WASHINGTON (AP) — The price of bitcoin soared to over $109,000 early Monday, just before President-elect Donald Trump’s inauguration, with the cryptocurrency industry speculating that he will take swift action upon returning to the White House. Formerly a skeptic who once likened bitcoin to a scam, Trump has now wholeheartedly embraced digital currencies. He has launched a new cryptocurrency venture and pledged during his campaign to transform the U.S. into the “crypto capital” of the world.
His promises include establishing a U.S. crypto reserve, implementing regulations friendly to the industry, and appointing a crypto “czar” within his administration. “You’re going to be very pleased with me,” Trump assured crypto enthusiasts at a bitcoin conference last summer.
Bitcoin, created in 2009 as an independent form of electronic cash, has become the most popular cryptocurrency worldwide. Despite facing criticism for its volatility and exploitation by criminals, scammers, and rogue nations, cryptocurrencies have transitioned from the fringes of finance to mainstream acceptance in sporadic bursts.
Despite the skepticism surrounding cryptocurrencies, they have endured multiple price fluctuations and garnered support from influential figures within the industry. Following Trump’s election victory, bitcoin’s value has surged, surpassing $100,000 last month before briefly dipping to around $90,000. On Friday, it experienced a 5% increase and saw a significant spike of over $9,000 early Monday, according to CoinDesk.
Trump’s selections for crucial cabinet and regulatory positions reflect his support for cryptocurrencies, with key figures backing the industry slated to lead the Treasury and Commerce departments and the Securities and Exchange Commission. Industry leaders held the inaugural “Crypto Ball” to celebrate the prospect of the first “crypto president,” which drew a sold-out crowd with tickets priced at several thousand dollars.
Trump’s proposed actions for the early days of his presidency include the establishment of a special advisory council to provide guidance on creating clear and straightforward regulations for the crypto industry within his first 100 days in office. Details about the council and its members remain unspecified, but Trump appointed tech executive and venture capitalist David Sacks as the administration’s crypto “czar.” Additionally, he announced that former congressional candidate Bo Hines would serve as the executive director of the “Presidential Council of Advisers for Digital Assets.”
Trump has assured the crypto community that new regulations will be crafted by individuals supportive of the industry. His selection to lead the SEC, Paul Atkins, has been a staunch advocate for cryptocurrencies. Industry participants have expressed relief following a perceived hostile approach by the outgoing Biden administration, which they claim stifled innovation through excessive enforcement actions and stringent accounting policies under Gary Gensler’s leadership.
Amidst heightened expectations surrounding the incoming Trump Administration, Peter Van Valkenburgh, Executive Director of Coin Center, believes that a significant shift in tone can be anticipated at the Securities and Exchange Commission (SEC). As Gary Gensler prepares to step down upon Trump’s inauguration, he expressed pride in the SEC’s efforts to regulate the cryptocurrency industry, citing the prevalence of “bad actors” within the space.
In a strategic move, President Trump vowed to bolster the U.S. government’s financial reserves by stockpiling Bitcoin, drawing parallels to the existing gold reserves. Speaking at a Bitcoin conference, Trump proposed that instead of auctioning off seized bitcoins from law enforcement actions, the government would retain them as a valuable asset. Advocates of cryptocurrency have circulated a draft executive order outlining the establishment of a “Strategic Bitcoin Reserve” as a permanent national asset to be managed by the Treasury Department. The order outlines plans for the Treasury Department to accumulate a minimum of $21 billion worth of Bitcoin over time.
Senator Cynthia Lummis of Wyoming has put forward legislation mandating the government’s accumulation of Bitcoin holdings, citing benefits such as diversification and risk mitigation. However, critics caution against the volatility of Bitcoin as a reserve asset. Zack Shapiro, Head of Policy at the Bitcoin Policy Institute, views the establishment of a Bitcoin reserve as a significant step towards mainstream acceptance and legitimacy.
At a Bitcoin conference earlier this year, President Trump garnered applause as he reiterated his commitment to commuting the life sentence of Ross Ulbricht, the mastermind behind the illicit online marketplace Silk Road. Ulbricht’s case has galvanized support from crypto enthusiasts and libertarian groups who believe that law enforcement exceeded its boundaries in prosecuting Silk Road.
The potential changes in SEC’s approach under the new administration, coupled with the government’s interest in stockpiling Bitcoin, signal a shifting landscape for cryptocurrency regulation and adoption in the United States. President Trump’s stance on retaining seized bitcoins and commuting Ulbricht’s sentence reflects a nuanced understanding of the complexities surrounding digital assets and their legal implications. As stakeholders navigate this evolving terrain, the future of cryptocurrency in the U.S. remains a topic of keen interest and speculation.
