Bitcoin surpassed US$100,000 for the first time, propelled by “Trump pump” optimism surrounding the president-elect’s crypto-friendly policies.
The cryptocurrency, the largest by market value, soared to $102,510 on December 5, a 45% rise since Trump’s election victory in early November. It is currently trading around US$99,000.
Trump’s pro-crypto stance
In July 2024, at the Bitcoin 2024 conference in Nashville, Tennessee, Trump pledged to make the United States the “crypto capital of the planet.” In exchange, he received substantial financial support from prominent figures in the cryptocurrency industry.
Elon Musk’s attitude toward crypto is generally one of enthusiasm for its potential. He has championed specific coins like Bitcoin and Dogecoin. In early 2021, Tesla purchased $1.5 billion worth of Bitcoin and briefly accepted it as payment for vehicles. However, Bitcoin payments were suspended shortly after.
Recently, Trump announced plans to nominate cryptocurrency advocate Paul Atkins as chairman of the Securities and Exchange Commission. Trump praised Atkins as a “proven leader on common-sense regulation.”
On his social media platform, Trump said: “Digital assets and other innovations are crucial to making America greater than ever. »
A “carnival atmosphere”
Jason Titman, CEO of crypto brokerage Swyftx, noted that global trading volumes are surpassing mid-pandemic levels. “The appointment of Paul Atkins as SEC chairman has only added to the carnival atmosphere,” he told Bloomberg.
Bitcoin’s historic rise also benefited from year-end trends. Kyle Rodda, senior analyst at Capital.com, highlighted Bitcoin’s latest year-end rebounds, suggesting this current surge could expand further under the new administration.
Reviews
Warren Buffett called bitcoin a “gaming token.” “[Bitcoin] has no value, but that doesn’t stop people from wanting to play roulette.”
Bill Gates commented that cryptography is “100%” based on dumber theory.
Critics warn of environmental concerns over risks from energy-intensive mining and regulation. In 2021, China declared all cryptocurrency transactions illegal.
The inherent volatility of the asset is also something investors need to prepare for. On March 12, 2020, the price of Bitcoin fell by almost 40% in a single day, triggered by COVID-19. In June 2017, Ethereum briefly fell from US$319 to US$0.10 in seconds on GDAX (now Coinbase Pro) due to a large sell order and subsequent cascading stop-loss orders.
Regulations
Bitcoin’s rise beyond US$100,000 is seen as an important step towards mainstream acceptance. Cryptocurrency has suffered many crashes and “crypto winters”.
Australia’s stance on cryptocurrency is evolving, with regulators working to balance innovation and investor protection. The Australian Securities and Investments Commission has strengthened its oversight by proposing licensing requirements for cryptocurrency exchanges and businesses promoting digital assets. This potentially includes treating stablecoins and certain tokens as financial products, requiring compliance with strict regulatory standards.
Unlike the United States’ move toward crypto-friendly regulation, Europe is taking a cautious stance. The Markets in Crypto Assets (MiCA) Regulation recently introduced by the European Union aims to mitigate the risks associated with cryptocurrencies. Fabio Panetta, governor of Italy’s central bank, has criticized cryptoassets like Bitcoin as speculative and volatile, with no “intrinsic value.”
