What to make of Bitcoin hitting an all-time high
“Congratulations Bitcoiners… you’re welcome,” boasted Donald Trump this evening, as he rushed to take credit for a much-anticipated milestone after the price of the world’s largest cryptocurrency surged above $100,000 today for the first time ever.
This record-high valuation is up more than 50 per cent since Trump’s November election victory. And it’s a remarkable turnaround from 2022 when its price plumetted below $16,000 following the dramatic fall of “crypto king”, Sam Bankman-Fried.
As for Trump, who has vowed to make the US the "the crypto capital of the planet", credit where credit is due. That Bitcoin finally passed the $100,000 mark is being attributed to his appointment yesterday of Paul Atkin to head America’s main market regulator, the Securities and Exchange Commission. Atkin is expected to adopt a much friendlier approach to the cryptocurrency sector than the outgoing Gary Gensler, who labelled it an industry “rife with fraud and hucksters and grifters”.
First, a quick recap. Bitcoin is a digital currency that operates without government or central bank oversight. It was introduced to the public in 2009 by an anonymous developer and, while its popularity has inspired the development of many other cryptocurrencies, it was the first - and remains the biggest - decentralised cryptocurrency.
Trump is a convert. As recently as 2021, he labelled Bitcoin a "scam", criticising it for affecting the value of the US dollar during his first tenure at the White House. But on the 2024 campaign trial, he heavily rebranded himself as the pro-crypto candidate.
In May, his campaign began accepting crypto donations, raising millions from the move and, in September, he launched his own cryptocurrency business called World Liberty Financial. He is also proposing a national Bitcoin stockpile, and his ally, Wyoming Senator Cynthia Lummis, is calling for a reserve consisting of one million Bitcoin - nearly five per cent of the global supply - to match the size and scope of the country’s gold reserves.
Bitcoin’s rally is not solely driven by Trump’s newfound enthusiasm for the sector. Mainstream asset managers, including Blackrock, Fidelity and GrayScale, have been heavily buying up Bitcoin ever since January, when the first stock market funds investing in crypto received regulatory approval.
Some believe this latest crypto boom is different from previous rallies, and that Bitcoin is finally being taken seriously. Others caution that it remains a hugh-risk asset.
Aside from its volatility, concerns about cybersecurity risks and the environmental impact of energy-intensive Bitcoin mining remain unresolved.
Crypto enthusiasts like to float Bitcoin as a possible replacement for the US dollar. And another leader who will delight in today’s rally is Nayib Bukele, President of El Salvador, who made Bitcoin legal tender in the central American nation back in September 2021. Meaning supermarkets, hairdressers and other shops are obliged by law to accept Bitcoin alongside the US dollar. Reception to this trailblazing move has been somewhat muted: as of last month, eight per cent of Salvadorans were estimated to have used Bitcoin to make payments, while the dollar remains king in the country. But Bukeleis still hoping it will take off.
Meanwhile, US Fed chair Jerome Powell insists that Bitcoin is “a speculative asset” that will never replace the dollar.
“It’s not a competitor for the dollar. It’s really a competitor for gold,” said Powell, who is almost certainly right that US consumers are a long way off adopting Bitcoin as their main form of payment. Then again, it’s unsurprising that the world’s most important central banker isn’t rushing to predict a bright future for the world’s largest decentralised currency.
Caitlin Allen
Deputy Editor
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Couldn't find it on wayback machine. For now I have provided a link to it here (including the original link (https://reaction.life/bitcoin-will-change-the-world/) which may update when the article is migrated over):
https://alexstarling77.substack.com/p/an-interesting-article-on-bitcoin
I thought your article by "Lucid Ledger" a few months ago was quite interesting. I couldn't find it on your new site but it might be on Washback machine...