The price of Bitcoin soared above $100,000 early Friday, fueled by anticipation of significant pro-crypto actions from President-elect Donald Trump, who is set to take office next week. The cryptocurrency industry is optimistic that Trump’s administration will usher in a new era of regulatory support for digital assets.
Once a vocal skeptic who referred to Bitcoin as “a scam,” Trump has since embraced cryptocurrencies with fervor. During his presidential campaign, he pledged to make the United States the “crypto capital of the world” through measures such as creating a U.S. crypto reserve, implementing industry-friendly regulations, and appointing a dedicated crypto “czar” to lead his administration’s efforts.
“You’re going to be very happy with me,” Trump assured crypto enthusiasts at a Bitcoin conference last summer, signaling his commitment to the sector.
Bitcoin’s Meteoric Rise
Bitcoin, the world’s largest cryptocurrency, has experienced dramatic growth since Trump’s election victory last November. It first surpassed the $100,000 milestone last month before briefly dipping to $90,000 earlier this week. On Friday, the cryptocurrency gained 5%, reaching $104,000, according to CoinDesk.
Two years ago, Bitcoin was trading at approximately $20,000, demonstrating its resilience despite its history of extreme price volatility and skepticism from critics. Opponents of cryptocurrency have long pointed to its use in illicit activities and its Ponzi-like characteristics. Yet, the industry has defied such concerns, becoming an increasingly mainstream financial instrument.
A Shift in Regulatory Tone
The incoming administration is expected to mark a dramatic departure from the regulatory stance of the Biden era, which crypto advocates criticized as overly restrictive. Outgoing SEC Chairman Gary Gensler faced backlash for what industry leaders described as heavy-handed enforcement and stifling innovation.
Peter Van Valkenburgh, executive director of advocacy group Coin Center, expressed hope for a “tone change at the SEC” under Trump’s leadership. Trump has selected Paul Atkins, a prominent cryptocurrency advocate, to chair the Securities and Exchange Commission, alongside other crypto-friendly appointees at the Treasury and Commerce departments.
Further, Trump has announced the creation of a Presidential Council of Advisers for Digital Assets, with Bo Hines serving as its executive director. Additionally, tech entrepreneur David Sacks has been named the administration’s crypto “czar,” responsible for spearheading efforts to establish “clear and straightforward” regulations.
Strategic Bitcoin Reserve
One of Trump’s boldest promises is to create a U.S. Bitcoin reserve, positioning the digital currency as a national asset. At a Bitcoin conference last year, Trump declared that the government would retain, rather than auction, seized Bitcoin holdings. The U.S. currently holds nearly $20 billion worth of Bitcoin, acquired through law enforcement actions.
Advocates have proposed a draft executive order to establish a Strategic Bitcoin Reserve, administered by the Treasury Department. The proposal aims to diversify government assets and elevate Bitcoin’s status as a legitimate financial instrument.
“This would be a giant step toward Bitcoin becoming normalized and legitimized in the eyes of skeptics,” said Zack Shapiro, head of policy at the Bitcoin Policy Institute.
While critics warn of Bitcoin’s volatility as a reserve asset, proponents argue that such measures could enhance its role in the financial system and solidify the United States’ leadership in the cryptocurrency space.
With Trump’s inauguration just days away, the cryptocurrency world is bracing for a transformative era that could redefine the industry’s relationship with U.S. regulators.