Record-breaking developments

The value of bitcoin has seen more significant growth since Donald Trump's victory in the US election, with the USD 100 thousand mark starting to be approached just a few weeks afterwards.* The long-awaited new high was finally surpassed by the digital gold on the morning of 5 December 2024, rising by a further 2 percent later in the day to reach an all-time high of 103,625 USD. Although it subsequently experienced several declines, it still managed to break the 100 thousand mark a few more times. The cryptocurrency is also doing well in the long term. Year-on-year, it has already gained 126 percent, while in the last 5 years it has gone up more than a thousand percent. Let's see if it maintains its current value and can increase it even more as the new year approaches.

Bitcoin price evolution over the last 5 years. (Source: TradingView.com)*

The promises have started to come true

Trump has nominated Paul Atkins to head the US Securities and Exchange Commission (SEC), and the nomination is a big win for the cryptocurrency world. Trump posted a congratulatory status on his social network, describing the nominee as a champion of "common sense regulation." Atkins has long advocated for clearer and less restrictive regulations and the development of innovation without the need for unnecessary oversight. In his view, stringent regulations can cause companies to move outside the US, as Yahoo Finance reports. If the proposal goes through, Atkins will replace the current chairman, Gary Gensler, who has become unpopular due to his strident views on digital assets, describing them as a "scam full of crooks" in an interview with the BBC. Trump used this statement to his advantage and during his candidacy he tried to win over crypto-addicts voters by promising to immediately remove Gensler from his position as head of the SEC. Back in late November, Gensler announced on the social network X that he himself would resign on the day of the president's inauguration. To reinforce promises of the US being the cryptocurrency capital, Trump has tapped former PayPal chief operating officer David Sacks as White House adviser on cryptocurrency regulation and artificial intelligence. The latter told CNBC back in 2017 that cryptocurrencies have a similar "money database" concept to PayPal.

US leader in cryptocurrencies?

But ousting Gensler wasn't the only promise Trump made to his voters. At a conference in Nashville in July, he pledged that his administration would keep all Bitcoins that the federal government owns or acquires in the future, moving away from the current practice of auction sales. According to him, this is a strategic move to strengthen the nation's cryptoreserves. In addition, at a June meeting with Bitcoin mining executives, Trump expressed support for the U.S. to become a cryptocurrency mining hub, stressing that domestic production could bolster energy dominance. He argued that President Biden's negative stance benefits foreign competitors such as China and Russia, and reiterated that all future Bitcoin mining should take place in the USA. Trump's broader strategy also includes lowering interest rates, a move CNBC reports has historically been linked to a rise in digital asset prices due to cheaper borrowing.

Benefits for others

The potential changes could also help other cryptocurrencies that are currently overshadowed by Bitcoin. For example, the cryptocurrency XRP rose to its all-time high of 2.85 USD on December 3, 2024.* Relaxed regulatory rules could help it in a lawsuit against its issuer Ripple Labs. The payments network, which provides services to financial institutions, was sued by the SEC in 2020 for failing to register its digital token as a security and selling it anyway. Three years later, the court ruled that a violation only occurred if XRP was sold to institutional investors and ordered it to pay a 125 million USD fine. The SEC appealed the ruling, which has now postponed the years-long fight indefinitely.

XRP price evolution over the last 5 years. (Source: TradingView.com)*

Sleeping mountain comes to life?

In the Bitcoin context, the defunct exchange Mt. Gox, which has seen significant movements of the digital currency. According to Arkham Intelligence, an address associated with Mt. Gox more than 27 thousand BTC, representing almost USD 3 billion, to an unknown digital wallet. Meanwhile, it has already transferred over 2 thousand BTC recently. Despite this large outflow, the exchange still holds nearly 40 thousand BTC worth more than 4 billion USD . In its heyday, between 2010 and 2013, the Tokyo exchange processed more than 70 percent of bitcoin transactions, but declared bankruptcy in the spring of 2014. The latter came after Mt. Gox faced several complaints about collection problems and, most notably, after a hacking attack in which up to 850 thousand Bitcoins were stolen. After years of legal tug-of-war, creditors may have come to their senses. Indeed, as Coindesk.com reports, it's likely that the recent transactions are ongoing repayments. Although an earlier repayment was originally expected, the deadline has been extended until October 31, 2025.

Olivia Lacenova, principal analyst at Wonderinterest Trading Ltd.

* Past performance is no guarantee of future results.