Bitcoin gains as Trump Plan
Bitcoin surged on Friday, rejoining the broader crypto rally amid reports that President-elect Donald Trump could prioritize cryptocurrency as a key focus of his administration. This move, potentially signaled by an executive order as early as day one of his term, is stirring excitement across the crypto market.
The flagship cryptocurrency, Bitcoin, saw a significant price increase, climbing over 4% to trade at $104,780.10, as per Coin Metrics data. This rally is part of a broader market upswing, with the Coin Desk 20 index, a benchmark for the broader crypto market, rising by an additional 2% following a 4% increase on Thursday.
Key players in the cryptocurrency exchange sector also benefited from the renewed interest. Shares of Coinbase and Robinhood, two major trading platforms, advanced approximately 5% and 4%, respectively. This uptick is attributed to the heightened trading activity in small-cap cryptocurrencies, which are known for their higher risk and potential rewards. Litecoin, for instance, saw a dramatic 27% surge over the past two days, reflecting the growing appetite for these smaller, more volatile assets ahead of Trump’s inauguration.
The bullish sentiment in the crypto market is fueled by a Bloomberg report from late Thursday, which suggested that Trump might create a crypto advisory council. This council, previously promised during his campaign, would provide the cryptocurrency industry with a direct line of communication to the administration. The New York Times further reported discussions about an executive order that could cover multiple aspects of cryptocurrency policy, including the possibility of establishing a national bitcoin stockpile.
Bitcoin’s recent performance, trading at $104,095.73 at the latest check, represents a 3.59% increase, signaling a strong market response to these developments. The anticipation of favorable regulatory policies under the new administration is a significant driver behind this surge.
The prospect of a pro-crypto Congress and White House in 2025 has already excited investors and industry stakeholders, although Wall Street analysts caution that the tangible benefits of such a political shift might take time to manifest. The general expectation is that while the supportive stance of the incoming administration could accelerate innovation in the crypto sector, the market may not feel the immediate impact.
The sentiment around smaller cryptocurrencies is particularly optimistic. These projects, often more vulnerable to regulatory scrutiny, could benefit immensely from clearer and more supportive policies. Under the previous administration, many of these smaller coins faced challenges such as SEC lawsuits and alleged banking discrimination. A shift towards a more accommodating regulatory environment could thus unlock significant potential for growth in these areas.
Bitcoin, however, remains a focal point for many investors. There is speculation that a government-held bitcoin reserve could catalyze a rapid price increase, potentially propelling the cryptocurrency to unprecedented heights. This notion of a national bitcoin stockpile is part of the broader discussions surrounding the expected executive order.
Moreover, Bitcoin’s recent performance has been closely aligned with stock market trends, reflecting a period of consolidation since late December. This phase coincided with Federal Reserve Chair Jerome Powell’s inflation warnings, which have since been alleviated by two favorable December inflation reports. Consequently, Bitcoin ETFs have experienced substantial inflows, surpassing $1 billion over the past two days, indicating strong investor confidence.
Investors are now eagerly awaiting announcements from the Trump administration, expecting any new policies or executive orders to drive Bitcoin prices even higher, potentially reaching new record levels.
In summary, the crypto market is abuzz with anticipation as Trump’s inauguration nears. The potential for executive actions and the creation of a crypto advisory council are seen as pivotal developments that could reshape the landscape of cryptocurrency regulation and innovation. While immediate impacts might be limited, the long-term outlook for the crypto industry appears increasingly optimistic under the new administration.
