After Trump's victory, the cryptocurrency market experienced a wave of strong growth.
Recently, Bitcoin approached the $100,000 mark, with an annual increase of over 100%;
On December 2, XRP surged 15% to $2.5; since Trump's victory, its market value has increased by over $100 billion, making it the third largest cryptocurrency.
Unlike the Biden administration's crackdown on crypto assets, Trump frequently expressed support during his campaign for designating Bitcoin as a strategic reserve asset for the U.S., vowing to make America the "cryptocurrency capital of the world."
Trump's election has ignited speculative enthusiasm throughout the cryptocurrency market. How will his second term impact the development of the cryptocurrency industry? How long can the cryptocurrency market's 'Trump frenzy' last?
Cryptocurrency frenzy
At the end of November, Bitcoin briefly reached a high of $99,000, setting a new historical record. As of December 3, the price of Bitcoin remained around $95,000, with a year-to-date increase of 116%, a total market value of about $2 trillion, surpassing silver again to become the eighth largest asset in the world.
Ethereum is the second-largest cryptocurrency after Bitcoin. Since Trump's victory, Ethereum's price has risen significantly, outperforming Bitcoin, but it has yet to reach a new high. Currently, Ethereum is trading at around $3,750.
According to data compiled by Bloomberg, in the just-past November, the monthly net inflows of funds into Bitcoin and Ethereum ETFs both set records, reaching $6.5 billion and $1.1 billion respectively. Last Friday (November 29), the subscription volume for the Ethereum ETF also hit a single-day historical high.
Not only have Bitcoin and Ethereum performed well, but the entire cryptocurrency market associated with them has also experienced a wave of excitement. XRP's market value surged from less than $30 billion in early November to over $137 billion, making it the third largest cryptocurrency; Dogecoin, supported by Trump's ally Elon Musk, has surged over 150%.
Data from CoinGecko shows that since Trump won the election, the total market value of the cryptocurrency market has increased by approximately $1.2 trillion, currently exceeding $3.2 trillion.
"There is a trend in the cryptocurrency market: initially, Bitcoin's price rises, but other tokens also rise with it," said Caroline Bowler, CEO of the digital asset exchange BTC Markets, noting that based on the influx of investor funds into digital asset exchanges, cryptocurrency trading activities have not yet peaked.
Government endorsement?
The recent enthusiasm in the cryptocurrency market over the past month is closely tied to Trump's proactive stance on cryptocurrencies during his campaign and his own involvement in cryptocurrency trading.
At the end of September, Trump and his three sons announced their latest entrepreneurial project, World Liberty Financial. This new enterprise is described as a decentralized finance (DeFi) currency market platform and launched a proprietary cryptocurrency called WLFI.
However, Trump's rapid deployment in the cryptocurrency sector has raised concerns about conflicts of interest. Forbes noted that as a presidential candidate, Trump's launch of a personal cryptocurrency platform could conflict with his policy-making responsibilities. Furthermore, WLFI's governance tokens (note: governance tokens grant holders voting rights regarding issues of managing blockchain projects' development and operations) are only open to accredited investors with a net worth exceeding $1 million or an annual income exceeding $200,000, which contradicts the egalitarian spirit of Bitcoin.
Trump was previously a skeptic of cryptocurrencies but has now raised the banner of promoting them during this year's campaign, a shift mainly due to the substantial political donations provided by the cryptocurrency industry and ongoing lobbying efforts from industry figures.
Data from the U.S. Federal Election Commission shows that political action committees (PACs) related to the cryptocurrency industry and other organizations supporting the industry have raised over $245 million for the 2024 election. According to a report from the non-profit watchdog Public Citizen, cryptocurrencies accounted for nearly half of the total funds raised for the election, with no other industry being able to compare.
The investment in the cryptocurrency industry is not just a simple donation but has also contributed to the formation of the most cryptocurrency-friendly Congress in U.S. history. According to the latest tracking by the Stand With Crypto alliance, nearly 300 cryptocurrency-supporting lawmakers will take office in the House and Senate.
Trump has promised on multiple occasions that if elected president again, he will wholeheartedly embrace cryptocurrencies and plans to make the U.S. a "Bitcoin superpower" and the "global cryptocurrency capital." He even boldly suggested that the U.S. could reduce its soaring $34 trillion national debt through Bitcoin. At a campaign rally, Trump jokingly said, "We can give them a little Bitcoin, and that will solve our debt problem."
In July of this year, Trump spoke at the largest annual conference in the cryptocurrency industry—the 2024 Bitcoin Conference—stating that he would classify Bitcoin as a strategic reserve asset for the U.S., specifically by using the Bitcoin currently held by the government to establish this reserve plan. The estimated number of these Bitcoins is about 200,000, valued at around $18 billion, most of which were seized during criminal activity.
Senator Cynthia Lummis has been a key supporter of this plan. In July of this year, she proposed a Bitcoin bill that proposed establishing a decentralized Bitcoin vault network managed by the U.S. Treasury. The bill outlines a plan for the government to acquire up to 200,000 Bitcoins annually over the next five years, potentially accumulating a total of 1 million Bitcoins, accounting for about 5% of the total Bitcoin supply.
Arash Aloush, an assistant professor of finance and fintech at Dublin City University in Ireland, stated, "The concept of a U.S. 'strategic Bitcoin reserve' is groundbreaking, but under current conditions, it is highly unlikely to become a reality. Establishing such a reserve would mean the U.S. government officially supports Bitcoin, potentially investing public funds into Bitcoin and recognizing it as a national asset, which is inconsistent with the government's cautious stance on cryptocurrencies so far."
Regulatory changes
(The Wall Street Journal) pointed out that Trump returning to the White House means that cryptocurrencies will enter a new era, with reduced government regulatory barriers.
Trump plans to nominate several cryptocurrency-supporting officials to the financial regulatory agencies and has promised to fire Gary Gensler, the chairman of the U.S. Securities and Exchange Commission (SEC), who has maintained a strict regulatory stance toward cryptocurrencies.
The SEC is one of the main regulatory bodies in the U.S. cryptocurrency space, and during Gensler's tenure, the SEC tightened its stance toward the crypto industry and launched a series of high-profile lawsuits against crypto-related companies. 2023 has been a peak year for SEC enforcement actions, with data showing that the SEC initiated a total of 784 enforcement actions in the 2023 fiscal year, suing multiple unregistered cryptocurrency asset issuers, platforms, and intermediaries.
Gensler believes that most cryptocurrencies are securities and is trying to prompt compliance through enforcement actions. He has repeatedly pointed out in public that cryptocurrencies are "fraught with fraud, scams, bankruptcies, and money laundering."
Last month, Gensler announced that he would step down on January 20, the day of Trump's inauguration, although his term was originally set to end in June 2026.
(The Wall Street Journal) pointed out that the next chair of the U.S. SEC is likely to provide favorable solutions for cryptocurrency exchanges. Lawyers seen as successors to Gensler are positioning themselves as critics of Gensler's lawsuits.
Potential candidate and former Chief Counsel of the SEC Robert Stebbins stated that the SEC should suspend most cryptocurrency lawsuits while clearing a path for companies to operate without litigation burdens. Stebbins said, "As long as there are no fraud claims involved, the SEC is likely to drop these cases in the future."
On December 2, CNBC reported that Coinbase's senior policy director expects that once Trump becomes president, Congress will quickly pass regulatory legislation regarding the cryptocurrency industry.
Faryar Shirzad, Chief Policy Officer of Coinbase, stated that Trump has previously expressed clear support for cryptocurrencies, and at the same time, the Republicans have gained control of both the House and Senate, which should make the process of Congress approving cryptocurrency-related legislation smoother.
"We have the most cryptocurrency-friendly Congress in history and a president who is very supportive of the crypto industry about to take office," Shirzad said. "This combination should ultimately allow the 50 million Americans who own cryptocurrencies to express their interests and voices in policy."
Currently, the U.S. Congress is considering passing two key pieces of legislation related to cryptocurrencies. One is the (21st Century Financial Innovation and Technology Act), initiated by Republicans, aimed at establishing a legal framework for digital assets, which has already passed the House earlier this year; the other is the (Stablecoin Transparency Act), which aims to establish a regulatory regime to provide licenses to issuers of stablecoins (tokens pegged to the value of fiat currencies like the U.S. dollar), which has not yet passed a vote in the House.
Additionally, Trump's team is considering whether to establish a new position in the White House specifically responsible for cryptocurrency policy, with the appointee leading a small team and acting as a liaison between Congress, the White House, and various cryptocurrency regulatory agencies.
Beware of risks
In recent years, the cryptocurrency industry has experienced extreme price fluctuations. At the onset of the COVID-19 pandemic, Bitcoin's price was just above $5,000. Less than two years later, in November 2021, it surged to nearly $69,000, but then plummeted during a series of aggressive interest rate hikes by the Federal Reserve aimed at curbing inflation. In 2022, the globally renowned cryptocurrency exchange FTX faced a liquidity crisis that ultimately led to its collapse, severely undermining investor confidence in cryptocurrencies as a whole.
From the beginning of this year until now, Bitcoin has surged by over 100%, but the short-term extreme volatility once again exposes the fragility and high risks of the cryptocurrency market. From the evening of November 25 to the early morning of November 26, Bitcoin's price experienced violent fluctuations, rising to around $99,000 before suddenly plummeting, with a drop of over 6% in just a few hours, falling below $93,000, causing over 170,000 people to be liquidated, with total liquidation amounts reaching $547 million. Other cryptocurrencies also experienced varying degrees of decline, with Dogecoin, Cardano, and others falling over 9%.
Susannah Streeter, head of funds and markets at Hargreaves Lansdown, recently stated: "Investors should only use funds they are prepared to lose to venture into cryptocurrencies, as we have seen such extreme volatility in the past."
Vanessa Lyon from the Boston Consulting Group stated: "Although Trump's support may bring short-term benefits, improper regulation could lead to greater market risks."
GoUpSec analyst FunnyG believes that as Bitcoin prices continue to hit new highs, the number of cybercrime activities closely related to the cryptocurrency market and the scale of losses will significantly increase. In recent years, cryptocurrencies have gradually become a core tool for cybercrime, used for money laundering, ransomware payments, online and telecommunications fraud, and other activities. According to the latest report from Chainalysis, the amount of illegal transactions related to cryptocurrencies has surpassed $20 billion in 2023, setting a new historical high. It can be said that the 'cybercrime bull market' for cryptocurrencies has already started ahead of the market.#ETH持续飙升 
