Bitcoin prices topped $100,000 for the first time on Thursday, continuing a post-election run buoyed by pro-crypto pledges from the incoming Trump administration.
On election day, bitcoin — one of the most popular decentralized digital assets available — was worth $69,374, according to cryptocurrency trading platform Coinbase. Within a month, it had increased by over 44 percent. Other cryptocurrencies such as Ethereum and XRP also rose during that time.
The cryptocurrency’s sudden price surge is a sign of investor optimism about the policies of President-elect Donald Trump and his handpicked leadership of several major regulatory agencies, some of whom have openly promised to deregulate the crypto industry.
“The fact that bitcoin hit the $100,000 mark reflects expectations of both political support and regulatory latitude under the incoming administration,” said Ram VasudevanAn economics professor at Colorado State University who has criticized crypto. “The nomination of crypto-enthusiasts for administrative positions is a clear signal of the embrace of Bitcoin and crypto, triggering a flood of money in this market.”
Bitcoin’s rally is also a product of its increased legitimacy. Trump’s election may have stirred its rally, but financial institutions’ embrace of wealth in recent months has provided tinder. While Bitcoin was once a niche curiosity, it is now a mainstream digital currency that everyday Americans can now purchase through reputable retail investment accounts. Even if Bitcoin eventually turns out to be a bubble, ie As many economists have argued Be that as it may, this investment vehicle has assured some staying power in it.
The policies of the incoming Trump administration are fueling optimism
Trump has been an ardent supporter of cryptocurrency throughout his recent presidential campaign, and his choices to lead key government agencies concerned with its regulation reflect that enthusiasm.
Bitcoin hit its highest valuation since its nomination Paul Atkins Wednesday serving as the head of the Securities and Exchange Commission (SEC). Regulation of tradable securities like stocks. Atkins previously served as SEC Commissioner for six years during the administration of former President George W. Bush.
Molly White, a cryptocurrency researcher and critic, told Vox that Atkins is “not necessarily the burn-it-all-down kind of nominee that Trump has decided on for other positions.” “He’s fairly established; He has an SEC background, but he’s been a very strong advocate for deregulation when he was at the SEC and certainly since.” Atkins is also its vice president Token Alliance of the Chamber of Digital CommerceAn industry lobbying group that advocates for looser regulation of cryptocurrencies.
Perennial BoringThe CEO of the Chamber of Digital Commerce is rumored to be one of Trump’s top picks for another key post: head of the Commodity Futures Trading Commission (CFTC), which sets rules around the trading of futures and commodities. Currently, cryptocurrencies are under the SEC, but the Trump administration alleged weight Instead of regulating it as a commodity. If that change is made, cryptocurrencies will fall under the purview of the CFTC, which often appears to be more lax in its regulatory approach.
Billionaire crypto enthusiast David Sachs, who Trump named on Thursday As its crypto and AI czarThe White House will be tasked with helping craft crypto and AI policy. In that role, Trump said in a post on Truth Social, Sachs will work closely with both the SEC and the CTFC. Create a legal framework to regulate crypto.
Trump himself is also associated with cryptocurrency through him The family’s cryptocurrency and trading venture World Liberty Financial. Pro-cryptocurrency group This year’s election cost $245 millionMore than any other industry, crypto is seen as friendly to supporting candidates across the country.
Perhaps all this means is that the regulatory landscape under the Trump administration will be much friendlier to crypto following heavy regulations and Multiple Lawsuits Against Crypto Companies During the tenure of current SEC Chairman Gary Gensler.
“The recent wave of investment in the crypto space is largely driven by the growing belief that years of regulatory uncertainty and legislation may finally give way to clarity,” said Christian Catalini, founder of the Crypto Economics Lab.
Gensler’s SEC crackdown Below are trading platforms like Coinbase, Binance, and KrakenArguing that buying and selling cryptocurrencies should be regulated like something like a stock or bond, and that investors should have access to the same kind of information about crypto companies as if they were buying a company’s stock. Crypto trading platforms and related companies argue that crypto tokens are not the same as stocks and therefore the same rules should not apply.
The SEC has filed lawsuits against several major crypto platforms, including Coinbase, which is ongoing. But they could be eliminated under the Trump administration, and regulation around bitcoin and other cryptocurrencies could change significantly under Trump.
Under Trump’s regulatory regime, cryptocurrency exchanges like Binance and Coinbase can operate with less threat of lawsuits, making it easier for people to trade on their platforms. Enthusiasts say this will spur innovation in the industry, but it could also mean that individual traders using such platforms are more exposed to fraud, theft and the volatile nature of the currency.
Bitcoin has become an established digital asset
Over the past five years, and especially after the collapse of crypto trading platform FTX in 2022, Narrative about the utility of cryptocurrencies What’s changed now is that it’s being sought more as an investment instrument rather than a currency that can be used like cash, White said. And that pivot is helping his valuation, too.
The SEC gave the green signal in January The first Bitcoin exchange-traded fund (or ETFs) in the United States. ETFs are baskets of financial instruments (such as stocks, bonds, commodities, or in this case, cryptocurrencies like Bitcoin or Ethereum) that are bought and sold on a regulated stock exchange.
ETFs offer indirect access to cryptocurrencies if one chooses to invest. Simply put, when the value of Bitcoin increases, so does the value of these ETFs — but due to the bundled nature of ETFs and their presence on a regulated exchange, investors are more protected from losses if Bitcoin’s value decreases. Firms including BlackRock, Invesco, Fidelity, Grayscale, and Ark Invest have created bitcoin funds, offering new investors, especially those who may be more risk-averse, an easy way to buy or gain exposure to the cryptocurrency.
Previously, investors had limited options for trading Bitcoin. They can go to a cryptocurrency exchange to buy bitcoin directly, but then have to figure out how to safely and conveniently store it long-term. (Cryptocurrency held on an exchange can be vulnerable to theft, Storing crypto offline is safe but difficult to trade.) they can invest Risky Bitcoin FuturesAgree to buy or sell the currency at a later date at a specified price. Now, ETFs offer an establishment-backed alternative.
“While no one can predict the exact tipping point or when the price will stabilize, the long-term driver of bitcoin’s rise is its evolution — not just as digital gold, but as a foundational layer of the global financial infrastructure,” Catalini said.
However, Vasudevan said there are still reasons to believe that crypto’s ascension will not last forever. Bitcoin has risen before, only to crash quickly. In November 2022, bitcoin’s value dropped 20 percent to below $16,000 within days of a stunning collapse on crypto exchange FTX. Concerns remain that crypto prices are based entirely on speculation rather than any underlying value.
“It has created another bubble, which is being stoked by the prospect of a more favorable regulatory environment and the possibility of it opening up to new products and funds that can attract more people to this market,” Vasudevan said.
