Key points
- Donald Trump signalled to deregulate the cryptocurrency sector
- Bitcoin soared to $100,000 for the first time in December since Trump won the election
- Trump once termed cryptocurrencies as scams but praised them in election campaigns
- Trump launched his cryptocurrency $TRUMP which became the 19th largest
ISLAMABAD: Bitcoin hit a record high above $109,000 on Monday as Donald Trump, who has signalled plans to deregulate the cryptocurrency sector, prepares to be sworn in as US president.
According to AFP, bitcoin surged to reach an all-time peak of $109,241 ahead of Trump’s inauguration ceremony, before falling back to $107,765 at around 0740 GMT.
The world’s biggest cryptocurrency has soared since Trump won the presidential election in November, with bitcoin surpassing $100,000 for the first time in early December.
It came after he nominated cryptocurrency backer Paul Atkins to head the US securities regulator, reinforcing optimism the new president will deregulate the sector.
Despite having once branded cryptocurrencies a “scam”, Trump changed his stance and was a major advocate of them during his election campaign.
Launch of $TRUMP
Over the weekend, he launched his own cryptocurrency, appropriately called $TRUMP, sparking feverish buying that sent its market capitalisation soaring to several billion dollars.
According to the New York Times, Eric Trump, one of Mr. Trump’s sons, who helped launch the token, declined to comment on Sunday.
When bitcoin reached the landmark $100,000 level, Trump wrote on his Truth Social platform: “CONGRATULATIONS BITCOINERS!!! $100,000!!! YOU’RE WELCOME!!! Together, we will Make America Great Again!”
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.
The Trump family’s novel cryptocurrency jumped in just two days in becoming one of the most significant forms of digital currency in the world, creating the potential for a multibillion-dollar pay-out to the family but also generating hundreds of questions about the conflicts of interest the new venture creates, according to the New York Times.
The new business venture by the Trump family has led to increasing criticism and ethical questions, even as it has turned into an overnight phenomenon.
Meme coin
However, economists along with some long-time crypto investors said the new digital coin, famous as a meme coin, might also become a landmark moment in the speculative history of crypto trading and the potential dangers it poses to the financial system.
Memecoins are a type of cryptocurrency tied to an online joke or a celebrity mascot.
“If people want to gamble, I don’t really care,” said Lee Reiners, a former Federal Reserve economist who is now a lecturer for a center studying global economic markets at Duke University.
“What I care about is when this crypto bubble bursts — and it will burst — it will end up impacting people across the economy even if they don’t have direct investment in crypto. And this new coin is making it worse.”
The Trump tokens had a total trading value of around $13 billion, and a total of $29 billion worth of trades had taken place in two days.
That calculation is based on the nearly $64 value of each of the 200 million tokens issued, according to CoinGecko, an industry data tracker.
Origins of bitcoin
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 decentralised 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 criticised for being the currency of choice for making untraceable payments on the so-called dark web, a 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.
Its carbon footprint has also come under scrutiny because mining cryptocurrencies requires huge amounts of energy.
