The Trump effect ignites the crypto world! Bitcoin breaks through $100,000; is it a wealth opportunity or a new 'bubble'?
Since Trump's re-election, the financial asset that has reacted most vigorously in the market is undoubtedly Bitcoin, rising from $68,000 to $100,000 in just one month. Some analysts on Wall Street have even claimed that Bitcoin will reach $225,000 within two years.
Fellow crypto enthusiasts, the moment of witnessing history has arrived! At the very moment the news of Trump's victory broke, the entire cryptocurrency market exploded like a lit powder keg. Bitcoin surged and broke through the $100,000 mark, a number that would have been unimaginable in the past but has now become a reality; Ripple also didn't hold back, with prices skyrocketing, and the steep growth curve made people feel excited. This wave of 'Trump fever' in the crypto world is not just minor skirmishes, but hides many worthwhile insights to explore.
Multiple violent fluctuations, yet none have been eliminated.
Bitcoin, as the earliest and most famous virtual currency, was created in 2008 after the financial crisis and the Federal Reserve's monetary expansion by a small group of idealistic tech enthusiasts. Their goal at that time was to create a new currency to replace the dollar, free from the control of central bank printing presses. Therefore, in their initial thoughts, the issuance of Bitcoin was only limited by mathematics and energy, and it should have all the functions of a normal currency, such as acting as a payment tool.
A widely circulated example later was that a Bitcoin enthusiast once successfully bought a pizza with Bitcoin; today, this might be considered the most expensive pizza in history.
In 2010, a user with the ID Laszlo posted that he successfully bought two large pizzas for 10,000 Bitcoins.
In today's technologically advanced world, governments are increasingly strict in their financial regulations dominated by banks. The large gray and black markets face greater restrictions and higher costs when trying to mobilize massive funds through the banking system. The emergence of virtual currencies like Bitcoin meets the needs of the underground economy: large sums can flow almost costlessly and instantaneously through a piece of electronic data, even crossing geographical boundaries, while avoiding the surveillance of various governments—this is also a major reason why virtual currencies have survived multiple violent fluctuations without being eliminated.
Another group viewing virtual currencies as a store of value treats Bitcoin as a purely speculative asset to trade. For these speculative funds, as long as an opportunity to speculate arises, whether the target is tulips, Pu-erh tea, land on the moon, or electronic data in virtual spaces, it doesn't matter. Moreover, virtual currencies possess an endless array of speculative themes and an unceasing stream of buyers, making them one of today's hottest speculative assets.
Cryptocurrency tycoon Justin Sun eats a banana auctioned for $6.2 million.
Before the 2024 U.S. presidential election, Trump frequently engaged with American investors in virtual currencies, facilitated by Silicon Valley tycoons. To secure these investors' funds and voting support, Trump promised to lift legal regulatory restrictions on the virtual currency industry after being elected president, and even to officially support the development of the virtual currency industry.
Thus, when the election results began to show signs of Trump's victory, the enthusiasm of speculative funds was ignited, and Bitcoin's price surged rapidly. As it rose, rumors in the financial market began to become absurd, one widely circulated rumor being that Trump would ask the Federal Reserve to purchase $1 trillion worth of Bitcoin as central bank reserves. Coincidentally, at the moment this rumor began to be wildly forwarded, it was also when Bitcoin surged toward $100,000 only to reverse.
According to American political tradition, after Trump took office, he would indeed provide certain preferential treatment to investors in his virtual currency, such as the aforementioned Lutnik being nominated as Secretary of Commerce; the ongoing investigations by U.S. regulatory agencies into virtual currency companies might also be temporarily halted.
Another 'story' supporting the speculation of Bitcoin is the so-called acquisition of Bitcoin by the Federal Reserve as a reserve asset.
Of course, Trump himself or some of his advisors might push for similar policies out of their own interests or cognitive preferences, but the massive establishment managers of the American financial system would likely scoff at such ideas.
For these actual controllers of the financial system, the U.S. has already achieved dollar hegemony and the 'freedom' to operate the printing press; what necessity is there to return to a so-called 'Bitcoin standard' like the past gold standard, restricting their own ability to operate the printing machine?
And stepping back, suppose Trump really intends to use Bitcoin as a reserve asset; from a purely policy perspective, Fed Chairman Powell is unlikely to be directly dismissed by Trump before his term expires in 2026. If Trump hopes to replace him with a new, obedient Federal Reserve Chairman, he will also have to wait until 2026 to successfully make a change, after which it might be possible to promote the so-called Bitcoin policy.
Therefore, for now, this is just an unattainable story. Perhaps for this reason, in the future, the rumor that 'the Federal Reserve will reserve Bitcoin' will surely be brought up repeatedly as a speculation topic.
Federal Reserve Chairman Powell.
Here are my thoughts.
For newcomers, while it's tempting, hold back and don't impulsively gamble everything. Calm down and read a few good introductory books on blockchain to understand the technical logic behind cryptocurrencies; spend more time in professional forums and communities, learning to read candlestick charts and analyze indicators from reliable experts; ensure that the money you invest is spare cash that you won't need in the short term, and don't gamble with your life savings. As for experienced players, now is a good time for refined positioning, reduce holdings of some high-value bubble coins, and dig deep into promising niche markets, such as Web3 social, privacy computing, and these emerging fields; skillfully use hedging tools to give your positions 'insurance', unafraid of major market fluctuations.
Since Trump took office, he has indeed stirred the deep waters of the crypto world, bringing unprecedented opportunities, but the accompanying risks have also shadowed closely. In this wave of cryptocurrencies, some can ride the waves and fill their coffers, while others may falter and sink with a moment's carelessness. I hope everyone reading this tweet can be a bit more sober and a bit less reckless. If you encounter bizarre projects, struggle to gauge the market, or possess exclusive investment techniques, feel free to speak out in the comments; let's collaborate to play the game of the crypto world well and strive for financial freedom together! Perhaps the next successful investment story shared could be from you in front of the screen!