A few hours after the confirmation of the victory of Donald Trump in all 7 swing states, the major cryptocurrencies have made another leap forward. Bitcoin, the most famous and traded in the world, it surpassed the record of 80 thousand dollars and Ethereum the second most important token in circulation, of the 3,200.
In part these are the typical reactions of speculative markets to probably positive news: Trump has in fact announced, among other things, a national reserve of cryptocurrencies, which would further raise the price of token if implemented. But this is growth that is also based on real results, including the economic situation in the United States and the progressive cut in interest rates by the Fed.
Record-breaking cryptocurrencies: Bitcoin runs thanks to Trump
Since it became clear that Donald Trump had won the US presidential election again, the value of cryptocurrencies began to increase. Bitcoin, the most widespread and traded in the world, has grown by 14.75% in the 5 days that have passed since the election of the new American president in pectore. Over the weekend alone, it jumped by 4.5%, thanks to the official confirmation that the Republican Party candidate had won in all seven swing states.
I value touched by Bitcoin at the peak of this race it was 80 thousand dollars, a new historical record that surpasses the heights of 2020. The rise of Ehtereum, the second most important cryptocurrency in the world, which reached $3,200 in value on November 10th. Its percentage growth since Donald Trump was elected is 32%, a sudden leap which however does not represent a new record. In fact, the 2022 peak still holds for this token.
However, cryptocurrencies have been recording excellent results for several months. Their trend, which in the first years of this technology’s life was often linked to dynamics that were difficult for traditional financial operators to interpret, has become moderately more predictable with the progressive spread of the popularity of the various tokens. The cryptocurrencies they increasingly behave like a speculative market. They react well to low interest rates and large amounts of money, while they tend to decrease in value in the event of economic crises or restrictive monetary policies.
Why Bitcoin is doing well
Part of the Bitcoin blaze is certainly due to hopes on the promises made by Donald Trump during the election campaign. However, it cannot be ignored that economic and financial conditions are increasingly favorable to an increase in the value of these assets. A few hours after the electoral victory of the Republicans, the Federal Reserve announced a cut in interest rates, expected but still positive for a market that benefits greatly from a greater availability of liquid money.
The Fed, which for several months seemed very cautious in lowering dollar interest rates, now seems convinced that inflation is under control. In September in United States, the price increase figure remained around 2.4%, a few tenths of a point above the threshold considered healthy for a growing economy. The USA continues to record very high GDP growth, at rates not comparable to those of other developed countries.
Finally, the change in administration will ensure that there will be no further regulation of the drug market cryptocurrencies. A confirmation of the Democrats in the White House would have laid the foundations for a new regulatory wave that would most likely have slowed down the growth of tokens. With Donald Trump, however, the opposite could also happen, with a deregulation that would accentuate the speculative traits and sudden changes, upwards and downwards, in the value of Bitcoin.
Donald Trump’s promises
Donald Trump’s victory is established on these solid foundations, which have allowed the cryptocurrency market to stabilize at an average value higher than that of recent months. The future president has not only promised the blocking of new regulations on cryptocurrencies, but also a series of other interventions that could increase the value of token at previously unknown rates.
The most important is the one that revolves around the creation of one national reserve of cryptocurrencies as a strategic asset. The law already exists and was proposed by Senator Cynthia Lummis. The creation of a national reserve of Bitcoin would serve to combat the increase in debt. The USA is already the main state power among cryptocurrency holders, but this is above all the result of seizures from criminal associations that used the tokens to launder money.
The plan is much more ambitious. This is the purchase of 5% of the global Bitcoin reserve. In 2024 there are approximately 20 million Bitcoins in circulation. This means that the US would aim to purchase around 1 million tokens. At current values, this would be an expense of 80 billion dollars. A figure that is almost certainly underestimated, given that the mere announcement of an operation of this type would in all likelihood rapidly increase the value of the cryptocurrency.
Among the companies most awaiting developments of this type are the major crypto exchanges, such as Coinbase e Binance. The latter was hit with a $4.3 billion fine for allowing Russian entrepreneurs to use its services in order to circumvent sanctions imposed on them by Western countries due to the war in Ukraine. According to the managements of these companies, however, the new Trump administration will mark the beginning of the golden age of cryptocurrencies.
However, not everyone is so positive about the realization of Donald Trump’s plans. Some experts have warned of the lack of technical knowledge regarding the topic of cryptocurrencies on the part of the future president of the United States and the most important members of his staff. In particular David Yermack, professor of finance at New York University’s Stern School, said: “Trump made very extreme promises on the campaign trail. But if you listen to his speeches, you will realize that he has no idea what a digital asset is.”
