In a recent development, former US President Donald Trump has brought cryptocurrencies to a new stage as he returns to the White House. Bitcoin has exhibited an uncommon upward trend in the past two months, with Trump’s newly issued personal cryptocurrency experiencing a frenzy, providing a significant momentum to the cryptocurrency market.
Monday (January 20th) marked the inauguration ceremony of President Trump. There were two major highlights in the cryptocurrency market on that day. Firstly, the leading cryptocurrency Bitcoin continued its strong growth, rising by $2,885.86, approximately 2.75%, to reach $107,479 per coin. Bitcoin has seen an increase of over 10% this month.
Since Trump won the presidential election in November last year, investors’ optimism about the future of Bitcoin has significantly surged, leading to a continuous surge in Bitcoin prices, breaking the historical record of surpassing $100,000 per coin for the first time last month.
Trump expressed great excitement about this development, posting on his own platform “Truth Social,” saying, “Congratulations to all Bitcoin holders! One hundred thousand dollars! Let’s make America great again together!”
According to AFP, Trump has appointed Paul Atkins, who supports cryptocurrencies, as the head of the U.S. Securities and Exchange Commission, further boosting market optimism. They expect the Trump administration to advocate for a “deregulation” approach, providing a more favorable environment for the development of cryptocurrencies.
Another highlight is the continuous surge of the personal cryptocurrency “meme coin” introduced by Trump last Friday. Reuters reported that the “Trump Coin,” initially priced at only 18 cents, had risen to $10 by Saturday morning, jumping to $74.59 on Monday, with a market value exceeding $10 billion.
Investors’ optimistic views stem from two main reasons – Trump’s favorable stance on Bitcoin and the strengthened lobbying power within state governments and legislatures. AP reported that these factors will encourage states to be more open to cryptocurrencies and guide public pension funds and treasuries to invest in cryptocurrencies.
Quoting London-based financial technology analyst Boaz Sobrado, USA Today noted that “Trump Coin” has taken the cryptocurrency world by storm and could potentially challenge Dogecoin’s dominant position in the meme coin ecosystem.
Advocates for cryptocurrencies believe that one significant benefit is that cryptocurrencies can serve as a hedge against inflation, similar to gold.
Citing Peter Schiff, Chief Economist and Global Strategist at European Pacific Asset Management Company, Reuters mentioned that the soaring value of “Trump Coin” reflects a new form of digital gold.
Trump claims to be a “cryptocurrency president” and is expected to issue executive orders to reduce regulatory restrictions on cryptocurrencies once in office, promoting widespread adoption of digital assets.
However, many remain skeptical about the accelerated development of cryptocurrencies. There are concerns about the high risks associated with such commodities.
Market analyst Grzegorz Drozdz of the London-based global financial technology company Conotoxia told Reuters, “Meme cryptocurrencies like this are prone to significant fluctuations, and we typically view them as speculative assets.”
Critics argue that cryptocurrency investments are highly speculative, with many uncertainties regarding future returns. They caution investors to be prepared for potential losses.
According to AP, many Bitcoin enthusiasts and investors believe that government-supported currencies are prone to devaluation. Increased government purchases of such currencies could dampen future price volatility, granting these currencies greater legitimacy and accelerating their price increase.