Bitcoin Price Surges Past USD 109,000 as Cryptocurrency Industry Awaits Trump’s Early Action

The price of Bitcoin soared past $109,000 early Monday, just before President-elect Donald Trump's inauguration. The cryptocurrency industry is optimistic about Trump's potential actions upon returning to the White House. Trump, once a sceptic who called Bitcoin a "scam," has now embraced digital currencies. He launched a new cryptocurrency venture and pledged to make the US the "crypto capital" of the world during his campaign.

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Bitcoin, created in 2009 as electronic cash independent of banks or governments, has become the most popular cryptocurrency. Despite its volatile nature and association with criminal activities, it has moved from the financial fringes to mainstream acceptance. Critics argue that cryptocurrencies have limited utility and are often Ponzi schemes. However, crypto has defied sceptics and survived multiple price drops.

Trump's administration plans include creating a US crypto stockpile, enacting industry-friendly regulations, and appointing a crypto "czar." At a Bitcoin conference last summer, Trump assured enthusiasts, "You're going to be very happy with me." His cabinet picks for key positions include crypto supporters for Treasury, Commerce, and the Securities and Exchange Commission.

Bitcoin Price Surge

Wealthy crypto industry players felt targeted by the Biden administration and heavily supported Trump's election win. Bitcoin's price surged after Trump's victory, exceeding $100,000 for the first time last month before briefly dropping to around $90,000. On Friday, it rose by about 5% and jumped more than $9,000 early Monday, according to CoinDesk. Two years ago, Bitcoin was trading at approximately $20,000.

Crypto investors were frustrated with what they perceived as a hostile Biden administration. They criticised excessive enforcement actions and accounting policies that stifled innovation. Outgoing SEC Chairman Gary Gensler was particularly targeted for his strict measures against the crypto industry. Peter Van Valkenburgh from Coin Center expects a tone change at the SEC under Trump.

Strategic Bitcoin Reserve

Trump also promised to ensure the US government stockpiles Bitcoin like gold. At a Bitcoin conference this summer, he stated that the government would retain seized Bitcoin rather than auction it off. A draft executive order online proposes establishing a "Strategic Bitcoin Reserve" as a permanent national asset managed by the Treasury Department through its Exchange Stabilisation Fund.

Republican Senator Cynthia Lummis of Wyoming proposed legislation for the US government to stockpile Bitcoin. Advocates believe this would diversify government holdings and hedge against financial risks. Critics argue that Bitcoin's volatility makes it unsuitable as a reserve asset. Zack Shapiro from the Bitcoin Policy Institute said such a stockpile would legitimise Bitcoin in the eyes of sceptics.

Crypto Council

During his campaign, Trump promised to create an advisory council for clear crypto regulations within his first 100 days in office. Details about this council remain unclear. However, after winning November's election, Trump appointed tech executive David Sacks as the administration's crypto "czar." Former congressional candidate Bo Hines will be executive director of the "Presidential Council of Advisers for Digital Assets."

At last year's Bitcoin conference, Trump assured supporters that new regulations would be crafted by those who love the industry. Trump's SEC pick Paul Atkins is a strong advocate for cryptocurrencies. Crypto enthusiasts celebrated with a sold-out "Crypto Ball" on Friday to honour Trump as the first "crypto president."

At an earlier Bitcoin conference this year, Trump reiterated his promise to commute Ross Ulbricht's life sentence. Ulbricht founded Silk Road, a drug-selling website using crypto payments. His case has energised some crypto advocates and Libertarian activists who believe investigators overreached in their case against Silk Road.

The cryptocurrency industry is hopeful about Trump's presidency and potential regulatory changes that could benefit digital currencies in the US.