The intersection of Trump’s promises and Bitcoin’s $250,000 forecast

As a seasoned investor with over three decades of experience in various markets, I must say that the potential for growth and innovation in the crypto space under Trump’s presidency is truly captivating. Having weathered numerous market cycles and witnessed the birth and maturation of countless industries, I find myself drawn to the parallels between the early days of the internet and the burgeoning cryptocurrency landscape.

In light of analyst predictions that Bitcoin may hit $250K, what impact could Trump’s statements potentially have on this forecast? What key factors should we keep an eye on in the near future?

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Trump triumphs

Donald Trump has returned to the Oval Office, having been elected the 2024 U.S. President, marking his fourth term as the 47th leader. Following a lively election night celebration at Mar-a-Lago, attended by guests such as Elon Musk and Robert F. Kennedy Jr., digital market assets saw a boost in response.

bitcoin (BTC) surged above $75,000 to hit a new peak, while related stocks such as Coinbase and MicroStrategy experienced notable growth in after-hours trading.

For those who favor cryptocurrency, Trump’s victory signifies more than just another Republican presidency. This is significant given that Trump has recently made strong promises to safeguard cryptocurrencies, which marks a striking contrast to his past views on digital assets, which were decidedly cool at best.

Furthermore, as Trump’s fellow Republicans gain control of the Senate, they pave the way for the enactment of policies Trump suggested during his campaign. These policies, if implemented, could significantly alter the course of cryptocurrency not just within the U.S., but also on a global scale.

So, what promises has he made, and what should we expect from his term? Let’s find out.

Trump’s promises to the crypto industry

Bold vision for a national crypto stockpile

Trump intends to establish a “national strategic reserve of cryptocurrencies” in simpler terms. This means that if the government seizes Bitcoins, Trump plans to keep them as a form of national wealth, rather than selling them at auction.

Trump proposes that, much like how nations keep reserves of gold or oil, it would be wise for the United States to set aside some Bitcoin to safeguard against potential future economic uncertainties.

Presently, the American administration frequently sells confiscated Bitcoins stemming from criminal proceedings, like those obtained post-Bitfinex hack. However, Trump has proposed stopping these Bitcoin sales.

The significance of this pledge lies in the fact that the U.S. Marshals Service often sells seized Bitcoins, which can occasionally lead to brief drops in market value. Not long ago, a massive sale of Bitcoin by Germany triggered comparable fluctuations in price.

Without presenting a clear management strategy for the reserve, some believe Trump’s move could potentially help position the U.S. as a leading force in the global cryptocurrency sector.

Creating a strategic Bitcoin reserve

One fascinating pledge made by Trump involves setting up a “strategic Bitcoin reserve” for the United States. Instead of selling Bitcoin confiscated from illegal activities at auctions, he suggests keeping them and steadily accumulating a significant amount of Bitcoin over time, creating a large national Bitcoin reserve as a strategic asset.

The momentum for this plan increased significantly when Senator Cynthia Lummis presented legislation for establishing a “Bitcoin strategic reserve.” This proposal aims to amass approximately one million Bitcoins within a five-year period, serving as a protective measure against our growing national debt.

Implementing this reserve might indicate a change in the United States’ stance towards cryptocurrencies, potentially elevating Bitcoin to the same level of importance as strategic assets such as gold or international currency reserves.

Promise to fire SEC Chair Gary Gensler “on day one”

Trump intends to target the United States Securities and Exchange Commission as well. He’s promised that if he gets elected, one of his first acts will be to dismiss the current chairman, Gary Gensler.

Under the leadership of President Joe Biden’s appointment, Gensler has been spearheading a vigorous clampdown on the cryptocurrency sector. He has initiated more than 100 regulatory actions against crypto firms, alleging them for potential securities law breaches since his tenure began.

Gensler’s viewpoint – that a significant portion of the cryptocurrency sector falls within the purview of the Securities and Exchange Commission (SEC) – has provoked discontent among industry participants. These individuals contend they require more explicit regulations rather than recurring legal disputes.

Yet, Trump’s pledge might not be as simple to fulfill. Although the President has the authority to select the SEC chairman, removing one necessitates legitimate reasons such as negligence or incompetence, given the SEC’s autonomous standing.

It’s advised by legal professionals that dismissing Gensler immediately might lead to an extended evaluation process, which could mean the action won’t be as quick as Trump implies.

Even if Trump manages to appoint a new SEC chairman, this move might signal a move towards more favorable crypto policies, although the extent of the new leadership’s autonomy is still unclear.

A national push for Bitcoin mining

Trump has made another assertive statement, this time proposing that all remaining Bitcoin should be mined exclusively within the United States. His vision is to brand Bitcoin mining as an American-made product, with the ultimate goal of making the U.S. a leading global player in the industry.

During a secluded gathering at Mar-a-Lago, this perspective resonated with significant players within the American cryptocurrency mining sector, such as top brass from firms like Riot Platforms, Marathon Digital, and Core Scientific.

Trump’s objective is in line with his larger strategy for “energy supremacy” in the U.S., as he sees Bitcoin mining as a potential method to increase domestic energy production and reduce dependence on foreign energy supplies.

Nonetheless, reaching that objective isn’t effortless; Bitcoin mining inherently operates in a decentralized manner, with countless miners dispersed worldwide. Centralizing this process within a single nation would clash with the decentralized principles upon which Bitcoin was initially established.

To add to this, approximately 90% of all Bitcoins have already been mined, with just about 10% remaining, which carries a symbolic value. It is this last segment that President Trump aspires to regulate within the jurisdiction of the United States.

Stopping the central bank digital currency development

Trump has vowed to prevent the advancement of a central bank digital currency within the United States. In no uncertain terms, he has expressed his viewpoint: “A CBDC will not come to pass during my presidency,” due to concerns about possible risks to financial privacy.

Unlike decentralized digital currencies such as Bitcoin, Central Bank Digital Currencies (CBDCs) are directly managed by governments, giving them the ability to closely monitor citizens’ financial transactions, which could lead to extensive supervision.

Trump’s stance mirrors that of fellow Republican figures like Ron DeSantis, who recently enacted legislation in Florida intended to restrict Central Bank Digital Currency (CBDC) usage within the state.

Resistance towards Central Bank Digital Currencies (CBDCs) is growing within Congress. Congressman Tom Emmer has proposed the CBDC Anti-Surveillance State Act, an initiative intended to stop the Federal Reserve from launching a CBDC unless it receives approval from Congress first.

The right to self-custody

As a crypto enthusiast, I’m encouraged by Trump’s commitment to establish the right of self-custody for digital asset users within federal legislation. This move underscores the importance of the adage “not my keys, not my coins,” ensuring that my personal assets are safeguarded by the U.S. government.

Direct control over cryptocurrencies lies with the owners themselves when they choose self-custody. This means they personally handle their unique access codes (private keys), giving them complete autonomy over their digital resources, eliminating the need for intermediaries such as exchanges.

This pledge aligns with Senator Ted Budd’s legislative initiative from 2023, the Keep Your Coins Act. The bill is designed to protect Americans’ freedom to use personal cryptocurrency wallets, thereby making it more challenging for regulators to enforce restrictions on self-managed custody of digital assets.

Nevertheless, the idea has ignited controversy. Opponents contend that self-custody might provide an avenue for unscrupulous individuals to dodge anti-money laundering rules. This worry is underscored by Senator Elizabeth Warren’s 2022 Digital Asset Anti-Money Laundering Act, which champions stricter oversight.

In the world of cryptocurrencies, many believe that the ability to self-manage one’s assets is a fundamental liberty. However, there are ongoing debates about how legal regulations could impact the delicate equilibrium between individual autonomy and government supervision.

A crypto-friendly advisory council

One key commitment from Trump’s administration involves setting up a specialized “Cryptocurrency Advisory Group” to help shape their policies regarding cryptocurrencies.

The purpose of this council is to establish transparent and business-friendly rules that foster, instead of hindering, the expansion of cryptocurrency.

Trump emphasizes that the regulations should be crafted by individuals who are passionate about your sector, rather than those who have a grudge against it. This approach would ensure that cryptocurrency policies are shaped with a comprehensive grasp of the industry’s requirements and obstacles.

Numerous experts in the field are expressing worries that existing rules aren’t clear enough, which makes it challenging for businesses to navigate within legal limitations.

On the other hand, establishing this council comes with its own difficulties, like guaranteeing a variety of viewpoints and providing impartial supervision.

Commuting Ross Ulbricht’s sentence

In a more contentious pledge, Trump has declared his intention to reduce the sentence of Ross Ulbricht, the founder of the Silk Road online marketplace.

Initially, Ulbricht was given a life sentence twice over, coupled with an additional 40 years without the possibility of parole – a punishment that has left many people questioning its fairness, given his first-time, nonviolent offense. The online marketplace he developed, known as Silk Road, served as a platform for illicit transactions, ranging from illegal drugs to weapons, using Bitcoin as the primary form of currency.

In various circles of cryptocurrency and libertarian enthusiasts, Ulbricht’s case is seen as a symbol of unity, with supporters claiming that his punishment exceeded the severity of the offense he committed.

Critics argue that his connection to the Silk Road platform may have supported illicit actions and caused harm to people, making it a delicate matter to discuss leniency towards him.

What to expect from Trump’s crypto term

Recent tweets from crypto analysts reflect a mood of optimism as Trump’ presidency begins.

Michael van de Poppe, a well-known cryptocurrency analyst, refers to the present situation in crypto as wrapping up the “protracted and intense Altcoin bear market.

The longest and heaviest #Altcoin bear market is over.
We’re at the start of the bubble in #Crypto.
This cycle will go way higher than we all expect.
— Michaël van de Poppe (@CryptoMichNL) November 6, 2024

He suggests we’re on the brink of a new “Dot.com bubble in Crypto,” hinting that this cycle could “go way higher than we all expect.”

If the current perspective holds true, Trump’s favorable view towards cryptocurrencies might set the stage for a robust market recovery, thanks to a more welcoming regulatory landscape.

According to technical analyst Gert van Lagen, Bitcoin might be approaching its final climb, potentially reaching $250,000 by February of the coming year.

#Bitcoin: The Grand Climb Ahead
— Gert van Lagen (@GertvanLagen) November 6, 2024

He highlights the recent flip in the 10-2 yield curve, a well-known harbinger of economic downturns, as evidence suggesting that Bitcoin’s price might surge due to worsening economic conditions.

At present, the sector is eagerly observing whether Trump’s daring pledges will materialize into concrete actions. Should he follow through, the United States may ascend as a pioneer in crypto integration, fostering employment opportunities and laying down financial alternatives that could indelibly impact the entire cryptocurrency landscape.

2024-11-06 22:25