Crypto’s Rise During Trump’s Time
The world of digital money, known as cryptocurrency, has been buzzing lately. Some people call this sudden growth the “Trump effect,” because it happened during Donald Trump’s time as president. When Bitcoin’s price went past $100,000 after Trump’s re-election, many people started wondering if this crypto boom would last or if it was just a short-term thing.
In this report, we’ll look at what’s causing this crypto boom and try to figure out if the “Trump effect” can continue.
What’s Behind the Crypto Boom?
Several things have helped make cryptocurrency more popular during Trump’s time:
1. Trump’s Support and Less Rules
Trump and his team have been supportive of digital currencies. They’ve also tried to make fewer rules for them. This has made investors more confident. When important people, like Howard Lutnick, who Trump wanted to be Commerce Secretary, support crypto, it shows that the government is serious about it.
2. Banks Getting Involved
If some banking rules, like SAB121, are taken away, banks might be able to keep cryptocurrencies on their books. This could make crypto more mainstream and attract more investment.
3. Clear Rules
Trump’s team has been working on making rules for crypto clearer. An executive order about crypto assets wants to define where these rules apply and make public blockchains more open. This can help more people and companies feel safe using crypto.
Challenges and Dangers
Even though crypto is becoming more popular, there are still some problems and risks to think about:
1. Keeping Crypto Safe
Making fewer rules could make crypto less safe. With less regulation, there might be more fraud and bad people trying to take advantage. In 2023, when there were stricter rules, $5.6 billion was lost to crypto scams. So, it’s important to find a good balance.
2. Market Changes
As the crypto market grows quickly, it might become more unpredictable. This could be risky for people who don’t know much about investing. But this is normal when something is growing fast, and we need to manage it carefully.
3. New Technology
Something called quantum computing could be a big threat to some cryptocurrencies, like Bitcoin. It might be able to break the codes that keep crypto safe. This is a long-term problem that the crypto world needs to think about.
Can the Crypto Boom Last?
In the end, we think the “Trump effect” has helped crypto a lot, but whether it will last depends on many things. The government needs to find a good balance between making fewer rules and keeping people safe. They also need to deal with security problems and new technology. If they can do this, crypto could bring a lot of economic growth and new technology. But if they don’t, it could cause financial problems.
As the U.S. tries this crypto experiment, it’s important to find the right balance between letting it grow and making rules. If done right, crypto could bring a lot of good things. But if not, it could cause problems.
Sources: Worth, Happy Scribe, National Law Review