The cryptocurrency industry is ecstatic after Donald Trump’s victory. Bitcoin at new all-time highs
The cryptocurrency industry is ecstatic after Donald Trump’s victory, and the majority in the US Congress, which can easily secure favorable legislation, makes them the perfect candidates for “reserve currency” status alongside bullion, say XTB analysts.
Cryptocurrencies are celebrating, and the reason behind the surge is clear. Donald Trump won the US presidential election, and the Republicans are close to taking control of Congress. The control of the Senate and the House of Representatives can ensure the smooth implementation of legislation favorable to the cryptocurrency industry. A positive message built around Bitcoin and the blockchain industry was an important part of Trump’s presidential campaign.
Since the victory of the Republican candidate, the price of Bitcoin has already advanced by 20%. Such a favorable turn of events for the industry surprises even the biggest optimists. It also provides room to build expectations around the next catalysts for growth, XTB analysts point out.
The cryptocurrency market loves to speculate and dream of hypothetical scenarios. And this time there are enough reasons, because the Republican initiatives indicate the desire to create a strategic Bitcoin reserve. Under these conditions, the question arises: will the US buy and “withdraw from the market” more than 1 million units of Bitcoin?
Bitcoin has gone through several periods, its price rising from a fraction of a dollar to $90,000 today. The “fanatics” claim that this increase is due to limited supply and point out that it was created to combat inflation. This, according to the Austrian School of Economics, derives largely from the actions of central banks.
In a wave of continued euphoria, the dream of a $100,000 price for BTC seems closer and closer to fulfillment. The cryptocurrency has now reached $90,000, while “at the low of the 2022 drop” investors were selling their BTC for $15,000.
This is a six-fold increase in the last two years. After a 100% price increase in 2024, the currency equaled the value of the global silver market of $1.7 trillion. US ETFs alone have amassed $25 billion worth of Bitcoin this year, making a fortune for their issuers, such as BlackRock and Fidelity.
In fact, the popularity of ETFs this year has increased. Cumulative net inflows into this type of instrument exceeded the SPDR S&P 500 ETF Trust by more than a billion dollars. The capitalization of S&P 500 companies now stands at $50 trillion, compared to Bitcoin’s $1.7 trillion valuation. In Europe, in the absence of regulations allowing the creation of spot ETFs for retail investors, Bitcoin ETN funds are the popular ones.
Currently, the size of the Bitcoin market is similar to that of silver, which has had solid gains this year. However, it is still almost 10 times less than gold. Will Bitcoin become a reserve currency alongside bullion in the future? Such a scenario still sounds abstract. However, cryptocurrencies like to surprise.
Donald Trump is building a narrative of starting a “war against the establishment” in the United States. To prove that these are not empty statements, he created an entirely new position, naming Elon Musk secretary of the Department for Government Efficiency (DOGE). Dogecoin, the cryptocurrency associated with Musk, did not take long to react. Its price has doubled since the election.
Cryptocurrencies, as assets with “anti-system” characteristics, seem to complement Trump’s overall campaign, built on criticism of existing structures. Now, investors have an open avenue to speculate on the “accelerated adoption of blockchain technology” and the strengthening of Republican influence around the digital asset industry. Today’s secondary issue is whether the popularity of cryptocurrencies in the field, beyond speculation, will really increase, draw the attention of XTB analysts.
It is well known that Trump’s victory does not please everyone on Wall Street. The president-elect even commented that financial institutions and banks have started abusing their power. Such statements coming from the US president seem surprising and send a signal to cryptocurrencies that they can count on a positive feeling from the new White House administration. Even more so when we consider that Donald Trump is trying to create his own family crypto-enterprise under the name of World Liberty Financial.
However, the cryptocurrency market today is buying a positive picture of the future, which could turn out to be a mirage. Equally, the future of industry regulation is currently unclear.
Market forecaster Kalshi estimates a 60% chance that Bitcoin will break the “magical” $100,000 mark this year. Investor optimism is on the rise, and strong capital has once again injected into smaller cryptocurrencies, following Bitcoin’s lead. The prospect of sector-friendly regulatory changes in the US may indeed be a growth catalyst for projects like Ethereum or smaller cryptocurrencies that offer real “utility”. Also evident is an explosion of interest in speculative coins known as Memecoins, XTB analysts say.
The American exchange Coinbase has already launched the price tracking index of the 50 largest projects Coin50, which is intended to be the equivalent of the S&P 500 index on the stock market.
Of course, Trump intends to reduce government spending in non-productive areas and make the administration less “dollarized”, but this does not mean that his goal will be a significant reduction of the deficit. At least not an obvious one, since the program proposed by the Republicans does not indicate that tightening the belt in the US will become a priority for the administration.
Source: www.mediafax.ro
