Crypto Rally Driven by Policy Hopes
Bitcoin, the world’s largest cryptocurrency, shattered records in December by breaching the $100,000 mark, capping a year in which its value more than doubled. By Tuesday afternoon, bitcoin traded at $93,413.90, underscoring the sector’s heightened optimism as President-elect Donald Trump prepares to take office. Smaller cryptocurrencies such as ether and solana have also seen significant gains, buoyed by investor enthusiasm.
Enthusiasts credit the surge to Trump’s vocal support for cryptocurrencies. On the campaign trail, the president-elect promised to transform the United States into the “crypto capital of the planet.” Trump pledged to create regulations tailored specifically to digital assets, establish a national bitcoin reserve, and streamline policies to enhance the industry’s growth.
“We’re going to do something great with crypto,” Trump told CNBC after a high-profile appearance at the New York Stock Exchange in December. “Others are embracing it, and we want to be ahead.”
Crypto Allies Poised to Shape Key Policies
Trump’s appointments for senior positions in his administration have further fueled optimism within the crypto community. Paul Atkins, a lawyer known for his crypto-friendly stance, is set to lead the Securities and Exchange Commission (SEC). Current SEC Chair Gary Gensler, who has pursued aggressive actions against major crypto exchanges, will step down on Inauguration Day.
Howard Lutnick, CEO of Cantor Fitzgerald—a firm with substantial holdings in cryptocurrency company Tether—is Trump’s nominee for commerce secretary. Meanwhile, venture capitalist David Sacks will serve as the White House AI and crypto czar.
In a bold move, Trump has also announced the creation of a new Department of Government Efficiency (DOGE), to be co-led by Elon Musk and Vivek Ramaswamy. Musk, an outspoken advocate of Dogecoin, brings a prominent voice to the administration’s crypto initiatives.
Wall Street Embraces the Crypto Boom
Institutional players on Wall Street are increasingly warming to digital assets, signaling a shift in mainstream acceptance. BlackRock launched its iShares Bitcoin Trust ETF in January, offering retail investors a pathway to purchase bitcoin. Options for the ETF debuted in November, marking another milestone for the crypto industry.
Goldman Sachs, which reported more than $700 million in crypto ETF holdings last November, is also making strides into the sector. Even Charles Schwab, under the leadership of CEO Rick Wurster, has hinted at exploring spot trading for cryptocurrencies once regulatory hurdles ease.
Uncertainty Clouds Crypto’s Trajectory
While the crypto market’s recent performance has electrified investors, uncertainty remains. Analysts note that digital currencies are inherently volatile and subject to boom-and-bust cycles.
“The market believes there is a large pile of catalysts on the horizon. However, we don’t have any of them yet,” said Alex Thorn, head of research at Galaxy Digital.
In 2022, bitcoin’s value plunged below $16,000 following the collapse of FTX, a major exchange founded by Sam Bankman-Fried. Yet, optimism persists. Deribit data shows investors betting on bitcoin reaching $120,000 or even higher in the coming months.
“I think bitcoin could easily be above $200,000 by the end of 2025,” Thorn added, reflecting the bullish sentiment among crypto enthusiasts.
As Trump’s presidency nears, the crypto community is watching closely to see whether his promises will materialize and drive digital assets further into the mainstream.
