WASHINGTON (AP) — The price of bitcoin soared to more than $109,000 early Monday, just hours before President-elect Donald Trump’s inauguration, as the excited cryptocurrency industry bets he will take action soon after returning to the White House.
Formerly a skeptic, who a few years ago said bitcoin “seems like a scam,” Trump has embraced digital currencies with the zeal of a convert. He has launched a new cryptocurrency company and promised on the campaign trail to take steps early in his presidency to turn the United States into the “crypto capital” of the world.
His promises include creating a US cryptocurrency reserve, enacting industry-friendly regulations, and even appointing a crypto “czar” to his government.
“You’re going to be very happy with me,” Trump told cryptocurrency enthusiasts at a bitcoin conference last summer.
Bitcoin is the most popular cryptocurrency in the world and was created in 2009 as a type of electronic money not controlled by banks or governments. That and newer forms of cryptocurrencies have gone from the financial margins to the mainstream in crazy starts and stops.
The highly volatile nature of cryptocurrencies, as well as their use by criminals, scammers and rogue nations, has attracted many detractors, who claim that digital currencies have limited utility and are often just Ponzi schemes.
But so far, cryptocurrencies have defied the naysayers and survived multiple prolonged price drops in their short life. Wealthy figures in the cryptocurrency industry, who felt unfairly targeted by the Biden administration, spent heavily to help Trump win the November election. The price of bitcoin has risen since Trump’s victory, topping $100,000 for the first time last month before briefly dipping to around $90,000. On Friday, it was up about 5%. It jumped over $9,000 early Monday, according to CoinDesk.
Two years ago, bitcoin was trading at around $20,000.
Trump’s picks for key Cabinet and regulatory positions are packed with cryptocurrency supporters, including his pick to lead the Treasury and Commerce departments and the head of the Securities and Exchange Commission.
Key industry players held the first “Crypto Ball” on Friday to celebrate the first “crypto president.” The event was sold out, with tickets costing several thousand dollars.
Here’s a look at some detailed actions Trump could take in the early days of his administration:
CRYPTO TIP
As a candidate, Trump promised that he would form a special advisory council to provide guidance on creating “clear” and “direct” regulations on cryptocurrencies within the first 100 days of his presidency.
Details about the council and its members are still unclear, but after winning the November election, Trump named tech executive and venture capitalist David Sacks as the government’s crypto “czar.” Trump also announced in late December that former North Carolina congressional candidate Bo Hines will be executive director of the “Presidential Council of Advisors for Digital Assets.”
At last year’s bitcoin conference, Trump told cryptocurrency supporters that new regulations “will be written by people who love your industry, not hate your industry.” Trump’s pick to lead the SEC, Paul Atkins, has been a strong proponent of cryptocurrencies.
Cryptocurrency investors and companies complained about what they said was a hostile Biden administration that overreached in unfair enforcement actions and accounting policies that have stifled innovation in the industry, especially at the hands of outgoing SEC Chairman Gary Gensler.
“As for overall expectations from the Trump administration, I think one of the best things to bet on is a change in tone at the SEC,” said Peter Van Valkenburgh, executive director of the advocacy group Coin Center.
Gensler, who is set to leave office when Trump takes office, stated in a recent interview with Bloomberg that he is proud of his office’s actions in policing the cryptocurrency industry, which he said is “full of bad actors.”
BITCOIN STRATEGIC RESERVE
Trump also promised that as president he will ensure that the US government accumulates bitcoin, just as it already does with gold. At this summer’s bitcoin conference, Trump claimed that the US government will keep, rather than auction off, the billions of dollars in bitcoin it has seized through law enforcement actions.
Cryptocurrency advocates have posted a draft executive order online that will establish a “Bitcoin Strategic Reserve” as a “permanent national asset” to be managed by the Treasury Department through its Exchange Stabilization Fund. The order, in draft, calls for the Treasury Department to eventually hold at least $21 billion in bitcoin.
Republican Sen. Cynthia Lummis of Wyoming has proposed legislation requiring the U.S. government to stockpile bitcoin, which advocates say will help diversify government holdings and protect against financial risks. Critics warn that bitcoin’s volatility makes it a poor choice as a reserve asset.
Creating such a reserve will also be a “big step toward normalizing bitcoin, legitimizing it in the eyes of people who don’t yet see it as legitimate,” said Zack Shapiro, attorney and head of policy at the Bitcoin Policy Institute.
At this year’s bitcoin conference, Trump received loud applause when he reiterated a promise to commute the life sentence of Ross Ulbricht, the convicted founder of the Silk Road drug-selling website that used cryptocurrencies for payments.
Ulbricht’s case has energized some cryptocurrency advocates and libertarian activists, who believe government investigators went too far in building their case against Silk Road.
This story was translated from English by an AP editor with the help of a generative artificial intelligence tool.
