Bitcoin has once again surged past the $100,000 mark, a significant milestone that reflects the buoyant expectations within the cryptocurrency sector. This optimism is fueled by anticipation of early moves from Donald Trump following his inauguration as president next week.
In a notable shift from his previous skepticism—where he once described Bitcoin as potentially resembling a scam—Trump has embraced the digital currency landscape with vigor. He has launched a new cryptocurrency initiative and made ambitious promises during his campaign to position the United States as the “crypto capital” of the world.
Among his proposals are the establishment of a U.S. cryptocurrency reserve, the introduction of regulations favorable to the industry, and the appointment of a dedicated crypto “czar” to oversee these efforts. During a bitcoin conference last summer, Trump assured attendees, saying, “You’re going to be very happy with me.”
Bitcoin’s Rise and Market Dynamics
Bitcoin, the foremost cryptocurrency created in 2009, operates independently of traditional banking systems and government oversight. Over the years, it has transitioned from a niche financial product to a mainstream investment, albeit with considerable volatility. Critics have often targeted cryptocurrencies for their association with illicit activities and their speculative nature, dismissing them as little more than Ponzi schemes.
Despite these criticisms, the cryptocurrency market has shown resilience, bouncing back from several downturns. Following Trump’s election victory, Bitcoin’s price surged, previously reaching $100,000 for the first time last month before experiencing a slight dip to around $90,000. As of Friday, Bitcoin’s value rose approximately 5%, landing around $104,000, according to CoinDesk.
Trump’s Administration and Crypto Support
Trump’s cabinet selections reflect a pro-cryptocurrency stance, with key positions within the Treasury and Commerce departments filled by individuals who support digital currencies. His choice for the Securities and Exchange Commission (SEC) is also aligned with this vision. Notably, the crypto community is celebrating this shift with a sold-out event called the “Crypto Ball,” featuring a lineup of musical entertainment to honor the first “crypto president.”
Proposed Actions in Early Days of Trump’s Presidency
Creation of a Crypto Advisory Council
One of Trump’s key pledges is to establish a special advisory council dedicated to crafting clear and straightforward regulations for the cryptocurrency sector within his first 100 days in office. Although specifics about the council remain sparse, Trump has already appointed tech executive David Sacks as the administration’s crypto “czar.” Furthermore, former congressional candidate Bo Hines will serve as the executive director of the “Presidential Council of Advisers for Digital Assets.”
Trump has assured the crypto community that these new regulations will be shaped by individuals who understand and support the industry, in stark contrast to the previous administration’s approach.
Strategic Bitcoin Reserve
Trump has also committed to creating a U.S. government reserve for Bitcoin, similar to the existing gold stockpile. He has indicated that the government will retain, rather than auction off, the significant amounts of Bitcoin seized through law enforcement actions. A draft executive order has been circulated proposing the establishment of a “Strategic Bitcoin Reserve” managed by the Treasury Department, with a target of holding at least $21 billion in Bitcoin.
This initiative has received backing from figures like Republican Senator Cynthia Lummis, who has previously advocated for the governmental stockpiling of Bitcoin to diversify national assets. Critics, however, caution that Bitcoin’s inherent volatility could undermine its effectiveness as a reserve asset.
Focus on Criminal Justice Reform
At the recent bitcoin conference, Trump garnered enthusiastic support when he reaffirmed his commitment to commuting the sentence of Ross Ulbricht, the founder of Silk Road, a notorious online marketplace that utilized cryptocurrencies for illegal transactions. This pledge has resonated with certain segments of the crypto community and libertarian activists who argue that Ulbricht’s conviction was a result of overreach by government authorities.
