Bitcoin Surges 84% This Year Amid Political Changes and Support
Bitcoin's value
BTC
$87,293
24h volatility:
10.1%
Market cap:
$1.72 T
Vol. 24h:
$111.82 B
and political influence are rising. An 84% growth this year has driven the cryptocurrency to the $82,000 mark, influenced by Donald Trump’s presidential win and recent Republican electoral successes, according to a report by The New York Digital Investment Group (NYDIG).
“It is now becoming a political imperative,” said Cipolaro.
Greg Cipolaro, NYDIG’s global head of research, notes that while some investors have begun allocating to Bitcoin, most still lack exposure. He stated, “No more excuses.” Cipolaro emphasized Bitcoin's increasing political relevance and warned that neglecting it could become a financial mistake.
Political shifts suggest potential changes, with expectations for relaxed regulations affecting cryptocurrency companies. By 2025, new leaders will assume roles at major federal agencies such as the SEC, OCC, FDIC, and Treasury Department, potentially leading to pro-crypto policies.
Pro-Crypto Legislation on the Horizon
The recent election outcomes provide the crypto community an opportunity to influence government decision-making. With Republicans in control of the White House and Congress, there is optimism for broader acceptance of cryptocurrencies and blockchain technologies. However, specifics of upcoming legislation depend on priorities of new appointees.
For nearly eight years, the crypto sector has sought regulatory clarity through various initiatives, including meetings and lawsuits. Political action committees dedicated to crypto have invested around $135 million in campaign donations to support candidates sympathetic to the industry, aiming to shape US policy favorably toward digital assets.
As Republicans lead key federal agencies, the crypto community anticipates a more favorable regulatory environment. The SEC, OCC, and FDIC are expected to adopt a more crypto-friendly stance, potentially easing restrictions and facilitating digital asset integration into traditional finance.
Strategic Moves in Crypto Regulation
Senator Cynthia Lummis has introduced the BITCOIN Act, proposing a Bitcoin reserve for the United States. This reserve would allow the government to hold Bitcoin as a safeguard against economic volatility, enhancing national economic security. The proposal includes acquiring 1 million Bitcoins, potentially representing 5% of Bitcoin's total supply, valued at about $76 billion at current rates.
Donald Trump supports this concept but suggests converting 204,000 Bitcoins held by the US through law enforcement actions into a strategic reserve. Legal complications may arise since many of these Bitcoins belong to identifiable victims, such as Bitfinex, linked to Tether.
A shift in regulatory leadership may also impact how the SEC addresses major crypto industry lawsuits. Agencies might become more amenable to settlements or even drop ongoing lawsuits against companies like Ripple Labs, Coinbase, Binance, Kraken, and Cumberland.