Bitcoin Soars Past $100,000 as Trump Promises Crypto-Friendly Policies

Bitcoin price surged past $100,000 on Friday, boosted by hopes in the cryptocurrency sector over potential early action by Donald Trump, who will become U.S. president next week.

Trump, who was once a vocal skeptic of digital currencies, has now embraced the sector, promising to make the United States a global leader in cryptocurrency innovation.

Among his campaign pledges are enacting crypto-friendly regulations, creating a U.S. strategic bitcoin reserve and appointing a crypto "czar" to spearhead these efforts.

Here's why it matters:

Bitcoin, which was created in 2009, has transformed from a niche asset into a major financial instrument. Its rise to $100,000 underscores the market's anticipation of favorable policies under Trump, who has placed crypto proponents in key regulatory roles.

This shift could mark a turning point for cryptocurrency regulation and adoption in the U.S., especially after what many in the industry considered restrictive policies under the Biden administration.

What to note:

Bitcoin surged by about 5% on Friday, reaching $104,000, data from CoinDesk showed. The cryptocurrency briefly dipped to $90,000 earlier in the week but recovered amid rising optimism over Trump's pro-crypto stance. For context, two years ago, bitcoin was trading at just $20,000, highlighting its dramatic rise.

Trump's crypto agenda includes establishing a "Strategic Bitcoin Reserve" as a national asset. Proponents are advocating for an executive order that would direct the Treasury Department to hold at least $21 billion in bitcoin, diversifying federal reserves.

While critics maintain that bitcoin's volatility renders it unsuitable as a reserve, proponents believe the move will legitimize the cryptocurrency.

A new regulatory council will also be created by Trump within his first 100 days to establish clear regulations for the industry. David Sacks, a venture capitalist, will serve as the crypto "czar," and Bo Hines will lead the Presidential Council of Advisers for Digital Assets.

Trump's pick for the Securities and Exchange Commission (SEC), Paul Atkins, is a known advocate for digital currencies. Notably, wealthy crypto proponents, who felt targeted by Biden-era enforcement, largely supported Trump's campaign.

As per Coin Center advocacy group's Peter Van Valkenburgh, a "change in tone" is expected at the SEC, contrasting with the aggressive oversight undertaken by the outgoing Chairman Gary Gensler.

People are talking:

"You're going to be very happy with me on bitcoin," Trump assured bitcoin enthusiasts last year, hinting at a shift in regulation.

"Creating a strategic bitcoin reserve will legitimize bitcoin for skeptics," said Zack Shapiro of the Bitcoin Policy Institute.

What's next?

As Trump prepares to take office, crypto advocates expect swift action on his promises, such as the creation of a strategic bitcoin reserve and pro-industry regulations.

These developments could further propel bitcoin's rise and shape the future of cryptocurrency in the U.S.

This article includes reporting from The Associated Press.