Bitcoin has reached an unprecedented milestone, surging past $100,000, driven by investor optimism about a pro-crypto stance from U.S. President-elect Donald Trump. Since his election victory, the cryptocurrency has risen over 50%, fueled further by his appointment of crypto advocate Paul Atkins to lead the SEC, signaling potential regulatory support. Trump’s commitment to making the U.S. “the bitcoin superpower” is reflected in his nominations of crypto enthusiasts to key positions, which has boosted confidence in the market. The rally was also bolstered by the introduction of Bitcoin-focused stock market funds earlier in the year.
This dramatic resurgence marks a significant turnaround for the sector, which faced turmoil just two years ago following the collapse of FTX and the SEC’s aggressive enforcement actions under outgoing chair Gary Gensler. Prominent crypto firms like Binance, Coinbase, and Ripple faced penalties or lawsuits during his tenure. Now, the industry anticipates a “golden era,” with expectations that Trump’s administration will create a regulatory framework favorable to institutional investors, potentially unleashing a surge of capital from major asset managers.
Institutional interest has been a key driver of Bitcoin’s recent rally. ETFs managed by giants like BlackRock and Fidelity have attracted billions since receiving regulatory approval, with inflows accelerating after Trump’s election. Companies like MicroStrategy, led by Michael Saylor, have also contributed, raising billions for Bitcoin investments. Trump’s shift in perspective on cryptocurrencies, bolstered by significant campaign contributions from crypto investors, underscores a new chapter of mainstream adoption and optimism for the sector.
Although cryptocurrencies appeared long ago in the markets, it might still be too early to determine whether they will play a key role in the global economy or be relegated to just one of many assets. However, having the world’s superpower boost Bitcoin and other virtual currencies definitely paves the way in the former direction. In any case, investors should be wary of the high volatility of these assets, ensuring they diversify their portfolios when making investment decisions.
Author: Luis Cabezas