Since Trump won the U.S. election, Bitcoin's market value has soared from about $70,000 per coin to over $100,000, an increase of over 40%, setting a new historical record, surpassing silver and Saudi Aramco to become the world's seventh-largest asset, with a total value of nearly $1.93 trillion.
The explosive appreciation of Bitcoin is closely related to Trump's supportive statements. At the Bitcoin conference in July 2024, Trump declared that Bitcoin would be classified as a strategic reserve asset for the United States, making the U.S. a Bitcoin superpower. On that day, the price of Bitcoin rose from $67,000 to $69,000. However, in 2019, Trump strongly opposed Bitcoin, believing its value was unstable and it could facilitate illegal activities. So why has his stance changed so dramatically in just five years? What impact will the U.S. support for Bitcoin have?
Let’s first look at the U.S. cryptocurrency strategy. Bitcoin was proposed by Satoshi Nakamoto in 2008 as a P2P form of digital cryptocurrency, with a fixed total supply of 21 million coins. It is characterized by decentralization, globality, and anonymity, can be exchanged for various currencies, and can be used to purchase virtual or real items, without restrictions in cross-border transactions and remittances. Its creation is based on solving equations; finding special solutions allows one to obtain Bitcoin, with 19.74 million coins already mined worldwide.
Trump's change of attitude is evident. Beginning in February 2024, he accepted the existence of Bitcoin, in March, he stated that he would abolish cryptocurrency regulation after being elected, by May his team accepted it as campaign donations, and in July, after his statement at the conference, the Republican Party submitted a (Bitcoin Bill), suggesting selling gold reserves to purchase 1 million Bitcoins. Many cabinet members nominated after Trump's victory are Bitcoin supporters, and Pennsylvania has also passed a bill proposing to allocate $700 million to buy Bitcoin as a strategic reserve.
The purpose of the United States' actions is to address the national debt issue. Since the end of Clinton's term in 2001, the U.S. national debt has continued to rise, now reaching $36 trillion. The national debt management mechanism is out of control, increasing from $35 trillion to $36 trillion in just over three months this year, while the U.S. government's net fiscal revenue is $4.44 trillion, hardly enough to cover even half of the national debt due, resulting in a $1.7 trillion debt gap. After attempting to classify Bitcoin as a strategic reserve asset, the U.S. has been making large-scale acquisitions globally, prompting other countries to follow suit, leveraging Bitcoin's limited supply and imbalanced demand to drive market capitalization up, thus harvesting global wealth to repay its debts. According to the current Bitcoin quantity, to repay the $36 trillion debt, a single Bitcoin would need to appreciate to over $1.84 million. International cryptocurrency experts predict that after Trump takes office, the price of Bitcoin will soar, and the U.S. government will also control its price fluctuations.
Not all Americans support Bitcoin; U.S. economist Prasad opposes it, arguing that its value is unstable and unreliable. Surveys show that only 5% of Americans trust Bitcoin, yet U.S. financial investors are attracted to its high volatility, which allows for capital manipulation and harvesting retail investors, and they can also inflate prices through public opinion.
For our country, we should firmly oppose Bitcoin. China prohibits Bitcoin speculation, as its volatility and difficulty in regulation can severely impact the national financial order. The massive losses caused by U.S. cryptocurrency fraud serve as a cautionary tale. Xinhua News Agency has also criticized Bitcoin multiple times, and the Chinese must resolutely distance themselves from Bitcoin.
