Bitcoin Surges Past USD 100,000 Ahead of Anticipated Cryptocurrency Actions by Donald Trump

Bitcoin's value surpassed USD 100,000 again on Friday. This surge comes as the cryptocurrency sector anticipates swift actions from Donald Trump once he assumes the presidency next week. Trump, who previously dismissed bitcoin as a "scam," has now embraced digital currencies enthusiastically. He has launched a new cryptocurrency venture and pledged to transform the US into the "crypto capital" of the world.

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Trump's plans include establishing a US crypto stockpile, implementing favourable regulations, and appointing a crypto "czar." During a bitcoin conference last summer, Trump assured enthusiasts, "You're going to be very happy with me." Bitcoin, created in 2009 as electronic cash independent of banks or governments, has gained mainstream attention despite its volatile nature and association with criminal activities.

Bitcoin's Recent Surge

Bitcoin's price has risen significantly since Trump's election victory. It reached USD 100,000 for the first time last month before briefly dropping to around USD 90,000 earlier this week. On Friday, it increased by about 5% to approximately USD 104,000, according to CoinDesk. Two years ago, bitcoin was valued at around USD 20,000.

Trump's cabinet selections include crypto supporters for key positions like Treasury and Commerce departments and the Securities and Exchange Commission (SEC). The crypto industry felt targeted by the previous administration and heavily supported Trump's campaign. Wealthy players in the sector are hosting a "Crypto Ball" on Friday evening to celebrate Trump as the first "crypto president."

Crypto Council Initiatives

Trump promised to form an advisory council to create clear regulations for cryptocurrencies within his first 100 days in office. Although details remain unclear, Trump appointed tech executive David Sacks as the administration's crypto "czar." Bo Hines will serve as 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 industry advocates. Paul Atkins, Trump's SEC pick, is a strong cryptocurrency proponent. Crypto investors criticized the previous administration for stifling innovation through strict enforcement actions and accounting policies.

"As far as general expectations from the Trump Administration, I think one of the best things to bet on is a tone change at the SEC," said Peter Van Valkenburgh from Coin Center. Outgoing SEC Chairman Gary Gensler defended his office's actions against what he described as a crypto industry "rife with bad actors."

Strategic Bitcoin Reserve Plans

Trump also vowed to ensure that the US government stockpiles bitcoin like it does with gold. At a bitcoin conference this summer, he stated that seized bitcoins would be retained rather than auctioned off. A draft executive order proposes creating a "Strategic Bitcoin Reserve" managed by the Treasury Department through its Exchange Stabilization Fund.

The draft order suggests holding at least USD 21 billion in bitcoin. Republican Senator Cynthia Lummis previously proposed legislation for government bitcoin stockpiling to diversify holdings and hedge against financial risks. Critics argue that bitcoin's volatility makes it unsuitable as a reserve.

Zack Shapiro from the Bitcoin Policy Institute said creating such a stockpile would help legitimize bitcoin in people's eyes who currently view it skeptically.

Ross Ulbricht Case

During this year's bitcoin conference, Trump received applause when he reiterated his promise to commute Ross Ulbricht's life sentence. Ulbricht founded Silk Road, a website using crypto for drug transactions. His case has galvanized some crypto advocates and Libertarian activists who believe government investigators overstepped in prosecuting Silk Road.

Trump's presidency could significantly impact cryptocurrency regulation and adoption in the US. His administration's actions will likely shape how digital currencies are perceived and integrated into mainstream finance.