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One of the main trading platforms collapsed, and its founder ended up being sent to jail. Two years ago, in the wake of the failure of the FTX, it looked as if Bitcoin had finally been exposed as a flimsy bubble, with the price plunging to just $16,000 in the middle of November 2022. And yet, it turns out that the critics of the digital currency, as so often, had celebrated its demise too soon. This week, Bitcoin hit $97,000 per unit, a fresh all time high. And in reality it will go higher still — because the Trump Bitcoin trade has only just started.
Trump is nothing if not a deal-maker, and he is always willing to help his friends
It is not hard to understand why crypto currencies are soaring in price all over again. Bitcoin had already had a strong year, but the re-election of Donald Trump to the presidency has switched the afterburners on. Trump may have been skeptic last time he was in the White House, but this time around the crypto tycoons, led by Elon Musk, were among his main backers, contributing huge sums of money to his campaign.
Trump is nothing if not a deal-maker, and he is always willing to help his friends. The crypto barons are likely to be well rewarded for their efforts. His transition team is already talking about creating a White House post dedicated to creating a digital asset strategy for the United States. Regulations on buying and selling the currency, especially for small investors, may well be loosened, and we could even see some kind of formal role for Bitcoin within the American monetary system, such as setting up a strategic digital currency stockpile — a kind of virtual Fort Knox — alongside a more supportive legal framework. Add it all up, and one point is clear. Bitcoin will move a lot closer to being an official asset.
How far can it now go? There is already plenty of speculation Bitcoin will punch through the $100,000 barrier some time over the next few days, and that will inevitably give it a whole fresh boost. Once an asset gains this much momentum it is typically self-perpetuating.
Of course, there are plenty of risks as well. The rally may well over-run. Bitcoin is an incredibly volatile asset, subject to huge swings in price. At some point, it will inevitably crash once again. And yet, the important point is surely this: after each collapse, it comes back again. With President Trump now backing it, it will be stronger than ever — and the bull run still has a lot further to run.
This article was originally published on The Spectator’s UK website.
