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The price of one Bitcoin hit more than $82,000 Monday after reaching a record $80,000 for the first time Sunday, a rise fueled by the election of Donald Trump and more than a dozen new pro-cryptocurrency US lawmakers.
The industry poured $170 million into campaigning, and traders are riding a wave of hope that Washington will “treat it differently from Wall Street,” The Wall Street Journal wrote.
While campaigning, Trump promised to create a “strategic Bitcoin stockpile” and push for regulatory changes that would make the US a global leader in the space, though questions remain about the practical challenges of such an approach, Bloomberg noted.
SIGNALS
Trump’s reelection fuels hopes of a crypto renaissance
Trump’s second administration is raising the crypto industry’s hope for widespread acceptance in the US. “Our worst days as an industry are behind us, and we are on a path to getting appropriate and lasting policy,” the head of an industry lobbying group told The Wall Street Journal. With Republicans close to gaining control of the House — alongside the Senate — passing crypto-specific bills will become “much more likely,” the Crypto Is Macro Now newsletter wrote. Industry insiders are hoping for a change in the Security and Exchange Commission’s approach, where chair Gary Gensler has been openly hostile to crypto. “You could replace Gary Gensler with pretty much anybody on earth and it would get better,” the founder of a crypto advisory firm told the Financial Times.
The practical aspects of Trump’s crypto goals may not be straightforward
Trump’s pro-crypto views could signal a shift for the industry in the US, but his plans may be challenged by “the realities of government structure and market dynamics,” crypto-focused outlet Unlock Blockchain wrote. Traders rejoicing over Trump’s win are hardly paying attention to questions about “the speed of likely implementation or whether a strategic stockpile is a realistic possibility,” Bloomberg reported. Former prosecutors are alarmed by his vow to create a national Bitcoin stockpile by holding on to the crypto seized by the US government, because those assets are usually used to compensate victims of crimes. And his call to concentrate Bitcoin mining within the US could expose the network to regulatory risks and geopolitical conflicts, making it less secure, Unlock Blockchain argued.
Bitcoin’s price rally may reach its limit soon
While the long-term outlook for bitcoin looks positive, its chances of a short-term correction are increasing, analysts said. Investors’ sentiment had “reached an extreme greed level,” which “usually precedes bearish reversal triggered by investors who seek to take profit,” Crypto News Flash wrote. But a potential price decline “could recharge bulls’ engines for a more long lasting rise to $90,000 and higher,” Coindesk noted, and one research firm predicted it will grow 60% to over $120,000 by April next year, Business Insider reported.