Trump’s talk was enough to spark a cryptocurrency boom
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Donald Trump’s decisive election victory has lit up so-called cryptocurrency trading.
Bitcoin is up about 10%. On Wednesday, trading volume for BlackRock’s $33 billion iShares Bitcoin Trust exchange-traded fund recorded a new daily high of $4.1 billion. Other cryptocurrencies and crypto-related stocks also moved higher. Coinbase, one of the largest cryptocurrency exchanges, is up 40% this week. Online brokerage Robinhood Markets, which offers cryptocurrency trading, rose by a quarter, and MicroStrategy, which says it is the “largest holder of bitcoin,” rose nearly as much.
Investors are convinced that Trump’s return to the White House will benefit cryptocurrencies. The thin foundation here doesn’t really matter given the market frenzy.
After dismissing bitcoin as a “scam” as recently as 2021, Trump embraced the cryptocurrency and reaffirmed himself as its biggest champion during this year’s election campaign. At a bitcoin conference this summer, he promised to create a “strategic bitcoin reserve” and turn the US into “the world’s bitcoin superpower” by bringing more bitcoin mining into the country. He has vowed to fire Gary Gensler, the chairman of the Securities and Exchange Commission and a harsh critic of the cryptocurrency industry, on his first day in office.
Will he keep his promise? Controversial: Trump is more famous for his commitments than his policies and has a tendency to make erratic decisions. While a national bitcoin reserve is of the type proposed by Trump (while meaningless) could legitimize bitcoin as a reserve asset, and Gensler’s removal could herald a lighter regulatory regime for the industry, none of which is guaranteed. The hot talk that bitcoin price could reach $100,000 by the end of the year seems like a stretch.
Skeptics will say that Trump’s move into the cryptocurrency industry is just part of a campaign to appeal to young male voters and attract industry support and campaign donations his president. In any case, it worked. Men voted in large numbers. His efforts to attract the votes of his brothers were arguably more successful than his foray into cryptocurrency. World Free Finance (WLFI) – the cryptocurrency project backed by Trump and his sons – has so far sold just a small part of the “non-transferable digital token” it was hoping to sell.
In the end, however, Trump’s unpredictability in terms of actual policy doesn’t really matter. Only claims of great things and subsequent market volatility could underpin the cryptocurrency boom: bitcoin rose more than 1,900% during Trump’s first term as president. A sector that relies on hype and hot air has just secured its biggest boom yet.