President Trump delivers the keynote speech at the Bitcoin 2024 conference in Nashville on July 27, 2024. Bitcoin has soared since President Trump was elected on expectations that he will install an administration that is friendly to his country's interests. John Cherry/Getty Images/Getty Images North America Hide caption
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Bitcoin hit $100,000 for the first time on Wednesday, a remarkable milestone for a cryptocurrency created under mysterious circumstances more than 15 years ago and essentially based on computer coding. It became.
This surge was nothing short of amazing. Bitcoin's value has more than doubled this year, further accelerated by the election of President Donald Trump.
The reason is simple. President Trump has vowed to make the United States the “crypto capital of the planet” by bringing in friendly regulators and ending harsh enforcement actions taken against the sector under President Joe Biden. I promised.
In fact, Bitcoin surpassed the $100,000 milestone after President Trump nominated crypto advocate Paul Atkins as the next chairman of the Securities and Exchange Commission earlier in the day, making things more industry-friendly. Expectations for the Wall Street Cop have increased.
President Trump has also proposed a “strategic reserve” for cryptocurrencies, which could lead to the country becoming a direct investor in cryptocurrencies. His family even has financial interests in crypto ventures.
Cryptocurrency investors may be rooting for Trump, but critics are wary.
Cryptocurrencies have a long history of fraud and scams, as evidenced by the collapse of cryptocurrency exchange FTX in 2022. And they are notoriously unstable. Some critics believe it could even pose a risk to the country's financial system.
Here are three things to know about Bitcoin's incredible movement:
How the election of President Donald Trump has changed the world of cryptocurrencies
Trump's return to the White House promises to be a game-changer for Bitcoin. The rally gained momentum even before Trump was elected, and prices have soared since Election Day as investors expected him to win.
It's been a surprising rise in the cryptocurrency created by a mysterious person (or characters) named Satoshi Nakamoto, whose true identity has not yet been revealed.
President Trump has previously been skeptical of cryptocurrencies, calling them a “fraud” and telling Fox Business that “disaster could occur.”
Things have changed.
Trump has vowed to form a crypto-friendly administration and has enthusiastically solicited votes from the crypto industry. On Wednesday, he appointed Atkins to replace current SEC Chairman Gary Gensler, who has antagonized the crypto industry with aggressive enforcement actions, particularly against major companies. Gensler said last month that he would resign on January 20, the day President Trump is scheduled to take office.
President Trump is also expected to appoint like-minded regulators at other agencies important to the sector, such as the Commodity Futures Trading Commission.
In addition to supporting Trump, the crypto sector has spent millions of dollars to elect friendly people to Congress. These efforts included helping Republican Bernie Moreno, a businessman who has voiced support for cryptocurrencies, defeat Democratic Sen. Sherrod Brown in Ohio. Brown, who chairs the Senate Banking Committee, is skeptical of cryptocurrencies.
With Republicans in control of Congress again next year, we can expect more favorable regulation of the crypto sector.
BlackRock executives ring the opening bell as a Bitcoin-related investment fund is launched on the Nasdaq exchange in New York City, January 11, 2024. The launch of these investment funds has allowed Bitcoin to become a little more mainstream. Stephanie Keith/Getty Images/Getty Images North America Hide caption
Toggle caption Stephanie Keith/Getty Images/Getty Images North America
Rise is expected to continue, but may become unstable
Given the speed of Bitcoin's rise over the past few weeks, investors are hoping for further gains. But they're not just optimistic because of President Trump and the Republican Congress.
Bitcoin has become more mainstream, especially since earlier this year, when Gensler reluctantly approved the launch of a Bitcoin-related investment fund (called an exchange-traded fund) that the average investor could own.
These funds are popular and have over $100 billion in total assets. As a result, demand for Bitcoin is increasing.
However, cryptocurrencies are notoriously unstable. The industry has also seen a remarkable implosion. FTX, once the world's largest cryptocurrency exchange, went bankrupt in 2022, with its founder and CEO Sam Bankman Fried accused of stealing billions of dollars in customer funds. convicted of a crime. Bankman Freed was later sentenced to 25 years in prison.
critics are wary
Many critics are concerned about the volatile and checkered history of cryptocurrencies.
Dennis Kelleher, president and CEO of the advocacy group Better Markets, worries that the average investor could be seduced by promises of wealth and end up becoming a victim of fraud. I am doing it.
“Cryptocurrency is a priority for crypto billionaires who are getting rich with cryptocurrencies through speculators and gamblers, and frankly everything from money laundering to funding terrorists and rogue states to tax evasion. There are a lot of people who are getting rich off of their criminal activities,” Kelleher said. he said in a recent interview with NPR.
“But all that money is coming out of the pockets of people who are being led to believe that this particular new financial instrument has some value, or is worth something, when in reality it is just a vehicle for speculation.” he added.
As cryptocurrencies become more mainstream due to deregulation, they could be further integrated into national financial systems, increasing volatility and potentially leading to a financial crisis, Kelleher said. Warn.
Referring to that year's global financial crisis, Kelleher said: “The clock will start ticking towards the coming catastrophic financial crisis, which in my view will be much worse than 2008. Deaf,” he said. “It's only a matter of time.”
Additional reporting by Maria Aspan
