Bitcoin, the leading digital currency, has surged past the $100,000 USD
mark for the first time ever. This milestone follows a significant value
increase throughout the year, largely driven by the growing expectation,
and now realization, of Donald Trump’s return to the presidency.
The incoming president has voiced his ambition to establish the United States
as the premier hub for digital currencies, promising policy changes designed
to bolster the industry, with Bitcoin at the forefront.
In a move signaling his intentions, Trump announced his plan to nominate Paul
Atkins, a known cryptocurrency proponent, to lead the Securities and
Exchange Commission (SEC). The SEC is the regulatory body overseeing US
financial markets, similar to Australia’s ASIC.
Trump described Atkins as a “proven leader” who will implement “common-sense
regulations.”
The president-elect elaborated on his social media platform:
class="Blockquote_blockquote__YVWQm ContentAlignment_marginBottom__4H_6E ContentAlignment_overflowAuto__c1_IL" data-component="Blockquote" >“He believes in fostering vibrant and innovative capital markets that cater
to investor needs and provide the financial resources necessary for a
thriving economy. He also understands the importance of digital assets
and other innovations in making America even greater.”
On Election Day, November 4th, Bitcoin was valued at $67,077 USD.
Just four weeks later, on December 5th, its value reached $102,510 USD,
equivalent to nearly $160,000 in Australian dollars.
Bitcoin breaks through the $US100,000 mark for the first time.
‘Carnival atmosphere’ for crypto
According to Jason Titman, CEO of crypto brokerage Swyftx, this surge is
“a momentum rally.”
“Global trading volumes are exceeding levels seen during the height of the
pandemic, and the appointment of Paul Atkins as SEC chair has only added
to the celebratory mood.”
Kyle Rodda, a senior financial market analyst at Capital.com, suggests that
while Bitcoin often experiences year-end rallies, the incoming Trump
administration could prolong this upward trend.
“The conditions are ripe for digital assets,” he stated.
“Historically, these end-of-year surges have seen Bitcoin more than double
in value. For example, in 2016, 2017, and 2020, rallies of 60%, 180%, and
160% respectively occurred between mid-November and the year’s end.”
“With reduced regulatory concerns, the continued allure of assets not tied
to traditional currencies due to perceptions of US fiscal irresponsibility,
and heightened geopolitical risks, strong tailwinds remain that could
further propel prices upward.”
US Congressman Patrick McHenry, a Republican representing North Carolina and
chair of the House Financial Services Committee, believes Atkins will ensure
US markets maintain their global leadership position.
“Paul Atkins possesses the necessary expertise and experience to restore
confidence in the SEC,” he posted on X.
“I am confident that his leadership will provide clarity for the digital
asset space and guarantee that US capital markets remain the envy of the
world.”
But Europe goes the other way
In contrast, the European Union is taking a different approach to
cryptocurrency regulation.
Earlier this year, Fabio Panetta, governor of the Bank of Italy, cautioned
the Italian Banking Association about the risks posed by crypto-assets to
Europe’s financial system, emphasizing the need for careful monitoring.
He argued that unbacked crypto-assets, such as Bitcoin and Ethereum,
possess “no inherent value.”
Panetta highlighted the recent adoption by the European Union of the
Markets in Crypto Assets Regulation
(MiCA), a comprehensive regulatory framework designed to enable authorities
to effectively monitor the risks associated with crypto-assets. This
regulation is being implemented throughout the current year.
“Crypto-assets are held by entities whose primary objective is to resell
them at inflated prices, and, in some instances, to evade tax laws or
regulations intended to combat money laundering and the financing of
terrorism,” he stated.
“In many cases, these crypto-assets are essentially a form of gambling, a
speculative, high-risk contract with a value that is not grounded in
economic fundamentals.”
“Consequently, their value experiences extreme volatility.”
“It is clear that they lack the necessary characteristics to fulfill the
three core functions of money: serving as a means of payment, a store of
value, and a unit of account,” Panetta concluded.