Last January, the US Securities and Exchange Commission (SEC) approved exchange-traded funds (ETFs) for spot bitcoin. These have subsequently experienced strong growth and have also contributed to a significant increase in the price of bitcoin. The cryptocurrency has also recently benefited from Donald Trump’s victory in the US presidential election. The Trump administration is expected to take a more accommodating stance towards the cryptocurrency industry.
Bitcoin ETFs attract billions of dollars of investment
The Exchange Commission has long rejected requests to launch a bitcoin spot ETF, arguing that the cryptocurrency market is susceptible to manipulation. It finally gave approval to launch 11 funds last January 10. The new funds, which began trading on January 11, 2024, have opened up the bitcoin market to millions more users from retail and large investors and attracted billions of dollars in investment.
The value of the BlackRock-run iShares Bitcoin Trust, for example, has climbed to more than USD 50 billion in 11 months, Bloomberg reported. Current SEC Chairman Gary Gensler is seen as an enemy of cryptocurrencies. Last January, when approving a bitcoin spot ETF, he issued a warning about the risks associated with the cryptocurrency. “Investors should remain cautious because of the myriad risks associated with bitcoin and with products whose value is tied to crypto,” he wrote at the time.
Trump’s victory and the planned appointment of Atkins boosted bitcoin
Trump announced during the election campaign that he intended to replace the SEC chief. He also promised to create a strategic stockpile of the cryptocurrency bitcoin and encourage its domestic mining to make the United States a hub for the technology. Bitcoin and other cryptocurrencies responded to Trump’s victory in the November presidential election with strong growth. In early December, Trump announced his intention to appoint Paul Atkins, who is considered a cryptocurrency advocate by agencies, to head the SEC. The exchange commission had announced in November that Gensler would step down on January 20, the day Trump takes office as president.
The price of bitcoin surpassed the psychologically important USD 100,000 mark for the first time a few hours after the news of Atkins’ planned appointment to head the SEC. The price of bitcoin first crossed USD 10,000 in November 2017. In February 2021, it broke USD 50,000 for the first time. Bitcoin is the best-known and most widely used cryptocurrency. Its main feature is that it has no central authority to control, for example, the amount of money in circulation. Bitcoin is designed so that no one, not the author or other individuals, groups or governments, can influence it, destroy it, counterfeit it, seize accounts, control money flows or cause inflation.
Source: Reuters
