Bitcoin surged on Thursday, continuing its overnight rebound as investors became more confident that the incoming administration of Donald Trump will usher in a more favorable regulatory environment for the cryptocurrency industry.
The digital currency rose 3.1%, reaching $95,645.00 by 00:31 ET (05:31 GMT), moving closer to the coveted $100,000 mark after failing to breach this level last week. Despite some profit-taking earlier in the week that led to steep losses, Bitcoin remains up over 100% year-to-date in 2024.
A key catalyst behind Bitcoin’s rally is the expectation that Trump’s presidency will bring friendlier regulations. According to a report from Fox Business on Wednesday, Trump’s administration plans to shift the bulk of cryptocurrency regulatory oversight from the Securities and Exchange Commission (SEC) to the Commodity Futures Trading Commission (CFTC). The CFTC, which regulates the U.S. derivatives market, is considered to have more lenient standards compared to the SEC, providing a sense of relief to the crypto sector.
This shift in regulatory authority comes after a turbulent period for the crypto industry, marked by aggressive enforcement actions from the SEC against alleged bad actors. The regulator’s crackdown has shaken investor confidence, contributing to significant price declines across the crypto market since 2022.
In response to the news, XRP—whose issuer, Ripple, has been locked in a lengthy legal battle with the SEC—jumped more than 7% on Thursday.
Adding to the optimism, Trump’s team is reportedly considering veteran financial regulator Paul Atkins as a potential candidate to replace SEC Chair Gary Gensler. Bloomberg reported on Wednesday that Atkins, who has been interviewed by Trump’s team, is known for his pro-crypto stance and is expected to take a more industry-friendly approach to regulation. Gensler, who announced he would step down when Trump takes office next year, has faced criticism from crypto advocates for his enforcement-heavy approach to regulation.
Trump’s selection of pro-crypto figures to lead the Treasury and the Department of Commerce also signals a shift towards a more supportive environment for digital assets.
However, despite the rising optimism, some analysts caution against overly optimistic expectations. Compass Point Research noted that Trump’s plan to establish a Bitcoin strategic reserve may have limited potential, as it is unlikely that the Treasury will approve deficit-driven funding to purchase Bitcoin. With Congress, where the Republican party holds a slim majority, also reluctant to increase the fiscal deficit, the plan faces significant hurdles.
The firm also dismissed the BITCOIN Act, proposed by Senator Cynthia Lummis, as a “nonstarter.”
Meanwhile, other cryptocurrencies followed Bitcoin’s upward trajectory. Ethereum, the second-largest cryptocurrency, rose 5.1% to $3,572.13. Solana gained 4.2%, Cardano climbed 5.2%, and Polygon increased by 4%. Among meme tokens, Dogecoin saw a rise of 4.3%.
As the crypto market rallies, the broader sentiment remains hopeful that Trump’s administration will bring much-needed regulatory clarity and support for the industry.
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