference last summer, Trump assured crypto-enthusiasts, “You’re going to be very happy with me.” Bitcoin, the most recognized cryptocurrency globally, emerged in 2009 as a form of digital cash liberated from the control of traditional banks and governments, gradually transitioning from the financial outskirts to the mainstream in an erratic manner. Despite criticisms citing the volatility of cryptocurrencies and their misuse by illicit entities, critics questioning their practicality as well as the prevalence of Ponzi schemes, the industry has persevered through various price slumps. In light of the perceived bias against the crypto sector by the previous administration, influential figures in the industry threw their support behind Trump during the preceding election. Subsequent to Trump’s victory, bitcoin skyrocketed in value, soaring beyond $100,000 for the first time recently before experiencing a slight decline to around $90,000 earlier this week. Just two years earlier, bitcoin was trading at approximately $20,000. CoinDesk reported on Friday that bitcoin had ascended by about 5% to roughly $104,000.

Trump’s selections for crucial cabinet and regulatory roles prominently feature proponents of cryptocurrencies, with appointees designated for leadership roles at the Treasury and Commerce Departments, as well as the Securities and Exchange Commission, demonstrating their favorability towards crypto. Notably, Trump’s significant supporters in the crypto world are organizing the inaugural “Crypto Ball” on Friday evening, an event publicized on its website to feature an esteemed musical lineup to honor the first “crypto president.” Tickets for the gala have been fully booked, with prices reaching several thousand dollars.

Regarding imminent actions under Trump’s administration, a specialized advisory council is anticipated to be established to offer guidance on formulating transparent and concise crypto regulations within the initial 100 days of his presidency. Although specifics about the council and its members remain uncertain, Trump has assigned tech entrepreneur and investor David Sacks as the crypto “czar.” Similarly, Bo Hines, the former congressional candidate of North Carolina, has been appointed as the executive director of the “Presidential Council of Advisers for Digital Assets.” During last year’s bitcoin conference, Trump promised that forthcoming regulations would be devised by individuals who uphold and appreciate the crypto industry, rather than harbor animosity towards it. Additionally, Paul Atkins, Trump’s nominee to lead the SEC, has displayed fervent support for cryptocurrencies.

In contrast to the purportedly antagonistic stance of the previous administration towards the crypto sector, Trump’s regulatory approach is viewed favorably by many industry insiders, particularly in anticipation of a tonal shift at the SEC following Gensler’s departure. Gensler, who is stepping down as Trump assumes office, voiced pride in his office’s efforts to monitor the crypto industry, which he characterized as rampant with malpractice. Furthermore, Trump vowed to ensure that the U.S. government accumulates bitcoin akin to its stockpiling of gold. At the bitcoin conference this past summer, Trump proclaimed that the government would retain the billions of dollars’ worth of bitcoin seized through law enforcement activities, as opposed to selling it off through auctions. Advocates for crypto have circulated a preliminary executive order online proposing the establishment of a “Strategic Bitcoin Reserve” as a “permanent national asset,” to be managed by the Treasury Department through its Exchange Stabilization Fund. The order suggests that the Treasury Department should eventually acquire a minimum of $21 billion in bitcoin. Senator Cynthia Lummis of Wyoming had previously introduced legislation mandating the government’s acquisition of bitcoin, with proponents asserting that such a move would diversify government assets and shield against financial vulnerabilities, despite critics noting bitcoin’s volatility poses a drawback. Building such a reserve would signify a significant stride towards rendering bitcoin widely acceptable and legitimate in the eyes of skeptics, remarked Zack Shapiro, a legal professional and head of policy at the Bitcoin Policy Institute.

Trump’s announcement that he would commute the life sentence of Ross Ulbricht, the convicted founder of Silk Road, drew raucous applause at the bitcoin conference earlier this year. Ulbricht’s case has galvanized some crypto proponents and Libertarian activists who believe that law enforcement overreached in constructing the case against Silk Road.