Bitcoin accumulates one record after another. Donald Trump’s victory in the US presidential election and the probable conquest of the Republicans in the Senate and House of Representatives trigger a rally that took bitcoin to an all-time high above $82,000, an increase of almost 20% from November 6.
This is a dizzying rise that has seen the main cryptocurrency gain 80% since the beginning of 2024, surpassing the +25.7% achieved by the S&P 500 index, which brings together the 500 most capitalized companies in the US. In terms of market capitalization, bitcoin is now worth more than $1.5 trillion, more than the gross domestic product (GDP) of countries like Australia and Brazil. An increase that reflects investor expectations regarding what promises to be an authentic “revolution” in the regulation of the sector.
Trump’s pro-crypto turn
The change of course of the former and future US president regarding the crypto world represents one of the most notable turns in recent political history. In September 2024, Trump launched World Liberty Financial, a new company in the cryptocurrency sector developed with his sons Donald Jr. and Eric. In August, during a rally in Nevada reported cnnthe tycoon declared that cryptocurrencies could “define the future,” adding that he wanted to “see them minted and produced in the United States.”
Trump’s plans for the industry are ambitious and detailed. The most disruptive proposal concerns the creation of a national strategic bitcoin reserve, similar to the Strategic Petroleum Reserve that today contains approximately 600 million barrels of crude oil. According to sources from the Financial Timesthe plan aims to filter direct investments in cryptocurrencies as a national security measure. The president also promised to appoint industry-friendly regulators and significantly relax the regulatory framework that, during the administration of current US President Joe Biden, led to record fines, such as the $4.3 billion fine imposed on Binance.
Trump’s approach toward tech giants ranges from demanding stricter regulations for some players and a hands-off approach for others. Here’s how his second term could influence technology policies.
The domino effect in the cryptocurrency market
The bullish wave does not spare any segment of the digital currency market. Ethereum, the second largest cryptocurrency by capitalization, reached $3,200 per token8.9% more, only on Sunday. Even more impressive was the performance of Dogecoin, the cryptocurrency backed by Elon Musk; a staunch supporter of Trump and a possible major driving force in the next administration, which registered a jump of 20% in the same period. Solana, another major digital currency, gained 4.5%.
Trump’s promised crypto policy could mark a clear break with the Biden era. Under the leadership of Gary Gensler at the Securities and Exchange Commission (SEC); The American body that supervises the stock market and financial markets, it took years of legal battles and countless rejected applications before obtaining, in January 2024, approval of the first Bitcoin Index Fund (ETF). Furthermore, during Gensler’s administration, which began in 2021, the SEC embarked on a veritable crusade against the crypto sector: filing lawsuits against numerous companies, collaborating with the Department of Justice (DOJ) on high-profile investigations such as FTX, one of the largest crypto trading platforms that collapsed in 2022. Likewise, it has repeatedly emphasized the need to treat many cryptocurrencies as securities subject to strict federal securities regulations.
According to a report from Financial TimesStandard Chartered analysts predict that the new administration will bring rapid regulatory changes and a softer attitude from the SEC, factors that the market is already beginning to value. And according to StoneX Financial experts interviewed by BBCthe outlook is especially optimistic: bitcoin could reach $100,000, although periods of sharp price declines could occur along the way.
Article originally published in WIRED Italy. Adapted by Alondra Flores.
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