Bitcoin prices have skyrocketed following Donald Trump’s re-election, with the cryptocurrency surpassing $100,000 in early December, marking a more than 40% surge since the November presidential election. The rally has been fueled by optimism in the crypto market as Trump signals a more supportive stance toward digital currencies.
During his campaign, Trump pledged to make the United States the “crypto capital of the planet,” a significant shift from his previous skepticism about cryptocurrencies. Following his victory, reports indicate that Trump’s team is prioritizing crypto-friendly policies. He is reportedly considering candidates with pro-crypto leanings for key positions in his administration, including hedge-fund manager Scott Bessent as a potential Treasury Secretary nominee.
Adding to this momentum, sources have suggested that Trump’s administration is weighing the creation of a new White House staff role focused exclusively on crypto policy. Such a move underscores the administration’s commitment to fostering growth and innovation in the crypto industry.
A Changing Regulatory Landscape
The change in administration is also expected to bring a shift in the regulatory environment for cryptocurrencies. Outgoing Securities and Exchange Commission (SEC) Chair Gary Gensler, who has been a prominent critic of the crypto industry and led several high-profile lawsuits against major exchanges, is set to be replaced. Trump’s pick for the role, Paul Atkins, is co-chair of the Token Alliance, a crypto advocacy group, and is widely viewed as more crypto-friendly.
This potential regulatory pivot comes at a pivotal time for the crypto industry. In early 2024, the SEC approved “spot” exchange-traded funds (ETFs) tied to bitcoin’s market price, allowing investors to gain exposure to the cryptocurrency without holding it directly. Among the most notable ETFs are the iShares Bitcoin Trust (IBIT), Grayscale Bitcoin Trust ETF (GBTC), and Fidelity Wise Origin Bitcoin ETF (FBTC). In July, the SEC expanded its approvals to include ETFs directly linked to ethereum, the second-largest cryptocurrency.
Proceed with Caution
Despite the bullish sentiment surrounding crypto assets, experts caution investors to tread carefully. The cryptocurrency market remains highly volatile, with prices subject to sharp fluctuations. As a result, financial advisors typically recommend limiting exposure to crypto investments to a small portion of one’s portfolio—around 1% to 3% of total holdings.
While the market’s enthusiasm is palpable, the road ahead will depend heavily on how Trump’s policies shape the regulatory and economic environment for cryptocurrencies. For now, Bitcoin’s historic rally highlights the renewed confidence in digital assets under a pro-crypto administration.
