The Price of Bitcoin Surges Amidst Expectations of Trump's Early Action
WASHINGTON (AP) — The price of bitcoin has topped $100,000 again early Friday as a pumped-up cryptocurrency industry expects early action by Donald Trump when he's sworn in as president next week.
Once a skeptic who said a few years ago that bitcoin “seems like a scam,” Trump has embraced digital currencies with a convert's zeal. He's launched a new cryptocurrency venture and vowed on the campaign trail to take steps early in his presidency to make the U.S. into the “crypto capital” of the world.
Trump's Promises: Creating a Crypto-Friendly Environment
His promises include creating a U.S. crypto stockpile, enacting industry-friendly regulation, and even appointing a crypto “czar” for his administration. Trump has repeatedly emphasized his support for cryptocurrencies, which he views as an opportunity to promote American innovation and economic growth.
The Rise of Cryptocurrencies
Bitcoin is the world's most popular cryptocurrency and was created in 2009 as a kind of electronic cash uncontrolled by banks or governments. Despite its highly volatile nature, crypto has defied naysayers and survived multiple prolonged price drops in its short lifespan.
Wealthy players in the crypto industry spent heavily to help Trump win last November's election, and bitcoin has surged in price since his victory, topping $100,000 for the first time last month before briefly sliding down to about $90,000 earlier this week. Two years ago, it was trading below $10,000.
Trump's Plans: A Tone Change at the SEC and a Strategic Bitcoin Reserve
One of Trump's most significant promises is to create a more favorable regulatory environment for cryptocurrencies. He has vowed to write new regulations “by people who love your industry, not hate your industry,” which would likely result in a softer approach compared to his predecessor.
Crypto investors and companies have long complained about what they see as unfair enforcement actions and accounting policies by the Securities and Exchange Commission (SEC) under Chairman Gary Gensler. Trump's pick to lead the SEC, Paul Atkins, has been a strong advocate for cryptocurrencies.
Trump's Plan for a Strategic Bitcoin Reserve
Trump also promised that as president he'll make sure the U.S. government stockpiles bitcoin, much like it already does with gold. This move would be seen as a significant step towards legitimizing cryptocurrencies and could have far-reaching implications for investors and the economy.
Crypto advocates have posted a draft executive order online that would establish a “Strategic Bitcoin Reserve” as a “permanent national asset” that would be administered by the Treasury Department through its Exchange Stabilization Fund. The draft order calls for the Treasury Department to eventually hold at least $21 billion in bitcoin.
Ross Ulbricht and the Commutation of His Life Sentence
At the bitcoin conference earlier this year, Trump received loud cheers when he reiterated a promise to commute the life sentence of Ross Ulbricht, the convicted founder of the drug-selling website Silk Road that used crypto for payments. Ulbricht's case has energized some crypto advocates and Libertarian activists who believe government investigators overreached in building their case against Silk Road.
What It Means for Investors and the Economy
The impact of Trump's plans on investors and the economy as a whole remains uncertain. While a more favorable regulatory environment could boost investor confidence, concerns about volatility and security risks may continue to plague the industry.
As the cryptocurrency market continues to evolve, one thing is clear: the next chapter in this story will be shaped by Trump's policies and the response of investors, regulators, and governments around the world. Stay tuned for further updates on this developing story.