Crypto boom Trump euphoria drives Bitcoin price above 100,000 dollars for the first time
If you had invested just one dollar in Bitcoin in October 2009, you would now be sitting on a treasure of 130 million. There seems to be no end to the rally. Nevertheless, consumer advocates warn.
05.12.2024, 04:49
05.12.2024, 05:23
dpa
No time? blue News summarizes for you
- A good 16 years after Bitcoin was founded, the cryptocurrency has surpassed the 100,000 dollar threshold for the first time.
- The oldest and best-known digital currency climbed sharply on Thursday night, breaking one all-time high after another.
- At one point, the price stood at 103,253 dollars.
- Investors are hoping that the winner of the election, Donald Trump, will implement crypto-friendly regulation.
- The party mood in the crypto scene was fueled by Trump's announcement that he would make crypto advocate Paul Atkins his preferred candidate to head the powerful US Securities and Exchange Commission (SEC).
A good 16 years after Bitcoin was founded, the cryptocurrency has surpassed the 100,000 dollar threshold for the first time. The oldest and best-known digital currency climbed sharply on Thursday night, breaking one all-time high after another. At one point, the price stood at 103,253 dollars. Bitcoin has gained enormously, especially since the US presidential election on November 4.
Bitcoin boom thanks to Donald Trump
Investors are hoping that the winner of the election, Donald Trump, will implement crypto-friendly regulation. The party mood in the crypto scene was fueled by Trump's announcement that he would make crypto advocate Paul Atkins his preferred candidate to head the powerful US Securities and Exchange Commission (SEC). The previous SEC chairman Gary Gensler, on the other hand, was known for his tough stance on digital currencies. Gensler announced on November 21 that he would step down from his post when Donald Trump enters the White House in January.
For many crypto investors, Gensler was a red rag. Under his leadership, the SEC generally enforced strict rules for transactions with digital currencies and cracked down on fraud involving crypto assets. Trump emphasized Atkins' affinity for crypto on his social media platform Truth Social: "He also recognizes that digital assets and other innovations are critical to making America greater than ever before."
Should Atkins actually become SEC chief, experts expect more crypto ETFs to be approved. So far, only Bitcoin and Ether are available as ETFs in the USA. The abbreviation ETF stands for Exchange Traded Funds. Smaller cryptocurrencies, so-called altcoins, also benefited from the speculation.
Following Gensler's departure, many crypto investors are not only hoping for more lax supervision, but are also betting that the new US government under Trump will invest a counterweight to the state gold reserve in Bitcoin. The US owns over 8100 tons of the precious metal worth around 670 billion dollars, making it the largest known gold investor in the world.
What could a US reserve in Bitcoin look like?
During the election campaign, however, it remained unclear whether Trump merely wanted to accumulate Bitcoin holdings confiscated from criminals in a crypto reserve or whether his government would actively buy up Bitcoin.
Republican Senator Cynthia Lumis from the US state of Wyoming, who is considered a confidante of Trump, had proposed buying a total of one million Bitcoin over a period of five years and holding it for at least 20 years. As the maximum amount of Bitcoins is limited to 21 million, this would be just under 4.8 percent of the total Bitcoin holdings.
Experts see the investment strategy of the US company MicroStrategy as another reason for the increase in the value of Bitcoin. Company boss Michael Saylor is considered a hardcore Bitcoin investor and has so far raised the equivalent of around 32 billion dollars in the digital currency with money from corporate bonds.
MicroStrategy recently announced the raising of new debt in the amount of 2.6 billion dollars. The debt will be issued in the form of convertible bonds and is reserved for institutional investors. MicroStrategy intends to invest the fresh capital in Bitcoin.
Gambling on the Bitcoin price
The fact that it is now also possible to trade Bitcoin options, i.e. bet on the future price trend, following the approval of Bitcoin ETFs in the US at the beginning of January also contributed to the recent price increase. This allows larger investors in particular to hedge against falling prices when entering the Bitcoin market.
Typically, so-called put options are used for this, i.e. a bet on falling prices for a small amount of money. This has been possible since this Wednesday. In addition, bets on rising prices, known as call options, can be used as a further vehicle for betting on higher Bitcoin prices with even greater risk.
On the first day of trading, options worth almost two billion dollars were traded on BlackRock's Bitcoin ETF alone. 82 percent of investors bet on rising prices (calls), while only 18 percent bet on falling prices.
Many private investors who previously avoided Bitcoin are now asking themselves whether they have missed out on a lucrative trend. Crypto influencers such as Roman Reher, who runs the Bitcoin channel "Blocktrainer" on YouTube, repeatedly says that it is never too late to get into Bitcoin. Despite major fluctuations, the Bitcoin price only knows one direction in the long term, namely upwards.
"Bitcoin is an object of speculation"
Consumer advocates nevertheless warn against getting caught up in crypto fever. According to the consumer advice center, no one can seriously predict whether Bitcoin, variants of it or other cryptocurrencies will prevail as an alternative to conventional monetary systems in the medium term. "The development in recent years has increasingly moved away from the idea of an alternative means of payment and towards an object of speculation."
Consumer advocates see several risks. "In particular, the massive price fluctuations up to total loss and the lack of security systems should be mentioned here." Bitcoin is therefore not recommended as a financial investment for consumers.
The consumer portal "Finanztip" also sees more risks than opportunities. "Trading bitcoins is highly speculative. The price has doubled within weeks, but has also halved again. There is no guarantee that you will be able to sell your Bitcoins at a profit in the future." They could also become completely worthless.
If you still want to buy Bitcoin, you should only use money that you can do without. "Your investment should not account for more than a maximum of ten percent of your total investment."