Crypto Sector dreams of a golden period under Trump

Src: Yahoo Finance

The crypto industry is expecting a transformative period under the leadership of Donald Trump, who has been dubbed the first "cryptocurrency president". This optimism is largely charged by expectations of lighter regulation and broader adoption of crypto, particularly Bitcoin, which has seen a significant price surge recently.

The value of Bitcoin has soared over 120% in 2024, surpassing the psychological barrier of $100,000, largely attributed to the approval of Bitcoin ETFs by the Securities and Exchange Commission and the electoral victory of Trump.

This surge in price has ignited renewed interest among investors, with many worrying they might miss out on potential gains (FOMO).

The crypto industry is hopeful for a shift in regulatory attitudes. Trump's campaign included establishing a strategic Bitcoin reserved and appointing pro-crypto individuals to key positions, such as Scot Bessent as Secretary of the Treasury and Paul Atkins as chairman of the SEC. This is looked upon as a signal for a more friendly regulatory environment.

Major firms are increasingly investing in Bitcoin. For example, MicroStrategy has collected 440,000 bitcoins, and other companies like Tesla and Marathon Mining are also adding Bitcoin to their portfolios. This trend signals a wider institutional acceptance of crypto.

The proposed Bitcoin Act of 2024 aims for the United States Treasury and Federal Reserve to purchase up to one million Bitcoins over five years, positioning Bitcoin as a hedge against inflation and devaluation of currency.

Despite the optimism, there are concerns regarding systematic risks linked with increased institutional involvement in the crypto market. Experts warn that if prices were to crash, the impact could be more intense due to the intertwining of crypto with traditional financial systems.

Overall, the crypto industry is set for what many consider to be a "golden era," driven by favorable regulatory changes and increasing mainstream acceptance during Trump's presidency.

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