Bitcoin finally crossed the six-digit threshold after tiptoeing above $100,000 for several days before surging to more than $102,000 in early Thursday trading. Cryptocurrencies have been surging at a ferocious pace after Donald Trump regained support in the U.S. presidential election in early November. Trump is widely seen as being friendly to the cryptocurrency industry.
As recently as November 5th, Bitcoin was trading below $70,000, but has since skyrocketed to above the psychologically symbolic $100,000 level. This marks a sharp reversal for the cryptocurrency, which was trading below $20,000 in late 2022, after soaring interest rates and various scams dampened traders' enthusiasm for the digital asset.
This rise in movement has ballooned the total amount of existing Bitcoin to over $2 trillion.
Trump administration is friendly towards virtual currencies
Now, the Trump administration is pledging to be crypto-friendly, paving the way for broader institutional adoption of cryptocurrencies, and perhaps beyond.
“This price increase is due to the recognition that the incoming administration will be crypto-friendly due to Donald Trump’s election victory, and investors’ access to digital assets due to the introduction of new exchange-traded products and global regulatory clarity. ” said Pascal Saint-Jean, CEO of 3iQ, a global digital asset investment manager.
President Trump has selected lobbyist and former Securities and Exchange Commission (SEC) Commissioner Paul Atkins to lead the SEC. Atkins is considered a crypto advocate and co-chairs the Token Alliance, a cryptocurrency lobbying group. Mr. Atkins will replace current SEC Commissioner Gary Gensler, who is retiring on January 20, 2025. During his tenure, Gensler was responsible for cracking down on cryptocurrency fraud.
Other potential initiatives indicate that the Trump administration is friendlier to cryptocurrencies. During the campaign, Trump talked about establishing a national stockpile of Bitcoin. The incoming administration is also discussing creating a role in the White House to direct Bitcoin policy.
“Investors expect the Trump administration to push for a much friendlier regulatory framework than the current one,” said David Morrison, senior market analyst at fintech and financial services firm Trade Nation. speak
Other factors causing Bitcoin price rise
But it's not just a pro-crypto president-elect that's driving up the price of Bitcoin and other cryptocurrencies in 2024. Bitcoin prices had been trending strongly before the election.
This year has seen the emergence of Bitcoin ETFs and Ethereum ETFs, both of which hold actual digital assets and allow traders to track the cryptocurrencies without directly owning them. These funds have helped facilitate widespread investment in these cryptocurrencies due to their easy access on traditional stock exchanges and low fees.
The advent of options trading on Bitcoin ETFs has also led to further bets on the cryptocurrency, with fund managers quickly rolling out trading products that add even more leverage (and risk) to Bitcoin trading.
