Leading super PACs have invested $131 million in congressional candidates with the aim of electing legislators who support cryptocurrency. As a result, 274 cryptocurrency supporters were elected to the House of Representatives, which is over 60% of the total number of members. 20 senators supporting the development of digital currencies have made it to the U.S. Senate. Therefore, in the coming years, the adoption of the regulatory framework necessary for the broader use of Bitcoin and other cryptocurrencies in the U.S. financial system can be expected. Additionally, Trump is expected to replace the current chairman of the Securities and Exchange Commission (SEC) Gary Gensler, known for his skeptical and somewhat hostile attitude towards crypto assets. According to Bloomberg, Trump's team is already discussing the creation of the position of 'crypto czar' — the chief coordinator of White House policy regarding cryptocurrencies.
Another solution promoted by crypto lobbyists may be to transfer part of the federal oversight of the industry from the SEC to the Commodity Futures Trading Commission (CFTC). In May 2024, the House of Representatives approved the appointment of the CFTC as the main regulator of digital assets. If the final consideration of the bill by the new Congress leads to a favorable outcome for lobbyists, the entire digital asset industry will face significant changes.
It should not be forgotten that the elected president of the United States is personally interested in the rise in cryptocurrency prices: in September, he announced the creation of a cryptocurrency company, World Liberty Financial, along with his sons. And although the organization's website states that neither Donald Trump nor his family members are officials, directors, founders, or employees of the company, its connection to the elected president is hard to deny. The conflict of interest is evident, but it is not the first time Trump has balanced on the edge of the law.
Strategic Reserves
One of Trump's promises is to create a national strategic reserve of bitcoins. Speculators on the cryptocurrency prediction platform Polymarket estimate the likelihood of this idea being implemented at over 40%. A corresponding bill has already been proposed for consideration in Congress: it suggests creating a strategic reserve of 1 million bitcoins over five years — about $97 trillion at current prices. It is assumed that such a maneuver will help reduce the rapidly growing U.S. national debt, which has reached nearly $36 trillion. Clearly, if such a law is passed, demand for bitcoins will significantly increase, raising the prestige and trust in this type of asset.
Notably, the author of the bill, Senator Cynthia Lummis, hopes that her proposal can be passed within the first 100 days after Trump's return to the White House. There is a chance, as even among Democrats, this idea enjoys support. For example, it was backed by leftist Democrat and active participant in Senator Bernie Sanders' presidential campaign, Congressman Ro Khanna, who noted that the growth potential of Bitcoin makes it an interesting choice for the Federal Reserve.
Proponents of the initiative argue that the decentralized nature of Bitcoin and its fixed supply make it a reliable hedge against inflation and an asset comparable to gold. They also believe that the law on the strategic reserve of bitcoins would enhance fiscal stability by diversifying government investments. However, this idea has many opponents who point to Bitcoin's high volatility as a primary risk. There are other concerns as well: cyberattacks that could destroy the entire strategic reserve, environmental damage from mining, which requires colossal amounts of energy. It is known that at least 91 TWh of electricity is consumed annually for Bitcoin mining, which is more than the consumption of a country like Finland. Other studies suggest this number could be significantly higher — around 170 TWh.
Experts from the financial world are also skeptical about the Bitcoin reserve. Dr. Arash Alush, an associate professor of finance and fintech at Dublin City University, noted that this would require significant changes in regulation, as well as support from numerous conservative agencies wary of highly volatile decentralized assets. Moreover, Bitcoin's limited market capitalization, which is less than $2 trillion, does not provide the investment potential necessary for a reserve asset. Large-scale purchases by the government would lead to a rise in the price of the cryptocurrency, thus increasing costs. The issues of budget deficit and national debt would only worsen.
#BTC☀ #Forbes #CryptoNewsCommunity #Bitcoin110KNext? #TrumpCryptoSupport
