Bitcoin surpassed US$100,000 for the first time, boosted by “Trump Pump” optimism over the president-elect’s crypto-friendly policies.

The largest cryptocurrency by market capitalization rose to $102,510 on December 5, marking a 45% rise since President Trump’s election victory in early November. It currently trades for around $99,000.

President Trump’s support for virtual currency

In July 2024, during the Bitcoin 2024 conference in Nashville, Tennessee, President Trump pledged to make the United States the “crypto capital of the planet.” In return, he received significant financial support from crypto industry players.

Elon Musk’s attitude towards cryptocurrencies is generally one of enthusiasm for its potential. He has defended certain coins such as Bitcoin and Dogecoin. In early 2021, Tesla purchased US$1.5 billion in Bitcoin and temporarily accepted it as payment for its vehicles. However, Bitcoin payments were stopped shortly thereafter.

President Trump recently announced plans to nominate crypto advocate Paul Atkins to head the Securities and Exchange Commission. President Trump praised Atkins as a “proven leader of common sense regulation.”

“Digital assets and other innovations are essential to making America greater than ever,” President Trump declared on his social media platforms.

“Carnival atmosphere”

Jason Titman, CEO of crypto brokerage firm Swyftx, noted that global trading volumes have exceeded mid-pandemic levels. “Paul Atkins’ appointment as SEC chairman has added to the carnival atmosphere,” he told Bloomberg.

Bitcoin’s historic rally also benefited from year-end trends. Kyle Rodda, senior analyst at Capital.com, highlighted Bitcoin’s past year-end bull runs and suggested that the current rally could widen further under the next administration.

critic

Warren Buffett called Bitcoin a “gambling token.” ”[Bitcoin] It’s not worth anything, but that doesn’t stop people from wanting to play roulette. ”

Bill Gates commented that cryptocurrencies are “100%” based on the Greater Fool Theory.

Critics warn of environmental concerns due to energy-intensive mining and regulatory risks. In 2021, China declared all crypto transactions illegal.

The inherent volatility of an asset is also something investors need to be prepared for. On March 12, 2020, the price of Bitcoin fell nearly 40% in one day due to the impact of the new coronavirus infection (COVID-19). In June 2017, Ethereum briefly fell from USD 319 to USD 0.10 within seconds on GDAX (now Coinbase Pro) due to a large sell order followed by a cascading stop-loss order.

regulation

Bitcoin’s rise above US$100,000 is seen as a milestone towards mainstream acceptance. Cryptocurrencies have experienced many crashes and “cryptocurrency winters.”

Australia’s stance on cryptocurrencies is evolving, with regulators working to balance innovation with investor protection. The Australian Securities and Investments Commission is increasing oversight and proposing licensing requirements for virtual currency exchanges and companies promoting digital assets. This could include treating stablecoins and certain tokens as financial instruments, requiring compliance with strict regulatory standards.

In contrast to the United States, which is moving towards crypto-friendly regulations, Europe is taking a cautious stance. The European Union’s recently introduced Cryptoassets Market Regulation (MiCA) aims to reduce risks associated with cryptocurrencies. Fabio Panetta, head of Italy’s central bank, criticized cryptoassets like Bitcoin, saying they are speculative, unstable and “have no intrinsic value.”