Bitcoin surges past $100,000 ahead of Trump’s possible early action on cryptocurrency

WASHINGTON (AP) – The price of bitcoin topped $100,000 again early Friday as a pumped-up cryptocurrency industry expects early action from Donald Trump when he is sworn in as president next week.

Once a skeptic who said a few years ago that bitcoin “seems like a scam,” Trump has embraced digital currencies with the zeal of a convert. He has launched a new cryptocurrency venture and promised on the campaign trail to take steps early in his presidency to make the US the “crypto capital” of the world.

His promises including the creation of a US crypto repository, the introduction of industry-friendly regulation and the event appointing a crypto “czar” to its administration.

“You’re going to be very happy for me,” Trump told crypto enthusiasts at a bitcoin conference last summer.

READ MORE: What another Trump administration could mean for crypto

Bitcoin is the world’s most popular cryptocurrency and was created in 2009 as a kind of electronic cash uncontrolled by banks or governments. It and newer forms of cryptocurrencies have moved from the financial fringes to the mainstream in wild fits and starts.

The highly volatile nature of cryptocurrencies, as well as their use by criminals, fraudsters and rogue states, has attracted plenty of critics who say the digital currencies have limited utility and are often nothing more than Ponzi schemes.

But crypto has so far defied the naysayers, surviving several extended price declines in its short life. Wealthy players in the crypto industry, who felt unfairly targeted by the Biden administration, spent heavily to help Trump win the election last November. Bitcoin has surged in price since Trump’s victory, topping $100,000 for the first time last month before briefly falling to around $90,000 earlier this week. Two years ago, bitcoin was trading at around $20,000.

On Friday, bitcoin rose about 5 percent to about $104,000, according to CoinDesk.

Trump’s picks for key cabinet and regulatory positions are filled with crypto supporters, including his picks to lead the Treasury and Commerce departments as well as the head of the Securities and Exchange Commission.

Key players in the industry throw a first-ever “Crypto Ball” on Friday night, which on its website promised to include “an elite lineup of musical entertainment” to celebrate the first “crypto president.” The event is sold out and tickets cost several thousand dollars.

Here’s a look at some detailed actions Trump could take in the early days of his administration:

Crypto Board

As a candidate, Trump promised that he would create a special advisory council tasked with providing guidance on creating “clear” and “straightforward” rules around crypto within the first 100 days of his presidency.

Details of the council and its membership remain unclear, but after winning the election in November, Trump appointed technology executive and venture capitalist David Sacks to be the administration’s crypto “czar.” Trump also announced in late December that former North Carolina congressional candidate Bo Hines will be the executive director of the “Presidential Council of Advisers for Digital Assets.”

At last year’s bitcoin conference, Trump told crypto supporters that new regulations “will be written by people who love your industry, not hate your industry.” Trump’s pick to head the SEC, Paul Atkins, has been a strong proponent of cryptocurrencies.

Crypto investors and companies chafed at what they said was a hostile Biden administration that went overboard with unfair enforcement actions and accounting policies that have stifled innovation in the industry — particularly at the hands of outgoing SEC Chairman Gary Gensler.

“As far as the general expectations from the Trump administration, I think one of the best things to bet on is a change in tone at the SEC,” said Peter Van Valkenburgh, the executive director of the advocacy group Coin Center.

Gensler, who is set to step down when Trump takes office, said in a recent interview with Bloomberg that he is proud of his office’s actions to oversee the crypto industry, which he said is “full of bad actors.”

Strategic Bitcoin Reserve

Trump also promised that as president he will make sure that the US government stores bitcoin, just as it already does with gold. At the bitcoin conference earlier this summer, Trump said the US government would keep, rather than auction off, the billions of dollars in bitcoin it has seized through law enforcement actions.

Crypto advocates have posted a draft executive order online that would establish a “Strategic Bitcoin Reserve” as a “permanent national asset” that would be managed by the Treasury Department through its Exchange Stabilization Fund. The draft order calls for the Treasury Department to eventually hold at least $21 billion in bitcoin.

READ MORE: Cryptocurrency advocate Paul Atkins is Trump’s nominee to chair the Securities and Exchange Commission

Republican Sen. Cynthia Lummis of Wyoming has previously proposed legislation mandating the US government to store bitcoin, which proponents said would help diversify government holdings and hedge financial risks. Critics say bitcoin’s volatility makes it a poor reserve.

Creating such a repository would also be a “giant step toward bitcoin being normalized, being legitimized in the eyes of people who don’t yet see it as legitimate,” said Zack Shapiro, a lawyer who heads policy at Bitcoin Policy Institute.

Ross Ulbricht

At the bitcoin conference earlier this year, Trump received loud cheers when he repeated a pledge to commute the life sentence of Ross Ulbricht, the convicted founder of the drug-selling website Silk Road, which used crypto for payments.

Ulbricht’s case has energized some crypto advocates and libertarian activists who believe government investigators have overstated their case against Silk Road.