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Bitcoin Surges Past $100,000 Amid Trump's Pro-Crypto Stance
Bitcoin reached an unprecedented milestone late Wednesday, breaking above $100,000 for the first time, fueled by investors anticipating that President-elect Donald Trump's administration will foster cryptocurrency growth through favorable government policies.
The leading cryptocurrency has experienced a remarkable ascent since Election Day, climbing over 40% in just four weeks and continually setting new records. The price surged to $103,853 following Trump's nomination of Paul Atkins, known for his crypto-friendly stance, to head the Securities and Exchange Commission. This comes after Trump reversed his previous crypto skepticism during the campaign, pledging to "end Joe Biden's war on crypto."
The cryptocurrency industry has warmly embraced the incoming administration—marking a significant shift from its origins as a cypherpunk movement opposing establishment institutions. Crypto has evolved from an outsider position to wielding considerable influence in Washington, creating a new generation of digital-currency billionaires and expanding the asset class beyond $3 trillion in value.
"I find it very ironic," noted Tim Swanson, who leads market intelligence at Clearmatics, a London-based blockchain firm. "The whole purpose of bitcoin was to create an alternative payment infrastructure outside of traditional finance and government surveillance. Now some bitcoiners are looking to embrace governments, or even get subsidies."
Bitcoin's creator, the mysterious Satoshi Nakamoto, introduced it in 2008 as an alternative to traditional banking systems. Early adopters, many of whom were libertarians, viewed it as a tool for financial independence from bank and government oversight.
Trump's proposed policies include establishing a strategic national bitcoin reserve—a move that could drive prices higher by reducing available supply. He has also committed to reducing regulatory constraints on the crypto industry. Gary Gensler, the current SEC Chair who has criticized digital currencies as prone to fraud, plans to step down on Inauguration Day, following Trump's campaign promise to remove him.
Several governments, including Bhutan and El Salvador, have accumulated significant bitcoin holdings, as have major corporations like MicroStrategy and Tesla. Given bitcoin's fixed supply cap of 21 million coins (expected to be reached around 2140), large-scale accumulation of available coins tends to drive up prices.
The shift in Washington's stance is notable, as government officials have historically viewed cryptocurrency with suspicion, often linking it to illegal activities and investment fraud.
The crypto industry's extensive campaign funding efforts have improved its legislative prospects, supporting friendly candidates and opposing critics. This strategy helped defeat lawmakers perceived as hostile to crypto, including Sen. Sherrod Brown (D., Ohio). According to Stand With Crypto, a Coinbase-backed advocacy group, voters elected 298 pro-crypto legislators compared to 134 anti-crypto representatives.
While bitcoin has deviated from its original purpose as a payment system, supporters now promote it as "digital gold"—a store of value and inflation hedge.
However, bitcoin's price stability remains uncertain given its history of volatility. Previous record highs, sparked by signs of mainstream adoption, have been followed by significant crashes. In 2017, bitcoin approached $20,000 after Chicago exchanges introduced bitcoin futures. In 2021, it peaked near $69,000 following the launch of bitcoin futures ETFs, before plunging 78% to under $16,000 after FTX's collapse in November 2022.
Bitcoin's latest surge to record territory in March coincided with the introduction of "spot" ETFs holding actual bitcoin. These funds have attracted over $7 billion in investments since Election Day, according to Morningstar Direct, contributing to bitcoin's upward momentum.
The rise of ETF-based bitcoin investment represents another departure from crypto's roots. Early users managed their bitcoin through cryptographic keys, while later adopters used exchanges like Coinbase, prompting purists to warn "not your keys, not your coins." Today's spot bitcoin ETFs effectively delegate custody to Wall Street firms, trading direct control for the convenience of traditional brokerage accounts.
"People will tend to follow the path of least resistance and greatest familiarity to investing in and holding bitcoin, which means utilizing these traditional vehicles," explained Josiah Hernandez, founder and CEO of Satoshi Capital Advisors. "At the end of the day, it doesn't have a significant negative effect on the underlying investment thesis of bitcoin for most people...that bitcoin is digital gold."
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