the milestone comes hours after the president-elect promised lighter regulation for the cryptocurrency industry and announced that he would nominate digital currency advocate Paul Atkins as the next chairman of the Securities and Exchange Commission (SEC).
Bitcoin has blocked $100,000 (about 950,000 euros) as the massive rally in the worldS most popular cryptocurrency caused the the election of Donald Trump.
Bitcoin has skyrocketed to unprecedented levels since Trump won the election on November 5th.The cryptocurrency rose impressively from $69,374 (65,833 euros) on election day to $103,713 (98,386 euros) on Wednesday, according to CoinDesk. Just two years ago, bitcoin fell below $17,000 (16,131.21 euros) after the bankruptcy of the crypto exchange FTX.
How long bitcoin will stay above $100,000 is unknown.It fell again to just under $102,000 (96,789.35 euros) early Thursday.Like everything in the volatile world of cryptocurrencies,it is impossible to predict the future. And while some are optimistic about future earnings other experts continue to warn about the risks associated with the investment.
What is cryptocurrency?
Cryptocurrency has been around for a long time. In basic terms, cryptocurrency is digital money. This type of currency is designed to work over an online network without a central authority - meaning that It is usually not backed by any Government or banking institution– and transactions are recorded with a technology called blockchain.
Bitcoin is the largest and oldest cryptocurrency, although other assets such as ethereum, tether and dogecoin They also gained popularity over the years. Some investors see cryptocurrencies as a digital option to customary money, but the vast majority of everyday financial transactions are still done with fiat currencies like the dollar. Moreover, bitcoin can be very volatile and its price depends on market conditions.
Why is bitcoin rising so much?
Much of the recent activity revolves around the outcome of the US presidential election. Trump,once a cryptocurrency skeptic,promised to make America “the cryptocurrency capital of the planet” and create a “strategic reserve” of bitcoins. His campaign Donations accepted in cryptocurrency and courted his fans at a bitcoin conference in July. He also launched World Liberty Financial, a startup with members of his family to trade cryptocurrencies.
Crypto industry players have welcomed Trump’s victory, expecting it to be able to drive legislative and regulatory changes which they have been looking for for a long time and whose aim, in general, is to increase the sense of legitimacy without excessive bureaucracy.
Trump took a step in that direction on Wednesday when he said he intended to nominate paul Atkins as chairman of the Securities and Exchange Commission. Atkins was a commissioner of the SEC under President george W. bush. in the years since he left the agency, Atkins has opposed excessive market regulation.in 2017 he joined Token Alliance, a cryptocurrency advocacy organization.
Under the current chairmanship of Gary Gensler, the SEC adopted crackdown on the encryption industry sanctioning some companies for violating securities laws.But it has also faced criticism from industry players in the process, such as Robinhood’s chief legal officer, who described Gensler’s approach as “strict” and “hostile.” Gensler will resign when Trump takes office.
one ‘crypto-friendly’ move made by the SEC under Gensler was the January approval of spot bitcoin ETFs, or exchange-traded funds, which allow investors to hold an interest in bitcoin without buying it directly. Spot ETFs were the main driver of the bitcoin price before the elections but like many of the recent momentum of the cryptocurrency, they saw a record inflow after the election.
What are the risks?
History shows that you can lose money in cryptocurrencies as fast as you make it. Long-term price behavior depends on general market conditions. Trading continues around the clock, every day.
At the beginning of the COVID-19 pandemic, bitcoin stood at just over $5,000 (4,744 euros). Its price rose to almost $69,000 (65,475 euros) in November 2021, during the high demand for technology assets but it later fell during an aggressive series of rate hikes at the Federal Reserve. And the fall of FTX in late 2022 severely undermined confidence in cryptocurrencies in general, with bitcoin falling below $17,000.
Investors started back in droves when inflation began to cool and profits increased as expected and the initial success of the forts. But experts continue to caution, especially for investors with small pockets. And lighter regulation from the incoming Trump administration could mean fewer guardrails.
“I would say: Keep it simple.And don’t take more risk than you can handle,” he said. Adam Morgan McCarthy, Kaiko research analyst, adding that there is no “magic eight ball” to know for sure what is to come.
And the climate impact?
Assets like bitcoin are produced through a process called ‘mining’,which consumes a lot of energy. Operations that rely on polluting sources have raised particular concerns over the years.
Recent research published by the United Nations University and the magazine ‘Earth’s Future’ showed that the carbon footprint of bitcoin mining in 2020-2021 in 76 countries was equal to emissions from burning 84 billion pounds of coal or the operation of 190 natural gas power stations. Coal met most of bitcoin’s electricity demand (45%), followed by natural gas (21%) and hydropower (16%).
The environmental impact of bitcoin mining depends greatly on the energy source used. Industry analysts argue that the the use of clean energy has increased in recent years, coinciding with the growing demands for climate protection.
Interview between the Time.news Editor and Cryptocurrency Expert
Time.news Editor: Good day, everyone! Today, we’re thrilled to have with us Dr. emily Thompson, a leading expert in cryptocurrency trends and regulation. With Bitcoin recently surging past the $100,000 mark following Donald Trump’s election victory, there’s a lot of excitement — and concern — in the cryptocurrency space. Welcome, Dr. Thompson!
Dr. Emily Thompson: Thank you for having me! It’s great to be here and discuss such a pivotal moment for cryptocurrency.
Editor: Let’s dive right in. Bitcoin has jumped from around $69,374 on election day to over $103,713 just days later. What do you think is driving this remarkable price surge?
Dr.Thompson: The spike is certainly remarkable, and it can be attributed to a cocktail of factors. The primary catalyst here is Donald trump’s stance on cryptocurrency.His promise to ease regulations and appoint Paul Atkins, a known advocate for digital currencies, as chair of the SEC has created a wave of optimism among investors. The crypto community sees potential for more favorable conditions and clearer guidelines, which could lead to greater adoption.
Editor: That sounds like a notable shift. For many in the conventional financial sector, Bitcoin and other cryptocurrencies were viewed with skepticism. Trump himself was a skeptic in the past. Why do you think this change in outlook has occurred?
Dr. Thompson: it’s part of a broader narrative.Trump’s campaign has focused on innovation and economic empowerment, and he recognizes the growing importance of digital currencies in that landscape.Additionally, his engagement with the crypto community — including accepting campaign donations in cryptocurrency — illustrates that he is aligning himself with a powerful demographic of tech-savvy voters and investors.
Editor: With these dynamics at play, how do you see the future of Bitcoin? Can it sustain its value above $100,000, or is this just a temporary spike?
Dr. Thompson: That’s the million-dollar question, isn’t it? Bitcoin is notoriously volatile, so while there might potentially be strong momentum now, there’s no guarantee it will hold. If Trump’s administration successfully brings about legislative and regulatory support for cryptocurrencies, we could see a more stable surroundings that might support higher valuations. However, we must also consider potential market corrections, investor sentiment shifts, and global economic factors that could lead to fluctuations.
Editor: You mentioned that while there’s optimism, some experts are still warning about risks associated with cryptocurrency investments.What are some of these risks?
Dr.Thompson: Absolutely. The primary risks include its inherent volatility and the fact that it isn’t necessarily backed by any government or central authority. This means that while the potential for high returns exists, so does the possibility of rapid losses. Furthermore, with regulatory changes and the global political landscape constantly evolving, uncertainties remain. There are also security issues — exchanges can be hacked, and investors need to be cautious about storage and trading methods.
Editor: And while Bitcoin is leading the surge, we also have other cryptocurrencies like Ethereum and Dogecoin gaining traction. How do they compare, and should investors diversify?
Dr. Thompson: diversification is often a sound investment strategy,especially in the unpredictable world of cryptocurrencies. Ethereum has its unique proposition with smart contracts and its own robust ecosystem, which provides distinct use cases beyond just being a currency. Meanwhile, Dogecoin started as a meme but has developed a community of supporters. Each cryptocurrency has its own set of risks and rewards, so it’s crucial for investors to research and consider what aligns with their investment goals.
Editor: Thank you for such insightful analysis, Dr. Thompson! Before we wrap up, any final thoughts for our readers as they navigate this volatile but intriguing market?
Dr. Thompson: Absolutely! If you’re looking to invest in cryptocurrencies, approach it with both caution and curiosity. Educate yourself about the technology, the market forces at play, and remember not to invest more than you can afford to lose. The crypto world can offer exciting opportunities, but it comes with significant challenges as well.
Editor: Wise words indeed.Thank you for joining us today, Dr. thompson. This has been a captivating discussion, and we look forward to seeing how the cryptocurrency landscape evolves in the coming months.
Dr. Thompson: Thank you! It’s been a pleasure.