WASHINGTON (AP) — Bitcoin surged above $100,000 once again early Friday amidst heightened anticipation within the cryptocurrency industry of swift action from incoming President Donald Trump. Formerly doubtful of bitcoin and dubbing it a potential scam, Trump has now embraced digital currencies fervently. He has initiated a new cryptocurrency venture and pledged during his campaign to transform the U.S. into the global “crypto capital.”
His proposed initiatives encompass establishing a U.S. crypto reserve, implementing regulation favorable to the industry, and appointing a crypto “czar.” Addressing crypto-enthusiasts at a bitcoin conference, Trump assured them of positive developments under his administration. Bitcoin, the leading cryptocurrency created in 2009 as decentralized electronic cash, has gained mainstream acceptance amid fluctuations.
Despite concerns about crypto volatility and illicit usage, the industry has persisted and thrived. Wealthy figures in the crypto sector, who felt marginalized under the Biden administration, supported Trump in the recent election. Following Trump’s win, bitcoin’s value surged, reaching $100,000 last month and briefly correcting to around $90,000 this week. Two years ago, bitcoin traded at roughly $20,000.
On Friday, bitcoin climbed by approximately 5% to about $104,000 according to CoinDesk. Trump’s appointees for influential roles exhibit support for cryptocurrencies, reflecting his administration’s stance. The crypto industry is hosting its inaugural “Crypto Ball” featuring top musical performers to commemorate Trump as the “crypto president.” The event is sold out, with tickets priced at thousands of dollars.
Trump’s early actions may include the establishment of a specialized advisory council to develop clear regulations for crypto within his first 100 days. Details of the council remain undisclosed, but Trump has named tech executive David Sacks as the administration’s crypto “czar” and appointed Bo Hines as the executive director of the “Presidential Council of Advisers for Digital Assets.” Trump has assured industry stakeholders that regulations will be crafted by supporters rather than detractors, with his SEC pick, Paul Atkins, known for advocating cryptocurrencies.
The crypto sector is optimistic about a more favorable regulatory environment under Trump’s administration, contrasting with their perceived hostility from the previous Biden administration.
Outgoing SEC Chairman Gary Gensler is set to depart as the Trump Administration takes office. In a recent interview with Bloomberg, Gensler expressed pride in the actions taken by his office to regulate the crypto industry, which he described as being “rife with bad actors.” Peter Van Valkenburgh, the executive director of the advocacy group Coin Center, noted that a tone change at the SEC could be expected under the new administration.
President Trump has made promises regarding the U.S. government’s approach to Bitcoin. He pledged to establish a Strategic Bitcoin Reserve, akin to the existing gold stockpile, to hold the billions of dollars in Bitcoin seized through law enforcement actions. A draft executive order circulating online proposes the creation of a “Strategic Bitcoin Reserve” as a “permanent national asset” under the oversight of the Treasury Department’s Exchange Stabilization Fund. The draft order outlines a goal for the Treasury Department to accumulate at least $21 billion worth of Bitcoin.
Senator Cynthia Lummis of Wyoming previously introduced legislation that would mandate the U.S. government to stockpile Bitcoin. Proponents of this initiative argue that diversifying government holdings into Bitcoin could serve as a hedge against financial risks. However, critics raise concerns about Bitcoin’s volatility, questioning its suitability as a reserve asset.
Zack Shapiro, head of policy at the Bitcoin Policy Institute, believes that establishing a Bitcoin stockpile would play a crucial role in normalizing and legitimizing Bitcoin in the eyes of skeptics. At a Bitcoin conference earlier this year, President Trump received applause for reaffirming his commitment to commuting the life sentence of Ross Ulbricht, the convicted founder of Silk Road, a website known for facilitating illegal drug sales and using cryptocurrencies for transactions.
Ulbricht’s case has generated support from crypto advocates and Libertarian activists who argue that government investigators may have overstepped boundaries in prosecuting Silk Road.
