London (AFP) – Bitcoin broke $100,000 for the first time Thursday after Donald Trump nominated cryptocurrency backer Paul Atkins to head the US securities regulator, reinforcing optimism that the incoming president will deregulate the sector. The digital unit has enjoyed a blistering rally since the November 5 election of Trump, who pledged to make the United States the “bitcoin and cryptocurrency capital of the world.” Bitcoin eased to around $102,700 Thursday after hitting a record of $103,800.45. The volatile asset has jumped more than 50 percent since the tycoon’s victory and around 140 percent since the turn of the year.
However, its advance had stalled in recent weeks, sitting just below $100,000 as traders awaited new catalysts before jumping in to buy. That came after Trump, who takes office in January, announced Wednesday that he would nominate Atkins to take over as chair of the Securities and Exchange Commission. Atkins, an SEC commissioner from 2002 to 2008, founded risk consultancy firm Patomak Global Partners in 2009, whose clients include companies in the banking, trading, and cryptocurrency industries. An announcement from the Trump transition team noted that Atkins had been co-chairman of the Digital Chamber of Commerce, which promotes the use of digital assets, since 2017.
“Paul is a proven leader for common sense regulations,” Trump said in a statement that emphasized Atkins’ commitment to “robust, innovative” capital markets. “He also recognizes that digital assets and other innovations are crucial to making America greater than ever before,” Trump added.
Atkins replaces Gary Gensler, who led a crackdown on the sector after a 2022 market rout. Even so, the SEC this year authorized the trading on the American market of two new financial products, allowing a wider public to buy cryptocurrencies, called ETFs (exchange-traded funds). “Institutional interest and regulatory shifts are adding legitimacy, turning what once seemed like a fringe asset into a force reshaping finance,” said Matt Britzman, a senior analyst at Hargreaves Lansdown. “Love it or doubt it, bitcoin’s climb is rewriting the rulebook for digital assets,” he added.
Despite having once branded cryptocurrencies a “scam,” Trump changed his stance and has been a major advocate of the unit during his election campaign. In September, he announced that he, along with his sons and entrepreneurs, would launch a digital currency platform named World Liberty Financial. Trump has also become close to tycoon Elon Musk, who he said would lead a new US government-efficiency group tasked with cutting federal waste. Musk, a cryptocurrency fan himself, reportedly spent more than $100 million to help Trump regain the White House, repeatedly boosting his candidacy on his X social media platform. Reacting on X to the news of bitcoin hitting the $100,000 mark, Musk wrote: “Wow.”
Among measures expected with Trump at the helm is the creation of a strategic reserve of bitcoins in the United States, consisting mainly of tokens seized by the courts, which could push other countries to grant more legitimacy to the virtual currency. Cryptocurrencies have made headlines since their creation, from their extreme volatility to the collapse of several industry giants, foremost among them the FTX exchange platform. “It’s volatile, unpredictable and is driven by speculation, none of which makes for a sleep-at-night investment,” said Dan Coatsworth, an analyst at investment group AJ Bell.
Bitcoin was conceived in 2008 by a person or group writing under the name Satoshi Nakamoto. It was pitched as a way to break free of mainstream financial institutions by establishing a decentralized platform for transactions. The digital currency is created — or “mined” — as a reward when powerful computers solve complex problems to validate transactions made on a meddle-proof register known as the blockchain. Bitcoin has long been criticized for being the currency of choice for making untraceable payments on the dark web, the hidden part of the internet used for criminal activities.
The asset has often come under attack for facilitating money laundering and allowing extortion through ransomware attacks. In September 2021, the unit was accepted by El Salvador as legal tender, though according to a study by Central America University, in 2023, 88 percent of Salvadorans never used it. Its carbon footprint has also come under scrutiny as mining cryptocurrencies requires huge amounts of energy.
© 2024 AFP
