Bitcoin On The Ascent, Along With Trump

Bitcoin, the world’s largest cryptocurrency, and touched $106,495, its highest price to date, on December 16. While 2024 saw a 150-per-cent rally, the sharpest spike in value came over the last few months, coinciding with the election of Donald Trump as the President of the Unites States for a second term. The 47th president of the USA is a recent convert to the cryptocurrency bandwagon and Trump’s support is seen as a crucial factor in Bitcoin jumping by nearly 50 per cent since his victory.

Trump's victory is also seen by many as a major political shift, creating uncertainty in traditional financial markets. His governance may include protectionist trade policies, tax reforms, and unpredictable foreign policies, fuelling concerns about the future of global markets and the U.S. economy. It is during these times that investors often seek safe-haven assets, and Bitcoin, a decentralized digital currency, is seen by some as a hedge against the potential risks posed by traditional financial systems.

Change In Stance

Before becoming an ardent supporter and backer of Bitcoin, Trump was against establishing a base of cryptocurrency in the USA. During the second year of Joe Biden’s presidency, in 2021, Trump went on record calling Bitcoin a scam. In an interview with Fox Business in 2021, called crypto a "disaster waiting to happen" that "takes the edge off the dollar and the importance of the dollar", arguing that the U.S. should regulate [crypto] "very, very high".

However, his stance changed during the election period. Trump, in speeches across towns and cities, promoted the usage of crypto. At a Bitcoin conference in Nashville in July 2024, Trump said that if he returned to the White House, he would ensure the federal government never sells off its Bitcoin holdings. “For too long our government has violated the cardinal rule that every Bitcoiner knows by heart: Never sell your Bitcoin,” Trump said. Trump is joined by some key businesspersons in the USA in backing Bitcoin. Some of the key names include Tesla and SpaceX founder Elon Musk, Robert F Kennedy and Cantor Fitzgerald’s CEO Howard Lutnick.

More Changes In Progress

A few days back, Trump announced that the U.S. government will look at developing a strategic crypto reserve under which the federal government will hold a reserve of cryptocurrencies similar to what it holds in the petroleum reserve.

Earlier in December, Trump named Silicon Valley entrepreneur David Sacks as his artificial intelligence (AI) and cryptocurrency tsar. Sacks is a former PayPal executive and a close friend of Trump's adviser Musk. Trump has also said he would nominate pro-cryptocurrency Washington attorney Paul Atkins as the new head of the Securities and Exchange Commission (SEC).

Musk was one of the biggest donors in Trump's electoral battle. Musk’s support for the cryptocurrency has played a significant role in its rise, particularly through his public endorsements and involvement with the cryptocurrency. In February 2021, Tesla announced that it had purchased $1.5 billion worth of Bitcoin. This move was significant because it represented a major publicly traded company backing Bitcoin as a legitimate store of value and an investment asset. Tesla’s decision also sent a strong signal to other corporations, encouraging them to consider Bitcoin as part of their treasury management strategy. Some of the world’s largest funds and corporations, like GreyScale and BlackRock also have heavy investments in BTC.

What Next For BTC?

Kashif Raza, founder of Bitinning, an educational website about cryptocurrency, feels that an action from the U.S. government towards promoting or legalising the use of cryptocurrency and BTC in any form can have global implications. “Earlier when El Salvador said that it would consider cryptocurrency as a legal tender, the world did not react too much. But when the U.S. talks about a federal reserve of cryptocurrency, the move can have some indirect impact on the global currencies and the economy. When this reserve comes into play, we may see other major countries like Japan or Russia adopting a similar move,” Raza said.