Bitcoin rallies to $104,000 as crypto traders gear for Donald Trump’s inauguration, here’s what to expect
- Bitcoin holds steady above $104,000 on Friday, open interest in BTC has crossed $65 billion.
- Donald Trump’s inauguration is scheduled for Monday, experts argue this could turn into a pump-and-dump event for crypto.
- Cryptocurrency expert Frank Chaparro says the crypto community is celebrating Trump’s inauguration as the end to a four-year “harassment” of crypto startups.
Bitcoin (BTC) rallied to a high of $104,254 on Friday as traders anticipate a Trump-led rally with the inauguration event on Monday. The crypto community of traders, investors and businesses has pinned their hopes on the first-ever crypto president’s plan to designate crypto as a national priority.
The market capitalization of crypto crossed $3.78 billion on Friday, following an increase of over 4% in the past 24 hours.
How crypto could become a national priority, led by Trump
According to a Bloomberg report last updated on Friday, President-elect Donald Trump is planning to release an executive order to position cryptocurrency as a “national priority,” per sources close to the matter.
The order is expected to prioritize crypto and guide United States (US) government agencies in working with the industry. A crypto advisory council could be created, according to anonymous sources. The details of the plan are not public yet.
The President-elect has the support of crypto firms and political action committees funded by institutions like Ripple Labs and Coinbase. Throughout the Biden administration, crypto firms faced lawsuits initiated by financial regulators like the Securities and Exchange Commission (SEC).
The Bloomberg report argues that the creation of a national Bitcoin stockpile, an executive order to give crypto national priority and pause or stop legal actions that target crypto firms could be a top priority for the incoming administration.
Sources caution that the executive order could come as soon as Monday and may be revealed to the public once it is final.
Kara Calvert, vice president for US policy at Coinbase Global Inc., told Bloomberg:
“What I think Donald Trump is going to do is signal that the United States is back and we are ready to lead in this industry. What it’s signaling to other countries is be careful, or you won’t keep up.”
Frank Chaparro, an early Bitcoin investor and director of special projects at The Block, told to the New York Post:
“The entire market is relieved. We have a seismic shift in the approach and tone of the government and regulatory agencies. What this means practically is, banks will be able to touch crypto — for the last four years they’ve been told they can’t.”
Why the inauguration could be a pump-and-dump for Bitcoin
Jeffrey Funk, retired professor and winner of the NTT DoCoMo mobile science award, and Gary Smith, professor of economics at Pomona College, believe that the inauguration on Monday could be the biggest pump-and-dump event in crypto.
Funk and Smith argue that the Bitcoin market has been rife with manipulation. In an opinion editorial on MarketWatch, the experts said that the federal government can foolishly spend trillions of dollars buying Bitcoin at ever-increasing prices.
As demand for Bitcoin rises, the token’s price rallies. However, to create a stockpile, the government is expected to continue buying at higher prices.
Experts said:
“Perhaps Trump envisions a ‘pump-and-dump’. In a pump-and-dump scheme, a group of scammers circulate untruthful rumors about an investment, while trading at ever higher prices, luring in the credulous. After prices have been pumped up, the conspirators dump their holdings by selling to the suckers (a.k.a. “bag holders”).”
At the time of writing, open interest in Bitcoin has crossed $69 billion and BTC trades at $104,549.
Author
Ekta Mourya
FXStreet
Ekta Mourya has extensive experience in fundamental and on-chain analysis, particularly focused on impact of macroeconomics and central bank policies on cryptocurrencies.
