NEW YORK — Emerging from the remnants of the 2008 global financial crisis, bitcoin was introduced at a time when public trust in the financial system and government safeguards had diminished significantly. Today, the increasing acceptance of bitcoin by government institutions is contributing to its soaring prices, enriching its supporters along the way.
Recently, bitcoin’s value briefly exceeded $103,000, triggered by comments from President-elect Donald Trump regarding his plan to nominate Paul Atkins, a former regulator who is viewed as favorable toward cryptocurrencies, to chair the Securities and Exchange Commission. This nomination is set to replace Gary Gensler, whose critics argue has been overly stringent in regulating the crypto market.
This surge in price marks a remarkable chapter in bitcoin’s journey, characterized by its notorious price volatility. Over the past year, bitcoin’s value has more than doubled, with a significant increase occurring post-Election Day, when prices were under $70,000. During his campaign, Trump had called for the U.S. to become the “crypto capital of the planet.”
On the other hand, the crypto sector is playing an active role in shaping political landscapes in Washington. Companies involved in cryptocurrency have contributed upwards of $119 million in 2024 to influence federal election outcomes, primarily focusing on a political action committee aimed at supporting pro-crypto candidates while combating skeptical ones, as outlined in a review by Public Citizen.
These contributions reflect a substantial portion of the political funding landscape, with crypto firms accounting for 44% of all corporate donations made in this year’s electoral campaigns, according to the consumer advocacy group. This level of political engagement represents a notable shift from bitcoin’s inception when it was created by an entity or individual known as Satoshi Nakamoto. Nakamoto envisioned a decentralized currency that operates independently of any governing body or financial institution.
In the initial white paper detailing bitcoin, Nakamoto acknowledged that conventional internet transactions fulfilled most needs yet remained susceptible to the “inherent weaknesses of the trust-based model” requiring third-party involvement, such as banks, for processing payments. Instead, Nakamoto proposed leveraging global computing power to create a digital currency resistant to double-spending, necessitating a system based on cryptographic proof that allows direct transactions between independent parties without intermediaries.
Since its introduction, bitcoin has gradually transitioned from a niche alternative to a more mainstream asset, albeit with fluctuations along the way. Although it has yet to achieve widespread use for everyday purchases like groceries, it has gained traction as “digital gold,” serving as a store of value insulated from direct government or central bank control.
Initially associated with nefarious activities, such as drug trafficking and scams, bitcoin has since begun to penetrate traditional investment portfolios. Earlier this year, the SEC approved exchange-traded funds (ETFs) that track bitcoin’s spot price, enabling users to invest in bitcoin more conveniently through their existing brokerage accounts.
Throughout its existence, bitcoin has experienced dramatic bull markets alongside significant downturns. Starting just over $5,000 at the onset of the COVID-19 pandemic, its value peaked around $69,000 in late 2021, only to plummet below $17,000 due to rising interest rates imposed by the Federal Reserve and the spectacular fallout of the FTX crypto exchange in 2022.
With bitcoin currently witnessing another bull phase, the incoming president appears to take some credit for this momentum. In a celebratory post on his Truth Social platform, Trump declared, “CONGRATULATIONS BITCOINERS!!!” adding, “$100,000!!! YOU’RE WELCOME!!!”
