Donald Trump writes on his social media and the market moves. This time, making history. The next occupant of the White House – he will return to the Oval office on January 6 - only needed to announce two appointments to push bitcoin above 100 thousand dollars: the businessman and defender of digital currencies Paul Atkins will be the next president of the Commission on Securities and La Exchange commission (SEC) and Silicon Valley investor David Sacks,the “the czar of cryptocurrencies and artificial intelligence”. Together, they will seek to provide the push cryptoassets need to institutionalize both in the United States and around the world.
Bitcoin, a reference for the sector, accumulates a 44% increase as of the closing date of this article since the Republican victory in the presidential elections on November 5.At a general level,cryptocurrencies have a capitalization of over 3.8 trillion dollars, equal to the value of Apple or almost three times the GDP of Spain. And if the forecasts are respected, this will continue in the coming years thanks to the new Governance.
Lights and shadows
Some investors are looking to the future with optimism. “If we talk about In 2025, it looks very positive that this increase may just be the beginningand if we’re talking 10 years from now, the million dollar bitcoin is something totally logical,” says Bit2Me’s director of institutional education, Javier Pastor.
However, the rise in value of bitcoin comes with some risks. One of Trump’s many promises during his election campaign was to announce the creation of a national bitcoin reserve. “Buying large amounts of bitcoin from the US government would increase demand, which would increase its price and reduce volatility,” says iBroker analyst Antonio Castelo.
The idea is one of lime and another of sand. The high volatility of bitcoin, with fluctuations of up to 20% in a few daysit could generate instability in national reserves if it is indeed finally implemented. Conversely, being a vicious circle, government support for this digital currency would increase its legitimacy and position it as a more attractive investment for institutional investors.
The Republican has promised to create a national store of value for bitcoin
Security is also a problem for cryptocurrencies because they are vulnerable to hacker attacks and theft, “which would make it tough to secure large amounts of bitcoin”Castelo says. At the same time, its adoption could have a negative impact on confidence in the dollar “if the government is perceived to be diversifying its reserves in the face of a possible devaluation of the dollar”, he adds.
The current year will be remembered by investors for having put bitcoin and ethereum exchange traded funds into operation in cash, for the growing acceptance by countries of the use of digital currencies and for the interest of banks, including Spanish ones, to join the cryptocurrency fever. No wonder the market is predicting a more than positive future with Trump at the head of the world’s leading power, even if his policies may not turn out to be as positive.
Favorable regulation
The market trusts in Atkins’ work. The businessman was speedy to unveil looser regulation that will benefit both cryptocurrencies and financial and technology companies thanks to his focus on reducing fines and penalties against companies.The plans of Sacks, former chief operating officer of paypal, are still unknown.
“Changes in the leadership of regulatory agencies will lead to more favorable environments for developers and financial institutions to offer more cryptocurrency products and services to the market,” predicts the head of Chainalysis in Spain and Portugal, Christian Menda.
In any case, assures Menda, “What really determines the long-term price is the utility of cryptocurrencies for consumers and market adoption.” Because, while we’re always talking about bitcoin, the truth is that other digital currencies that serve as alternatives to the reference currency, known as altcoins, are already benefiting from the craze that has experienced last month.“Bitcoin’s share of total cryptocurrency market capitalization, a metric known as bitcoin dominance, began to decline after that rise to 60% at the beginning of November”explains Kraken’s head of strategy, Thomas perfumo.
for now, both industry and government are aligned. The future of cryptocurrencies is in the hands of Trump and the new members of his executive.
What regulatory changes can we expect with the new SEC leadership under Paul Atkins and David Sacks?
interview with Blockchain Expert and Economist, Dr. Jane Smith
Time.news Editor: Welcome,Dr.Smith! It’s a pleasure to have you with us today to discuss the recent developments in the cryptocurrency landscape, particularly in light of Donald Trump’s recent announcements and their impact on Bitcoin prices. Let’s dive right in. With the announcement of Paul Atkins as the next head of the SEC and David Sacks playing a important role, how do you anticipate these appointments will shape the regulatory landscape for cryptocurrencies?
Dr. Jane Smith: Thank you for having me! The appointments of Atkins and Sacks mark a crucial turning point for cryptocurrencies in the U.S. Both have a strong background in promoting digital currencies, which indicates a regulatory environment that may be more favorable toward innovation. I believe this will lead to clearer guidelines and frameworks which could encourage institutional investment, ultimately providing legitimacy to the crypto market.
Time.news Editor: Certainly! Bitcoin has recently soared above $100,000. What do you think are the primary factors driving this surge post-republican victory?
Dr. Jane Smith: The Republican victory has sent waves of optimism through the financial markets, especially in the cryptocurrency sector. The expectation of a supportive regulatory framework under leadership that is pro-cryptocurrency is crucial. Additionally, increasing institutional adoption and a growing number of companies integrating bitcoin into their balance sheets cannot be overlooked.
Time.news Editor: Those are very insightful points. Given that Bitcoin has already seen a 44% increase since the elections, do you think this growth trajectory is lasting? What factors could either bolster or hinder its rise in the coming years?
Dr. Jane Smith: Sustainability will largely depend on a few factors: Firstly, the implementation of regulatory frameworks—if they are clear and supportive, we could see an influx of institutional investors, which typically stabilizes markets. Secondly, global economic conditions will play a pivotal role. For instance, if inflation continues to rise, we might see more investors turning to Bitcoin as a hedge. Conversely, any negative regulatory news or technological setbacks could hinder this growth and create volatility.
Time.news Editor: You mentioned the term “million-dollar bitcoin” when looking towards the future.How realistic do you believe these forecasts are?
Dr. jane Smith: While a million-dollar Bitcoin might seem far-fetched right now, the rapid evolution of technology and financial systems suggests that it’s not entirely out of the realm of possibility in the long-term. If cryptocurrencies become a standard asset class and continue to penetrate conventional finance, we could certainly see staggering valuations. However, reaching that threshold will depend on factors like mainstream adoption, technological advancements, and economic trends.
Time.news Editor: It seems that optimism lingers within the investor community about the future of cryptocurrencies. As we wrap up, what would be your advice for novice investors looking to enter this space amidst such rapidly changing dynamics?
Dr. Jane Smith: My advice would be twofold: Do thorough research and remain cautious. Understand what you’re investing in and don’t put in more than you can afford to lose. The cryptocurrency market has high potential, but it’s also highly volatile. Awareness of market trends,staying updated on regulatory changes,and recognizing the legitimacy of the projects you’re interested in are all crucial steps to navigate this landscape successfully.
Time.news editor: Thank you, Dr. Smith, for sharing your insights today! It’s clear that the future of cryptocurrencies is as uncertain as it is indeed promising, and it will be exciting to watch how these developments unfold in the coming years.
Dr. Jane Smith: Thank you! I’m glad to be part of this significant conversation.