Bitcoin, the largest cryptocurrency, breached the US$100,000 for the first time just before 10 p.m. Eastern Time on Wednesday (Dec 5), before steadily climbed as high as US$103,852 – a new all-time high. Essentially, bitcoin’s total market capitalization now stands at US$2.03 trillion, more than every U.S. stock except for Apple, Alphabet, Nvidia, Microsoft and Amazon, thanks to one person – Donald Trump.
The token has jumped about 49% since Trump won the Oval Office. But it was not until Patomak Global Partners CEO Paul Atkins was selected by the President-elect Donald Trump to lead the Securities and Exchange Commission (SEC) that the bitcoin started skyrocketing. Investors believe Atkins, a pro-crypto former regulator, will boost the digital assets further.
Even before Atkins was picked, Trump has promised to “end Joe Biden’s war on crypto”. After defeating Kamala Harris, investors were betting that the new administration will turn U.S. government policy into an engine of growth for crypto. On Election Night, the bitcoin already hit a record of over US$75,000, as it appeared he was on the way back to the White House.
His high-profile supporters such as Elon Musk, Robert F. Kennedy, Jr. and Cantor Fitzgerald CEO Howard Lutnick have something in common – crypto currency. Trump said that if he returned to the White House, he would ensure the federal government never sells off its bitcoin holdings, including those seized from financial criminals. He has also promised to fire a top gun who was anti-crypto.
“On day one, I will fire Gary Gensler,” – Trump used to say, referencing the Joe Biden-appointed SEC chairman who has taken an aggressive approach to crypto regulation. Gensler has brought more than 100 actions against crypto firms during his tenure at the commission, arguing that digital currencies are rife with fraud and manipulation.
In June in Palm Beach, Florida, about a dozen bitcoin mining executives and experts sat down with Trump for an hour and a half in a small tea room at the Mar-a-Lago Club. After the closed-door session, Trump blasted a message – “Biden’s hatred of Bitcoin only helps China, Russia, and the Radical Communist Left. We want all the remaining Bitcoin to be MADE IN THE USA!!! It will help us be ENERGY DOMINANT!!!”
“If crypto is going to define the future, I want it to be mined, minted and made in the USA,” – Trump declared. But many of bitcoin’s early fans saw it as a way to let individuals control their financial destinies, free from the oversight of nosy banks and governments. Satoshi Nakamoto, the pseudonymous creator of bitcoin, proposed it in 2008 as a way to make payments without relying on the traditional banking system.
So, the burning question is whether Donald Trump can really control the bitcoin. It’s rather strange that crypto investors are cheering Trump’s pledge to create a strategic national reserve for the government’s bitcoin holdings, when the whole purpose of bitcoin was to create an alternative payment infrastructure outside of traditional finance and government surveillance.
Does Trump even understand how bitcoin was created – and manipulated – in the first place? Since bitcoin’s supply is limited – its algorithms impose a hard cap of 21 million coins, expected to be reached in around 2140 – the emergence of large hoards locking up available supply is bullish for bitcoin’s price. In short, it’s the limited supply of bitcoin that makes it extremely volatile.
The largest holders of bitcoin include Satoshi Nakamoto, public companies like Tesla and MicroStrategy, institutional investment products such as BlackRock, individuals known as “Bitcoin whales,” and even some governments through legal seizures and strategic purchases like the United States and El Salvador. Bitcoin itself isn’t physical assets like gold, but is software run by a decentralized network.
Satoshi Nakamoto owns the most bitcoin, with an estimated 968,452 BTC (worth about US$86.7 billion as of Nov 2024). Satoshi not only invented but was also the first miner to create blocks of transactions, hence he was rewarded with nearly one million bitcoin in cumulative block rewards for the work. MicroStrategy’s stake of 402,100 BTC, representing roughly 1.91% of the total supply, is now worth roughly US$38.4 billion.
Officials in Washington, and other governments for the matter, have long viewed crypto suspiciously and associated it with illicit activities and investment scams largely because the supply of Bitcoin isn’t controlled by politicians or policy makers. Since bitcoin has a maximum supply of 21 million coins, those with significant BTC positions have tremendous power.
The Bitcoin blockchain answers to no nation, bank, or corporation. However, Bitcoin whales can conspire and manipulate the spot price. The term “Bitcoin Whale” is used to denote a holder with a significant stake compared to smaller participants, often referred to as “smaller fish”. Whales, with access to substantial holdings, possess the power to manipulate the market by making significant asset purchases or sales that result in price fluctuations.
Interestingly, voters elected 298 pro-crypto representatives and senators in the U.S., compared with 134 who are anti-crypto. Many analysts believe hitting six figures is just the beginning, with pundits predicting that Bitcoin’s price will hit US$125,000 before the end of 2024 and US$200,000 in 2025. Some, like Bitwise, has even suggested the digital gold may soon hit US$500,000.
However, if history is any indicator, it won’t be a walk in the park for Bitcoin to sail to the US$200,000 territory, let alone US$500,000 and beyond. Besides volatility, the digital currency is driven by extreme speculation. The unpredictability of Bitcoin saw three-quarters of people who bought the token between 2015 and 2022 ended up losing money.
Bitcoin has repeatedly hit records on signs of mainstream adoption, before collapsing. In 2017, for example, it skyrocketed to nearly US$20,000 after Chicago exchanges listed futures contracts on bitcoin. In 2021, it hit a record of almost US$69,000 following the launch of exchange-traded funds (ETF) holding bitcoin futures. It then plunged 78% to less than US$16,000 after the collapse of Sam Bankman-Fried’s crypto exchange FTX in November 2022.
Unlike e-wallet, an application on an electronic device such as a smartphone that stores payment information and allows you to securely make purchases without carrying cash, Bitcoin is practically never used today as a way to make payments – the original use envisioned by Nakamoto. Instead, Bitcoin becomes a form of “digital gold,” a way to store monetary value and hedge against inflation.
Crypto currency, which is 16 years old, isn’t some physical assets or hostile countries like China or Russia that Trump could slap sanctions whenever he likes to (hopefully) gain control. The real reason Trump is crypto-friendly is to make money. Trump Media and Technology Group, which operates Truth Social, are reportedly close to acquiring crypto trading firm Bakkt.
In September, the Trump family launched its own crypto firm, World Liberty Financial. The cryptocurrency industry threw its weight behind Trump and the Republican Party during this 2024 Presidential Election, with leading super PACs donating around US$131 million. So, it doesn’t matter that Trump, once a crypto skeptic, took a 180-turn. What is important is he and crypto supporters make money.
Other Articles That May Interest You …
- Trump Threatens 25% Tariff On Mexico & Canada, Extra 10% On China – But It’s About Something Else, Not Trade War
- It’s The Economy And Border, Stupid – Here’s How Donald Trump Crushes Kamala Harris To Become 47th President
- Terrified Of Trump Return – U.S. Allies Started Sucking Up To China Again With More Western Leaders Visiting Beijing
- Putin Gets The Last Laugh – Germany Enters Recession After Europe Powerhouse Screwed Its Own Economic Engine
- Despite Trade War And Anti-Chinese Rhetoric, China Wants President Trump To Get Reelected In 2020 – Here’s Why
- From Terminating Trade Deal To Cancelling $1.1 Trillion Debt Owed To China – Here’re Some Of Trump’s Crazy & Dirty Ideas
- US-China Trade War Gets Worse – These Maps Show The U.S. States To Be Hit The Most
- China Strikes Back!! – Trade War Becomes Currency War After Suspends U.S. Agricultural Goods & Devalues Currency
- “Best Friend” Russia To Fill China’s Food Gap As Trade War Forces The Boycott Of U.S. Meat & Soybeans
- Huawei Strikes Back – U.S. Fears Of Being Left Behind, Fails To Hack Into Huawei To Spy
- The Enemy Of My Enemy Is My Friend – China Plans To Gang Up With U.S. Allies Against Trump’s Trade War
|
|
December 5th, 2024 by financetwitter
|
|
|
|
|
|
|
Comments
Add your comment now.
Leave a Reply