Bitcoin hits $80,000. Why is Trump promoting cryptocurrencies?
(CNN)— This Sunday, Bitcoin reached a new record, surpassing $80,000. The world’s largest cryptocurrency soared ahead of Tuesday’s US presidential election, surged on election night after it became clear Donald Trump would win and continued to rise in the days following his victory.
Bitcoin is up 80% this year, far outpacing the S&P 500’s still-impressive 25.7% gain this year. After briefly reaching $80,000, Bitcoin was trading just below that mark mid-morning on Sunday.
The cryptocurrency industry believes Trump’s victory is a bullish sign for Bitcoin and other digital currencies. While Trump was once skeptical of bitcoin, saying it was “based on air,” he has embraced cryptocurrencies fully in recent months, in contrast to the Joe Biden administration, which has sought to control them.
One of the main reasons Trump has changed his stance on cryptocurrencies is because he now has a financial interest in them. In September, Trump and his children started a new cryptocurrency business called World Liberty Financial.
“It’s very young and growing fast,” Trump said of the cryptocurrency industry on Sept. 16 while introducing World Liberty Financial. “I believe in her.”
The Biden administration, by contrast, is much more skeptical about cryptocurrencies. Securities and Exchange Commission (SEC) Chairman Gary Gensler said in June 2021, in one of his first appearances in his then-new job, that cryptocurrencies are “riddled with fraud, fraud and abuse.”
Gensler’s Securities and Exchange Commission has sued cryptocurrency companies and has been working to regulate an industry that the president said he believes consists at least in part of securities that are traded illegally. The SEC has also worked with other regulators, including the Department of Justice, to pursue cryptocurrency scammers, most notably Sam Bankman-Fried, the notorious CEO of FTX.
Gensler slowly promoted (but eventually approved) a bitcoin exchange-traded fund that allows people to increase exposure to cryptocurrencies in their retirement accounts. In January 2024, Gensler’s user X was hacked and his account falsely posted a message that a long-awaited Bitcoin fund was open for business, temporarily causing the cryptocurrency to rise.
In August, Trump said cryptocurrencies could “define the future,” adding that he wants them to be “mined, minted and made in America.” The president-elect also proposed creating a National Strategic Bitcoin Reserve similar to the US Strategic Petroleum Reserve, directly purchasing and investing in cryptocurrencies as a national security measure.
Elon Musk, one of Trump’s most visible and ardent supporters, is a well-known supporter of cryptocurrencies. Musk’s favorite coin, Dogecoin, rose more than 20% this Sunday and has been rising all last week.