Bitcoin surges past $109,000 ahead of Trump’s possible early action on crypto

WASHINGTON (AP) – The price of bitcoin rose above $109,000 early Monday, just hours before President-elect Donald Trump’s inauguration, as a pumped-up cryptocurrency industry bets he will take action after returning to the White House.

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 vowed 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 will be very happy for me,” Trump told crypto enthusiasts on a bitcoin conference last summer.

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, have 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 naysayers, surviving several extended price declines in its short life. Wealthy players in the crypto industry who felt unfairly targeted by the Biden administration, used a lot 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. On Friday, it rose about 5 percent. It jumped more than $9,000 early Monday, according to CoinDesk.

Two years ago, bitcoin was trading at around $20,000.

Trump’s picks for key Cabinet and regulatory positions are filled with crypto supporters, including his picks to lead the Treasury and Commerce departments and main by the Securities and Exchange Commission.

Key players in the industry held a first “Crypto Ball” on Friday to celebrate the first “crypto president.” The event was 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 COUNCIL

As a candidate, Trump promised he would create a special advisory council to provide guidance on creating “clear” and “straightforward” regulations on 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 the tech executive and venture capitalist David Sacks to be the crypto “tsar” of the administration. 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 leave when Trump takes office, said in a recent interview with Bloomberg saying 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 ensure 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” to 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.

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

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 promise to commute Ross Ulbricht’s life sentence. convicted founder of the drug-selling site 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.