Since Trump won the US election, Bitcoin's market value has skyrocketed, quickly rising from about $70,000 per coin to over $100,000, an increase of more than 40%, setting a new historical record, surpassing silver and Saudi Aramco to become the seventh largest asset globally, 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 he would classify Bitcoin as a strategic reserve asset for the United States, making the US a superpower in Bitcoin. 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 prone to illegal activities. So why has his attitude changed so drastically in just five years? What impact will America's support for Bitcoin have?
Let's first look at the United States' 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 features decentralization, global reach, and anonymity, can be exchanged for various currencies, and can be used to purchase virtual or real goods, unrestricted in cross-border transactions and remittances. Its creation originated from solving equations; finding a particular solution allows one to obtain Bitcoin, with 19.74 million coins already mined globally.
Trump's change in attitude is evident; he began to accept the existence of Bitcoin in February 2024, stated in March that he would remove cryptocurrency regulations after being elected, in May his team accepted it as campaign donations, and in July, after making statements at the conference, the Republican Party submitted a Bitcoin bill proposing to sell gold reserves to purchase 1 million Bitcoins. Many of the cabinet members nominated after Trump's victory are supporters of Bitcoin, and Pennsylvania has also passed a bill proposing to allocate $700 million to purchase Bitcoin as a strategic reserve.
The purpose of this move by the United States is to solve the issue of national debt. Since the end of Clinton's term in 2001, the US national debt has continued to rise, reaching $36 trillion today. The national debt management mechanism is out of control, having increased from $35 trillion to $36 trillion in just over three months this year, while the US government's net fiscal revenue is $4.44 trillion, which is not even enough to cover half of the maturing debt, resulting in a $1.7 trillion debt gap. After attempting to classify Bitcoin as a strategic reserve asset, the US has engaged in massive global acquisitions, prompting other countries to follow suit, leveraging Bitcoin's limited total supply and supply-demand imbalance to drive up its market value, thereby harvesting global wealth to repay debts. Based on the current number of Bitcoins, to repay the $36 trillion debt, each Bitcoin would need to appreciate to over $1.84 million. International cryptocurrency experts predict that Bitcoin prices will soar after Trump takes office, and the US government will also control its price fluctuations.
Not all Americans support Bitcoin; American economist Prasad opposes it, arguing that its value is unstable and untrustworthy. Surveys show that only 5% of Americans trust Bitcoin, but American financial investors are attracted to its volatility, which facilitates capital manipulation and harvesting from retail investors, and they can also create momentum through public opinion to drive up prices.
For our country, we must resolutely oppose Bitcoin. China prohibits Bitcoin speculation due to its volatility and difficulty in regulation, which could severely impact the national financial order. The massive losses caused by cryptocurrency fraud in the US serve as a cautionary tale. Xinhua News Agency has also repeatedly criticized Bitcoin, and Chinese people need to firmly distance themselves from Bitcoin.
