Bitcoin hits $100,000 for first time

December 05, 2024 (MLN): Bitcoin broke $100,000 for the first time Thursday as traders cheered Donald Trump's decision to pick a crypto fan to head the US securities regulator.

This reinforced optimism that the new president will push through measures to deregulate the sector.

He pledged on the campaign trail to make the United States the "bitcoin and cryptocurrency capital of the world".

The digital unit has jumped more than 50% since the tycoon's poll win and around 140% since the turn of the year.

Additionally, Bitcoin futures rose 8.3% ($8,015.00), reaching a value of $104,550.

The cryptocurrency soared through the mark to a peak of $103,800, having enjoyed a blistering rally since the November 5 election of Trump, as APP reported.

However, the unit's advance stalled in recent weeks, sitting just below $100,000 as traders awaited new catalysts to buy in.

That came with news that Trump has fingered major crypto proponent Paul Atkins to take over as chair of the Securities & Exchange Commission.

Atkins, an SEC commissioner from 2002 to 2008, founded risk consultancy firm Patomak Global Partners in 2009, whose clients include companies in the banking, trading and cryptocurrency industries.

An announcement from the Trump transition team noted that Atkins had been co-chairman of the Digital Chamber of Commerce, which promotes the use of digital assets, since 2017.

"Paul is a proven leader for common sense regulations," Trump said in a statement that emphasised Atkins' commitment to "robust, innovative" capital markets.

"He also recognises that digital assets and other innovations are crucial to Making America Greater than Ever Before," Trump added.

He would replace Gary Gensler, who led a crackdown on the sector after a 2022 market rout. 

Even so, the SEC this year authorised the trading on the American market of two new financial products allowing a wider public to buy cryptocurrencies, called ETFs.

One is backed by the price of bitcoin and the other by ether, the second most popular unit by capitalisation, APP further added.

"Atkins, a conservative legal eagle with a track record of critiquing the SEC's tough stance on cryptocurrency firms, is expected to steer a more crypto-friendly course," said Stephen Innes at SPI Asset Management.

He further added, "This strategic move has electrified the crypto community, fueling investor optimism about a potentially more accommodating regulatory landscape under Atkins' watch".

"It aligns with broader Republican advocacy for a lenient approach to the flourishing digital asset market", said Stephen Innes.

Despite having once branded cryptocurrencies a "scam", Trump changed his stance and has been a major advocate of the unit during his election campaign.

Elon Musk reportedly spent more than $100 million to help Trump regain the White House, repeatedly boosting his candidacy on his X social media platform.

"Layer on top expectations he will strip back regulations on the crypto industry and you begin to understand why investors have piled into the digital currency and related stock," said Dan Coatsworth, an analyst at investment group AJ Bell.

Among the measures expected from the sector is the creation of a strategic reserve of bitcoins in the United States, consisting mainly of tokens seized by the courts, which could push other countries to grant more legitimacy to the virtual currency.

And Samer Hasn, of XS.com, added that the prospect of relaxed regulation was fuelling "the hope of seeing cryptocurrencies integrate more deeply into the economic life" of the country.

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.

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