Trump's crypto boost: Bitcoin surges past $80,000 barrier
President-elect Donald Trump's favorability toward cryptocurrencies has invigorated the market and led to an influx of capital. On Sunday, the price of Bitcoin, the most popular virtual currency, briefly surpassed $80,000, setting another valuation record.
The cryptocurrency market is experiencing a boom. For the first time in history, Bitcoin, the highest-valued virtual currency, broke the $80,000 barrier on Sunday, though it then dipped below that level. The increased demand for this cryptocurrency can be attributed to Donald Trump, the President-elect, who promised during his election campaign to make the United States the "crypto capital of the planet."
According to some analysts, Bitcoin might reach the value of $100,000 in January, before Trump's inauguration. Another factor driving the current rise in Bitcoin's price, besides Trump's victory, is the Federal Reserve's decision to cut interest rates by 25 basis points. The Fed's decision on Thursday means interest rates in the US will now be between 4.5% and 4.75%.
A turn toward cryptocurrencies
As Bloomberg notes, Trump's position contrasts with the crackdown on cryptocurrencies under President Joe Biden. Gary Gensler, the Securities and Exchange Commission (SEC) Chairman, has repeatedly described the sector as rife with fraud and misconduct. The Commission tightened regulations on cryptocurrencies following the market crash in 2022 and a series of bankruptcies, notably the fraudulent exchange FTX run by Sam Bankman-Fried.
Let's remember that during his first presidency, and even afterward, Donald Trump often spoke negatively about Bitcoin. The situation changed this year. During the race for the US presidency against the Democrats (first Joe Biden, and after his withdrawal, Kamala Harris), Trump began to ingratiate himself with the crypto industry through controversial promises.
Digital asset companies and their management spent significant amounts promoting candidates perceived as favorable to their interests during the US election campaign. As reported by "The New Yorker," entrepreneurs associated with cryptocurrencies accounted for nearly half of the corporate donations that funded the election campaign through the Super PAC fund.
Noelle Acheson, author of the newsletter Crypto Is Macro Now, writes that Trump pledged supportive regulations, and the victory of the House of Representatives and the Senate makes the passage of cryptocurrency-related legislation much more likely.
