Bitcoin price rose above $100,000 for the first time on Thursday, continuing its post-election uptrend buoyed by the new Trump administration’s pro-crypto pledge.

According to cryptocurrency trading platform Coinbase, Bitcoin – one of the most popular decentralized digital assets on the market – was worth $69,374 on election day. Within a month the value had increased by more than 44 percent. Other cryptocurrencies such as Ethereum and XRP also rose sharply during this period.

The sudden rise in the value of cryptocurrencies is a sign of investor optimism about the policies of President-elect Donald Trump and his election to head several key regulators, some of which have explicitly promised to deregulate the crypto industry.

“Bitcoin reaching $100,000 reflects expectations of both policy support and regulatory space under the new administration,” said Ramaa Vasudevan, an economics professor at Colorado State University who is critical of crypto. “The nomination of crypto enthusiasts to management positions is a clear signal that the acceptance of Bitcoin and crypto is triggering the flood of money into these markets.”
Bitcoin’s rally is also a product of its increased legitimacy. Trump’s election may have sparked the rally, but the financial establishment’s acceptance of the asset in recent months has been the deciding factor. While Bitcoin was once a niche curiosity, it is now a mainstream digital currency that every everyday American can now purchase through reputable retail investor accounts. Even if Bitcoin ultimately turns out to be a bubble, as many economists have argued, these investment vehicles have ensured it some staying power.

The policies of the new Trump administration are fueling optimism

Trump was an ardent supporter of cryptocurrency during his last presidential campaign, and his decisions to lead key government agencies related to its regulation reflect that enthusiasm.

Bitcoin hit its highest value ever after Paul Atkins was appointed on Wednesday to head the Securities and Exchange Commission (SEC), which is responsible for regulating tradable securities such as stocks. Atkins previously served as SEC Commissioner for six years during the administration of former President George W. Bush.

Atkins is “not necessarily the burn-down type of candidate that Trump has chosen for other positions,” Molly White, a cryptocurrency researcher and critic, told Vox. “He’s pretty established; He has a background at the SEC, but was also a very strong proponent of deregulation when he was at the SEC and certainly since.” Atkins is also co-chair of the Chamber of Digital Commerce’s Token Alliance, an industry lobbying group advocates lax regulation of cryptocurrencies.

Perianne Boring, the CEO of the Chamber of Digital Commerce, is rumored to be one of Trump’s top picks for another key position: head of the Commodity Futures Trading Commission (CFTC), which sets rules for futures and commodities trading. Currently, the cryptocurrency is subject to SEC oversight, but the Trump administration is reportedly considering regulating it as a commodity instead. If this change is made, the cryptocurrency would fall under the purview of the CFTC, which is often viewed as more hands-off in its regulatory approach.

Billionaire crypto enthusiast David Sacks, whom Trump named as his crypto and AI czar on Thursday, will be tasked from the White House to help formulate crypto and AI policy. In this role, Trump said in a post on Truth Social, Sacks will work closely with the SEC and CTFC to develop a legal framework to regulate crypto.

Trump himself is also involved in cryptocurrencies through his family’s cryptocurrency and trading company, World Liberty Financial. Pro-cryptocurrency groups spent $245 million in this year’s election, more than any other industry, to support candidates across the country who are seen as more crypto-friendly.

All of this likely means that the regulatory landscape will be much friendlier to cryptocurrencies under a Trump administration following stricter regulations and a series of lawsuits against cryptocurrency companies during the tenure of current SEC Chairman Gary Gensler.

“The recent wave of investment in crypto is largely driven by a growing belief that years of regulatory uncertainty and litigation may finally be giving way to clarity,” said Christian Catalini, founder of the MIT Cryptoeconomics Lab.

Gensler’s SEC cracked down on trading platforms like Coinbase, Binance and Kraken, arguing that buying and selling cryptocurrencies should be subject to the same oversight as stocks or bonds and that investors should have access to the same information about crypto trading platforms and affiliates However, argue that crypto tokens are not the same as stocks and therefore should not be subject to the same regulations.

The SEC has filed lawsuits against several major crypto platforms, including Coinbase, which are still ongoing. However, they could be abolished under the Trump administration, and regulation of Bitcoin and other cryptocurrencies is likely to change significantly under Trump.

Under a Trump regulatory regime, cryptocurrency exchanges like Binance and Coinbase could operate with less risk of litigation, making it easier for people to trade on their platforms. Enthusiasts say this will spur innovation in the industry, but it could also mean individual traders using such platforms are more exposed to fraud, theft and the volatility of the currency.

Bitcoin has become a mainstream digital asset

Over the past five years, and particularly after the collapse of crypto trading platform FTX in 2022, the narrative around the utility of cryptocurrencies has changed. Now it is being touted as an investment vehicle rather than a currency that can be used like cash, White said. And this pivot also helps his evaluation.

In January, the SEC gave the green light to the first Bitcoin exchange-traded funds (or ETFs) in the US. ETFs are baskets of financial instruments (such as stocks, bonds, commodities, or in this case cryptocurrencies like Bitcoin or Ethereum) that are bought and sold on a regulated exchange.

ETFs offer anyone indirect access to cryptocurrencies when they decide to invest. Simply put, as the value of Bitcoin rises, the value of these ETFs rises too – but because of the pooled nature of ETFs and their presence on a regulated exchange, investors are better protected against losses if the value of Bitcoin falls. Companies such as BlackRock, Invesco, Fidelity, Grayscale and Ark Invest have launched Bitcoin funds, offering new investors, particularly those who may be more risk-averse, easy ways to purchase or gain exposure to cryptocurrencies.

Previously, investors had limited options for trading Bitcoin. You could buy Bitcoin directly on a cryptocurrency exchange, but you would then have to figure out how to store it safely and conveniently for the long term. (Cryptocurrencies held on an exchange can be vulnerable to theft, while cryptocurrencies stored offline are safer but more difficult to trade.) You could also invest in risky Bitcoin futures, agreeing to buy the currency at a specific price at a later date buy or sell. Now ETFs offer an establishment-backed option.

“While no one can predict the exact tipping point or when the price will stabilize, the long-term driver of Bitcoin’s rise is its evolution – not just as digital gold, but as a fundamental layer of the global financial infrastructure,” Catalini said.

However, Vasudevan said there is still reason to believe that the rise of cryptocurrencies will not last forever. Bitcoin has risen sharply before, only to suddenly crash. In November 2022, the value of Bitcoin fell by 20 percent to below $16,000 within a few days of the spectacular crash of the crypto exchange FTX. There remains concern that the price of cryptocurrencies is based solely on speculation and not on any inherent value.

“This has all the makings of another bubble, fueled by the prospect of a more favorable regulatory environment and the associated opportunities for new products and funds that can attract more and more people to these markets,” Vasudevan said.