In Washington, the value of bitcoin has exceeded $100,000 once again as the cryptocurrency sector anticipates proactive measures from Donald Trump following his inauguration next week.
Initially, he expressed skepticism about digital currencies, even labeling bitcoin a “scam.” However, Trump has since turned into a fervent supporter of cryptocurrencies, having launched a new crypto initiative and promising on the election trail to transform the United States into the “crypto capital” of the globe.
Among his proposals are plans to establish a U.S. crypto reserve, implement favorable regulations, and appoint a dedicated crypto leader within his administration.
“You’re going to be very happy with me,” Trump declared during a bitcoin conference attended by crypto enthusiasts last summer.
Bitcoin, launched in 2009, is the leading cryptocurrency, designed as a form of digital cash free from governmental or banking control. Over time, it and its newer counterparts have fluctuated between obscurity and popularity in the financial world.
Despite the volatile nature of cryptocurrencies and their associations with criminal activity, criticisms abound regarding their practical use and allegations that they can represent Ponzi schemes.
Nonetheless, cryptocurrencies have proven resilient against skeptics, recovering from multiple significant price declines throughout their brief history. Wealthy individuals in the crypto community, who felt marginalized under the previous administration, heavily supported Trump’s electoral bid last November.
Bitcoin’s value has skyrocketed since Trump’s win, recently surging past $100,000 for the first time last month before dipping to around $90,000 earlier this week. Comparatively, two years prior, it traded for approximately $20,000.
On Friday, bitcoin appreciated by about 5% to around $104,000, according to CoinDesk data.
Trump has appointed several supporters of cryptocurrency to high-level cabinet and regulatory positions, including leaders of the Treasury and Commerce departments, as well as the Securities and Exchange Commission (SEC).
A notable event, the inaugural “Crypto Ball,” is set for Friday evening, featuring an impressive lineup of musical performances to commemorate the arrival of the first “crypto president.” The event sold out quickly, with tickets fetching several thousand dollars each.
Looking ahead, Trump is expected to unveil several measures during the early days of his presidency:
**CRYPTO COUNCIL**
Trump had promised as a candidate to establish an advisory council focused on crafting “clear” regulations for the cryptocurrency space within the first 100 days of his presidency.
While specific details about the council remain vague, after securing his election, Trump appointed tech entrepreneur and venture capitalist David Sacks as the administration’s “crypto czar.” Additionally, former congressional candidate Bo Hines was announced as the executive director of the “Presidential Council of Advisers for Digital Assets.”
In a past bitcoin conference, Trump indicated that future regulations would be created by those who support the crypto industry, rather than by those who oppose it. Paul Atkins, Trump’s nominee for SEC chair, is known for advocating for cryptocurrencies.
Investors and crypto-related businesses have voiced concerns over previous regulatory actions taken by the Biden administration, stating that heavy-handed enforcement and accounting policies have hindered innovation in the sector, particularly under the outgoing SEC chair, Gary Gensler.
“Expect a more supportive tone from the Trump Administration regarding the SEC,” noted Peter Van Valkenburgh, executive director of the advocacy group Coin Center.
Gensler recently stated in an interview that he is proud of his agency’s efforts to regulate the crypto industry, which he believes is filled with “bad actors.”
**STRATEGIC BITCOIN RESERVE**
Trump’s vision for his presidency includes plans to ensure that the U.S. government maintains a bitcoin reserve akin to its current gold holdings.
During a summer bitcoin conference, he expressed that the government would retain the billions of dollars in bitcoin it has confiscated through legal enforcement processes instead of auctioning it off.
Advocates within the crypto community have circulated a draft executive order proposing to create a “Strategic Bitcoin Reserve” as a long-term national asset, managed by the Treasury Department through its Exchange Stabilization Fund.
This proposed order suggests that the Treasury Department should ultimately hold at least $21 billion in bitcoin.
Senator Cynthia Lummis of Wyoming has previously introduced legislation aimed at establishing a government bitcoin reserve, which proponents argue would diversify government assets and protect against financial volatility. However, critics assert that bitcoin’s inherent price fluctuations make it an unsuitable reserve.
As Zack Shapiro, an attorney and head of policy at the Bitcoin Policy Institute, stated, creating such a reserve would be a significant step towards legitimizing bitcoin in the eyes of skeptics.
**ROSS ULBRICHT**
At a recent bitcoin conference, Trump was met with applause as he reaffirmed his intention to commute the life sentence of Ross Ulbricht, the founder of Silk Road, a drug-trading website that employed crypto for transactions.
Ulbricht’s situation has mobilized various crypto supporters and Libertarian activists who argue that law enforcement overstepped its bounds when pursuing the case against Silk Road.