WASHINGTON — Bitcoin’s value soared past $109,000 early Monday, shortly before President-elect Donald Trump’s inauguration, fueled by cryptocurrency industry optimism regarding his impending pro-crypto policies.
Once a bitcoin skeptic, Trump has become a fervent supporter of digital currencies. He’s launched a cryptocurrency venture and pledged to swiftly transform the U.S. into a global crypto hub.
His plans include establishing a U.S. crypto reserve, enacting favorable regulations, and appointing a crypto “czar.”
“You’re going to be very happy with me,” Trump told crypto enthusiasts at a bitcoin conference last summer.
Bitcoin, the leading cryptocurrency launched in 2009 as decentralized electronic cash, has transitioned from niche to mainstream status.
However, its volatility and use in illicit activities have drawn criticism, with some labeling it a Ponzi scheme.
Despite this, bitcoin has withstood multiple price crashes. Wealthy crypto industry players, feeling unfairly targeted by the Biden administration, heavily supported Trump’s election campaign. Since his victory, bitcoin’s value has surged, exceeding $100,000 last month before briefly dropping to around $90,000. It increased approximately 5% on Friday and jumped over $9,000 early Monday, according to CoinDesk.
Two years prior, bitcoin traded at roughly $20,000.
Trump’s cabinet and regulatory appointments include numerous crypto supporters, notably his selections to head the Treasury and Commerce departments and the Securities and Exchange Commission (SEC).
Key industry figures celebrated the first “crypto president” at a sold-out “Crypto Ball” on Friday, with tickets costing thousands of dollars.
Here’s a look at potential early actions by the Trump administration:
Crypto council
Trump promised a special advisory council to guide the creation of clear crypto regulations within his first 100 days in office.
While specifics remain unclear, Trump appointed a tech executive and venture capitalist as the administration’s crypto “czar” post-election. He also announced in late December that former North Carolina congressional candidate Bo Hines will be the executive director of the “Presidential Council of Advisers for Digital Assets.”
At last year’s bitcoin conference, Trump assured crypto supporters that new regulations “will be written by people who love your industry, not hate your industry.” Trump’s SEC appointee, Paul Atkins, is a strong crypto advocate.
Crypto investors and businesses felt stifled by what they perceived as the Biden administration’s overly aggressive enforcement and accounting policies, hindering innovation, particularly under outgoing SEC Chairman Gary Gensler.
“Regarding expectations from the Trump Administration, a shift in tone at the SEC is a safe bet,” said Peter Van Valkenburgh, executive director of Coin Center.
Gensler, departing with Trump’s inauguration, stated in a Bloomberg interview that he’s proud of his office’s efforts to regulate the crypto industry, which he described as rife with bad actors.
Strategic bitcoin reserve
Trump pledged to build a U.S. government bitcoin stockpile, similar to its gold reserves. He stated at a bitcoin conference that the government would retain, rather than auction, the billions of dollars in bitcoin seized through law enforcement.
Crypto advocates have proposed a draft executive order establishing a “Strategic Bitcoin Reserve” as a national asset, managed by the Treasury Department via its Exchange Stabilization Fund, aiming for at least $21 billion in bitcoin.
Republican Sen. Cynthia Lummis of Wyoming has introduced legislation to mandate government bitcoin stockpiling, arguing it diversifies holdings and mitigates financial risks. Critics cite bitcoin’s volatility as a drawback.
Creating such a reserve would significantly normalize and legitimize bitcoin, according to Zack Shapiro, head of policy at the Bitcoin Policy Institute.
Ross Ulbricht
Trump received enthusiastic support at a bitcoin conference for his commitment to commuting Ross Ulbricht’s life sentence. Ulbricht is the convicted founder of Silk Road, a drug marketplace using crypto payments.
Ulbricht’s case resonates with some crypto advocates and Libertarians who believe investigators overstepped in their prosecution of Silk Road.