Trump and the Bitcoin boom: ‘The fox is in the hen house - and promoting this stuff’
Donald Trump has claimed responsibility for Bitcoin hitting a value of $100,000 for the first time, following a 40% rise since he won the US election – and the central banks are running scared.
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In brief
- Trump previously called cryptocurrency a scam, but said “you’re welcome” when Bitcoin hit a new high, driven by his own election success.
- The News Agents say its huge rise is due to expectation that his second presidency will be very supportive to crypto, due to appointments to his top team.
- There are concerns over crypto regulation from big banks, but advocates say this is precisely why it should be more widely embraced.
What’s the story?
In 2021, Donald Trump was calling cryptocurrency a “scam”. Today, the president-elect has taken credit for doubling the value of Bitcoin.
“You’re welcome,” he wrote on his social media network Truth Social, reacting to the news that one Bitcoin is now worth $100,000. It has risen by 40% since the results of the November election.
It is the first time the currency has hit such a high.
During Trump’s successful campaign for a second term in office, he accused the Democratic Party of waging an “un-American crypto crackdown”, and promised to defend the rights of US citizens to own cryptocurrency, and keep “government surveillance and control” out of transactions.
Lewis Goodall describes the rise in the value of Bitcoin as "eye watering”, and believes the entire story is "umbilically connected" to Trump.
“The rise is all predicated on the idea that Donald Trump and his administration is going to be a very favourable one to the crypto world, a much lighter-touch regulation,” says Emily Maitlis.
Trump and crypto
All signs suggest a “lighter-touch regulation” will very much be the case in Trump’s new administration.
After all, the advisory board co-chaired by Elon Musk, the Department of Government Efficiency, is named after the Tesla billionaire’s own personal favourite cryptocurrency, DOGE.
Trump has recently appointed Paul Atkins, co-chair of a cryptocurrency lobbying group, as Chair of the U.S. Securities and Exchange Commission.
But while many of Trump’s appointments have been widely criticised, Emily describes Atkins new role as “one of the cleverer moves” the 78-year-old has made since his election win.
“Atkins is somebody who is part of the regulatory establishment, the framework, somebody who knows how regulation works. But he is also invested emotionally in making Bitcoin a more secure, friendly alternative.”
But convincing bodies – and users – of traditional finance systems of the benefits could be something of a battle.
Traditional finance versus crypto
Lewis says governments and central banks have, before now, been “sniffy and skeptical” about Bitcoin, and cryptocurrency more generally.
“That’s because they're not controlled or regulated like normal currencies are by states or central banks,” he says.
“This is why the libertarian-minded people around Trump and in the MAGA movement – Elon Musk in particular – love it, because it speaks to their view of the world.
“It speaks to their idea that states are nefarious, that they're dodgy, that they manipulate currencies, and that we should be trying to move away from that.”
Emily describes it as "the virtual equivalent of being able to keep your own box under the bed."
Jon Sopel says the fears of central banks is that crypto can be a bubble “that just bursts, suddenly, for no reason”.
“People of a more conservative bent feel unbelievably fearful about what this could do to the US economy, the British economy and everything else,” he says.
But these fears are precisely the reasons why crypto advocates want its use to become more mainstream.
“They would say it's a purer form of currency for precisely the reason that states can't control it,” adds Lewis.
“The Bank of England can print more Sterling. The Federal Reserve can print more dollars.
“They would say, because there is literally a set number of Bitcoin at any given time, that it isn't controlled by the state.”
But that's also where the problem comes in – as Lewis says Bitcoin has been “connected to illicit activity” such as money laundering and tax evasion, precisely because it isn’t subject to state or government regulation.
“It's an interesting parable for the wider stuff around the Trump presidency, because this has been the currency of choice for insurgents,” Lewis says.
“And now the foxes are in the hen house. They're in control, and they are going to actively promote this stuff.”