Bitcoin Surges Past $100,000: Trump's Crypto Future and the Game for Dollar HegemonyOn December 5th, Bitcoin's price breached the $100,000 mark, setting a new all-time high and pushing its total market capitalization beyond $2 trillion. This propelled it to become the world's seventh-largest asset, surpassing the combined market value of numerous large publicly listed companies, including China Mobile and Bank of China
Bitcoin Surges Past $100,000: Trump's Crypto Future and the Game for Dollar Hegemony
On December 5th, Bitcoin's price breached the $100,000 mark, setting a new all-time high and pushing its total market capitalization beyond $2 trillion. This propelled it to become the world's seventh-largest asset, surpassing the combined market value of numerous large publicly listed companies, including China Mobile and Bank of China. This event garnered global attention, its underlying causes intricately woven together and deeply connected to the policy stances of former US President Donald Trump, and more broadly, the future trajectory of dollar hegemony and the global financial system.
Trump's Crypto "Honeymoon": From Opposition to Strong Support
Trump's stance on cryptocurrency underwent a dramatic 180-degree turn. In 2019, he publicly criticized Bitcoin, citing its volatile value and susceptibility to illicit activities, while opposing Facebook's Libra project. However, as Bitcoin's market capitalization soared and it secured a spot amongst the world's top assets, Trump's attitude shifted significantly.
During his campaigns, Trump repeatedly expressed support for cryptocurrency. He hosted NFT dinners, publicly embraced cryptocurrencies, met with Bitcoin mining representatives pledging his support, and even delivered a keynote speech at the Bitcoin 2024 conference, promising to appoint crypto-friendly regulators and establish a national strategic Bitcoin reserve upon assuming office. Significantly, he actively leveraged cryptocurrencies and their derivatives for personal and familial gain. His wife and children earned $22 million from selling Trump-branded digital trading cards NFTs, and his campaign accepted political donations from cryptocurrency companies. Prominent crypto figure Sun Yuchen's $30 million investment in Trump-endorsed cryptocurrency WLFI also generated substantial profits for the Trump family.
Trump's transformation wasn't accidental. He needed to diversify his campaign's funding sources, and wealthy cryptocurrency companies presented a significant opportunity. Conversely, cryptocurrency supporters saw potential in Trump's political prospects and were willing to invest in him. This mutually beneficial relationship positioned Trump as the ideal cryptocurrency spokesperson, earning him the moniker "Bitcoin President."
Since Trump's election victory, Bitcoin's price steadily climbed, surpassing $80,000 and $90,000 before reaching $100,000. The Trump team even discussed creating a dedicated cryptocurrency policy position within the White House, highlighting the industry's influence on the new administration. Trumps nomination of Atkins, a crypto-friendly candidate, as the new chair of the Securities and Exchange Commission further solidified this trend. Atkins' promise to reduce cryptocurrency regulation and lessen penalties for violations directly contributed to Bitcoin's price surge.
Trump's "Bitcoin Superpower" Plan: A 1 Million Bitcoin National Reserve
Trump aimed to establish the US as a "Bitcoin superpower" and the "global cryptocurrency capital." He planned to purchase 200,000 Bitcoins annually for five years, ultimately creating a national reserve of 1 million Bitcoinsapproximately 5% of the total Bitcoin supply. He also envisioned utilizing cryptocurrency to address America's $35 trillion national debt and even to lessen the sentence of Ross Ulbricht, the founder of Silk Road.
Behind the Bitcoin Price Surge: Halving Mechanism, ETFs, and Fed Policy
Beyond the Trump factor, other elements contributed to Bitcoin's price increase:
- Four-Year Halving Mechanism: The Bitcoin network halves its mining reward every four years, interpreted by the market as a signal of reduced supply, fueling price increase expectations.
- Bitcoin ETF Funds: The launch of Bitcoin spot ETFs lowered the barrier to entry, attracting more mainstream investors.
- End of the Fed's Interest Rate Hike Cycle: The Fed's rate cuts injected liquidity, increasing economic uncertainty and prompting investors to seek safe-haven assets like Bitcoin.
The Convergence of Traditional Finance and Cryptocurrency: Bitcoin's Institutionalization
Over the past three years, traditional finance investors have become major Bitcoin investors, aligning Bitcoin's price trajectory with that of mainstream US assets. The approval of Bitcoin spot ETFs marked a landmark event, signifying the formal acceptance of Bitcoin into the US mainstream financial system. The participation of major financial institutions like BlackRock and Fidelity further accelerated this trend.
A "Dollar + Cryptocurrency" Dual System: Continuation and Transformation of Dollar Hegemony?
Trump's support for cryptocurrency wasn't simply about embracing innovation; it was about preserving dollar hegemony by integrating it with cryptocurrency to create a new global financial system. He threatened BRICS nations, stating that the US would impose a 100% tariff if they attempted to create a currency to replace the dollar. In his view, the future global financial system would be a "dollar + cryptocurrency" dual system.
Cryptocurrency would serve as an adjunct to the dollar, a conduit for suppressing other currencies and draining resources from other nations. If the US allowed direct cryptocurrency trading of stocks and treasury bonds, the global financial system could be restructured. Nations with limited profit opportunities or lax regulatory frameworks would face increased capital flight. This would essentially allow the US to use countless straws to directly siphon wealth from other countries.
Expert Opinions and Future Outlook
While Trump's crypto support offers greater potential for its future development, uncertainties remain regarding whether he will fulfill his promises and the precise role Bitcoin will play within the US financial system. US government regulation of cryptocurrency, Fed policy, and global geopolitical dynamics will significantly impact Bitcoin's price. Whether the Trump administration would genuinely incorporate Bitcoin into strategic reserves, and how this will affect the global financial landscape, requires further observation. The feasibility of a "dollar + cryptocurrency" dual system and its economic implications also warrant in-depth analysis.
In conclusion, the surge of Bitcoin past $100,000 reflects an intricate interplay of political and economic factors, embodying Donald Trump's personal political strategies and the struggle for dollar hegemony. Its future trajectory will have profound implications for the global financial system.
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