Who Will Be the Biggest Winner as Bitcoin Breaks Through $100,000?

btc-winner@newsletter.paragraph.com (lupengwei06) — Fri, 06 Dec 2024 02:32:01 GMT

During his presidential campaign, Trump repeatedly endorsed cryptocurrency.
On May 8th, Trump held an NFT dinner and announced on the spot that he would vigorously embrace cryptocurrency and end the United States' hostility towards digital currency.
On June 11th, Trump met with several representatives of the Bitcoin mining industry. He emphasized that he would advocate for miners in the White House.
On June 12th, Trump posted on Truth Social that he hoped the remaining Bitcoins would be mined within the United States. On July 27th, Trump gave a keynote speech at the Bitcoin 2024 conference, promising that if he returned to the White House, he would appoint cryptocurrency-friendly regulatory agencies and establish a national strategic Bitcoin reserve.
On September 19th, Trump showed up at a cryptocurrency-themed bar in New York and spent the equivalent of $950 in Bitcoin to buy hamburgers and Coke for fans on the spot.
On October 15th, with Trump's support, the World Liberty Financial platform officially launched a new cryptocurrency, WLFI. The total issuance of WLFI tokens is 100 billion, with a total value equivalent to $300 million.
Trump is not only a supporter of the cryptocurrency market but also a direct beneficiary. Trump's wife and children earned $22 million by selling Trump-branded digital trading card NFTs.
During the presidential campaign, Trump's campaign team received political donations from cryptocurrency companies. After the campaign, Sun Yuchen, a well-known figure in the cryptocurrency circle, invested $30 million to purchase WLFI tokens, which could enable the Trump family to make a profit of $15 million.
In a sense, Trump has become the best spokesperson for cryptocurrency. Some even say that Trump is the "Bitcoin President".
Since Trump won the U.S. election on November 5th, Bitcoin has entered a sharp upward trend. On November 10th and November 13th respectively, it broke through the $80,000 and $90,000 marks.
On November 20th, Trump's team was discussing whether to create a new position in the White House specifically responsible for cryptocurrency policies. This would be the first position in the White House specifically targeting cryptocurrency, highlighting the influence of the cryptocurrency industry on the new government. The next day, the price of Bitcoin rose above $98,000.
On December 5th, Trump nominated Atkins, an official with a friendly attitude towards cryptocurrency, as the new chairman of the U.S. Securities and Exchange Commission. It is reported that Atkins will focus on reducing the regulation of cryptocurrency and alleviating penalties for violations. Subsequently, the price of Bitcoin soared and broke through the $100,000 mark at one stroke.
However, Trump has not always supported cryptocurrency. On the contrary, he used to be the "number one opponent" of cryptocurrency.
In July 2019, Trump wrote: "I'm not a fan of Bitcoin and other cryptocurrencies. I think their values are highly volatile, based on 'thin air', and may facilitate illegal activities." He believed that cryptocurrency has no intrinsic value and is extremely vulnerable to being used for illegal activities such as money laundering and drug trafficking. At that time, Trump also strongly opposed the cryptocurrency project launched by Facebook. He thought that this project would challenge the dominant position of the U.S. dollar and threaten the global financial order.
Times have changed. With the change in Bitcoin's market value, Trump's understanding of digital currency has also been constantly deepening. As Bitcoin has ranked among the top ten global assets and become part of the mainstream financial system, Trump has begun to reexamine cryptocurrency.
During the U.S. election, Bitcoin rose to a record high. Besides, to solve the problem of campaign funds, Trump needed to expand financial resources, and wealthy cryptocurrency companies were one of the options. And people in the cryptocurrency circle were also optimistic about Trump's political prospects and were willing to bet on him.
Having received benefits, Trump naturally had to speak well of people in the cryptocurrency circle. In May this year, at the Libertarian National Convention, Trump announced that after taking office, he would reduce the sentence of Ross Ulbricht. Ross Ulbricht is the founder of the cryptocurrency trading website "Silk Road" and was sentenced to 40 years in prison for illegal drug and weapon trading.
Judging from public statements, Trump's goal is to build the United States into a "Bitcoin superpower" and the "global cryptocurrency capital". He plans to buy 200,000 Bitcoins every year within five years and finally establish a national reserve of 1 million Bitcoins, accounting for about 5% of the total Bitcoin supply. He also envisions using cryptocurrency to solve the U.S. $35 trillion national debt.
In more than a month, Trump will take office. Can all these promises be fulfilled? What role will Bitcoin actually play in the U.S. financial system? To figure out these questions, we consulted three experts. Let's listen to their views.
Apart from the "Trump Trade", there are three other important factors behind the rise in Bitcoin's market value: the four-year halving mechanism, Bitcoin ETF funds, and the Federal Reserve's interest rate hike cycle.
The so-called "four-year halving mechanism" means that since 2012, every four years, the mining rewards of the Bitcoin network will be halved. Before 2011, "miners" would receive 50 rewards for each block mined. After November 2012, it was reduced to 25. After July 2016, it was reduced to 12.5. After May 2020, it was reduced to 6.25. After April 20, 2024, it was reduced to 3.125. The halving event may be interpreted by the market as a signal of reduced supply, thus triggering expectations for a rise in Bitcoin's price. So in May this year, the price of Bitcoin rose by about 20%.
If the halving event is to reduce the supply of Bitcoin products, then Bitcoin ETF funds are to increase the capital supply. Since this year, a number of Bitcoin spot ETFs have been issued in capital markets such as the U.S. stock market and the Hong Kong stock market, injecting a lot of fresh blood into the Bitcoin market. Compared with direct investment in Bitcoin, Bitcoin spot ETFs have a lower investment threshold and stricter supervision, so they are more popular among mainstream investors.
Similar to Bitcoin ETF funds, the end of the Federal Reserve's interest rate hike cycle has also prompted more people to enter the Bitcoin market. On September 18, 2024, the Federal Reserve cut interest rates by 50 basis points for the first time since 2020 to 4.75% - 5.00%, ending the 525-basis-point interest rate hike cycle. The liquidity released by the interest rate cut has added economic uncertainty. To combat the uncertainty in the real world, many investors have chosen to purchase cryptocurrency that exists in the virtual world.
There is a reasonable reason for cryptocurrency supporters and Trump to come together. After the difficult bear market in 2018, many loyal supporters of cryptocurrency were washed out or had their beliefs collapsed. Meanwhile, more investors began to choose Bitcoin from a more rational perspective. In 2020, the international geopolitical crisis intensified, and a large number of investors in the traditional financial market bought Bitcoin for hedging. In the past three years, traditional financial investors have become the main investors in Bitcoin, and the price trend of Bitcoin has gradually converged with that of mainstream U.S. assets.
This has promoted Bitcoin to move closer to the traditional financial market and system. The approval of Bitcoin spot ETFs this year is a landmark event. It marks that the mainstream U.S. financial market has officially accepted Bitcoin into the system, and large U.S. financial institutions such as BlackRock and Fidelity have participated in it.
The reason why Trump has turned to support cryptocurrency, on the surface, is the campaign strategy he adopted in this election, trying to win the votes of cryptocurrency supporters. But in fact, it also conforms to Trump and the Republican Party's consistent advocacy of loose financial supervision. In recent years, as investors in the traditional financial market have gradually accepted Bitcoin, Trump naturally treats it as a product of the traditional financial market.
During Trump's second term, he will create more possibilities for Bitcoin. First, the Trump administration will provide more relaxed supervision for cryptocurrency, legalize the business of Bitcoin and other cryptocurrencies, and attract more funds, talents, and technologies that support cryptocurrency to flow into the United States. Second, the U.S. federal government may set up a fund for trading Bitcoin. Finally, the Federal Reserve will not purchase Bitcoin as a reserve asset, nor will it reduce its gold reserves because of this. After all, Bitcoin is an unstable asset and is not suitable for long-term holding as a reserve asset.
All kinds of signs show that Trump will indeed turn the United States into a cryptocurrency power. His recent threat to the BRICS countries also has this factor. He said that if the BRICS countries try to create a currency to replace the U.S. dollar, the United States will impose a 100% tariff. While supporting cryptocurrency, to ensure "America First" and maintain the dominance of the U.S. dollar, it is natural to prevent the rise of other currencies. In his eyes, there will only be the U.S. dollar and cryptocurrency in the future. Trump's envisioned future global financial system is likely to be a dual system of "U.S. dollar + cryptocurrency". Cryptocurrency is an assistant to the U.S. dollar, a tool for suppressing other currencies and sucking up resources from other countries.
If the United States allows cryptocurrency to directly buy stocks and national debts in the future, the global financial system may be restructured. Countries with few profit-making opportunities or poor management will have more funds flowing out through cryptocurrency. This is equivalent to the United States stretching out many straws to directly siphon wealth from various countries.

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Who Will Be the Biggest Winner as Bitcoin Breaks Through $100,000?