SINGAPORE/LONDON/NEW YORK, Nov 21 (Reuters) – Bitcoin’s value is soaring, coming tantalizingly close to the $100,000 mark with $99,073 recorded during trading on Thursday, as the election of Republican Donald Trump fueled optimism for a more crypto-friendly regulatory environment in the United States.
The world’s leading cryptocurrency has more than doubled its value this year and has seen a roughly 40% increase in the two weeks since Trump’s election and the subsequent influx of pro-crypto lawmakers into Congress.
Trump’s embrace of digital assets during his campaign, where he promised to establish the U.S. as the “crypto capital of the planet” and to establish a national bitcoin stockpile, has been a significant catalyst for growth. Investors anticipate a reduction in the regulatory scrutiny that has been characteristic of the U.S. Securities and Exchange Commission under Chair Gary Gensler, whom Trump has indicated he would replace.
Furthermore, Trump’s unveiled his new crypto business, World Liberty Financial, in September. Although details are scarce, the market has interpreted his personal interest in the sector as a sign of confidence. Billionaire Elon Musk, another prominent Trump ally, is also a strong proponent of cryptocurrencies.
More than 16 years after its inception, bitcoin appears poised for widespread mainstream acceptance.
“Everyone who’s bought bitcoin at any point in history is currently in profit,” noted Alicia Kao, managing director of the crypto exchange KuCoin. “But those who bought it early, when there were significant obstacles to doing so and there was the might of the world’s financial and governmental forces intent on crushing it, are the real winners. Not because they’re rich, but because they’re right.”
Bitcoin’s recovery has been rapid since it dipped below $16,000 in late 2022. The introduction of U.S.-listed bitcoin exchange-traded funds (ETFs) in January this year was a significant boost.
Despite previous attempts by the Securities and Exchange Commission to block ETFs, citing investor protection concerns, these products have opened the doors for broader investor participation, including institutional investors.
Crypto Rush
Since the election, over $4 billion has poured into U.S.-listed bitcoin exchange-traded funds (ETFs). Earlier this week, options on BlackRock’s ETF had a robust debut, with call options, which are bets on price increases, proving more popular than put options.
“There is a persistent bid in the market,” said Joe McCann, CEO and founder of Asymmetric, a digital assets hedge fund in Miami. “$100,000 is a foregone conclusion.”
Crypto-related stocks have concurrently surged, with shares in bitcoin miner MARA Holdings seeing an increase of nearly 2.3% on Thursday.
“Once you break out to new highs, you attract a lot of new capital,” said John LaForge, head of real asset strategy at Wells Fargo Investment Institute. “It’s like gold in the 1970s, where this new high is in a price discovery mode. You don’t know how high it’s going to go,” he said.
However, the rise is not without its critics.
The industry faced significant turmoil two years ago, rocked by the collapse of the FTX crypto exchange and the subsequent jailing of its founder, Sam Bankman-Fried.
Additionally, the cryptocurrency industry has also faced criticism for its energy consumption. Miners are under scrutiny due to the potential impact of their energy-intensive operations on power grids and greenhouse gas emissions. Crypto crime remains another concern. Chainalysis’ analysis indicates that at least $24.2 billion worth of crypto was sent to illicit wallet addresses last year, including addresses that have been identified as sanctioned or linked to terrorist financing and scams.
