Why bitcoin is booming
The price of bitcoin surged past $100,000 for the first time on Thursday, continuing a post-election run buoyed by the pro-crypto promise of the incoming Trump administration.
On Election Day, bitcoin — one of the most popular decentralized digital assets available — was worth $69,374, according to the cryptocurrency trading platform Coinbase. Within a month, it had spiked more than 44 percent. Other cryptocurrencies like ethereum and XRP also shot up during that period.
Cryptocurrencies’ sudden increase in value is a sign of investor optimism about President-elect Donald Trump’s policies and those of his picks to head several key regulatory agencies, some of whom have explicitly promised deregulation of the crypto industry.
“That bitcoin hit the $100,000 mark reflects the expectation of both political support and regulatory latitude under the incoming administration,” said Ramaa Vasudevan, an economics professor at Colorado State University who has been critical of crypto. “The nomination of crypto-enthusiasts for administrative posts is a clear signal of the embrace of bitcoin and crypto triggering the flood of money into these markets.”
Bitcoin’s rally is also a product of its increased legitimacy. Trump’s election may have sparked its rally, but the financial establishment’s embrace of the asset in recent months provided the tinder. While bitcoin was once a niche curiosity, it is now a mainstream digital currency that everyday Americans can now buy through reputable retail investment accounts. Even if bitcoin ultimately turns out to be a bubble, as many economists have argued it may, these investment vehicles have assured it some staying power.
The policies of the incoming Trump administration are fueling optimism
Trump has been an ardent cryptocurrency supporter throughout his most recent presidential campaign, and his choices to lead key government agencies related to its regulation reflect that enthusiasm.
Bitcoin hit its highest valuation ever following the nomination of Paul Atkins on Wednesday to head the Securities and Exchange Commission (SEC), which is in charge of regulating tradable securities like stocks. Atkins was previously an SEC commissioner for six years during former President George W. Bush’s administration.
Atkins is “not necessarily the sort of burn-it-all-down type of nominee that Trump has decided upon for other positions,” Molly White, a cryptocurrency researcher and critic, told Vox. “He’s fairly establishment; he has the SEC background, but he also was a very strong advocate for deregulation when he was in the SEC and certainly since then.” Atkins is also a co-chair of the Chamber of Digital Commerce’s Token Alliance, an industry lobbying group that advocates for lax regulation of cryptocurrencies.
Perianne Boring, the CEO of the Chamber of Digital Commerce, is rumored to be one of Trump’s top picks for another key position: head of the Commodity Futures Trading Commission (CFTC), which makes rules around the trading of futures and commodities. Currently, cryptocurrency is under the purview of the SEC, but the Trump administration is reportedly weighing regulating it as a commodity instead. If that ch
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