Bitcoin has hit new highs by touching $83,000 for the first time ever as hopes surge that President-elect Donald Trump will support cryptocurrencies once he assumes control of the White House. The biggest cryptocurrency had touched an all-time high of $83,460, reflecting an impressive jump of 9% in this short space of time. And in this kind of surge, the value of Bitcoin has more than doubled from around $37,000 just one year ago.
The dramatic price rise in Bitcoin was fueled by growing markets reacting to the likely return of Trump to power and fueling speculation about policy shifts in favor of digital currencies. Dubbed “the Trump Trade,” this phenomenon spread throughout global financial markets since his victory became apparent. It is also a high-spending U.S. government, an event investors expect under Trump’s leadership, and which may pose a few hurdles for the Federal Reserve if it tries making interest rate cuts in its bid to favor a stronger dollar.
This moved the dollar up 0.6 percent against a trade-weighted basket of currencies Monday, as the euro slipped to its lowest level since May and fell 0.7 percent to $1.0641. Meanwhile, Sterling slid 0.46 percent to $1.2862. U.S. stocks continued their quest for new highs, while European equities continued to push upward as the world waits to see how these economies will benefit from the agenda of President Trump.
Trump has previously labeled Bitcoin as a “scam against the dollar,” but his rhetoric on cryptocurrencies seems to have changed after the 2020 election campaign. Indeed, within the context of his presidential run, Trump seemed to make an earnest push to win the hearts of crypto enthusiasts by attending industry events and providing hints regarding his supposed affection for digital assets. Such rhetoric change has sparked speculation that the administration will implement regulatory shifts that will ease the playing of the cryptocurrency market for retail investors.
Despite these high expectations, to date, no concrete policy on cryptocurrencies has been put forth by Trump, and market participants are left wondering what kind of future his administration will bring for digital assets. However, the speculations relating to his would-have-been regulatory stance have ushered in a wave of optimism and increased demand for Bitcoins and other cryptocurrencies accordingly.
It was designed to be an extremely valuable commodity since the inception of Bitcoin, especially because it has been used as a liquid, alternative asset in light of the inflationary fears and general insecurity in the global economy. Most importantly, now that it has become a store of value, gold looks so envy-like to institutional and retail investors: the last resort of hedging their activities from volatility in the old financial markets as it is with gold.
Other UK-related news is a nod to UK bank NatWest, which has come under some attention recently as part of the latest round of share buyback to recover £1 billion in shares from the UK government. That is part of the continued privatization of the bank, which was bailed out during the financial crisis of 2008. The UK government holding in NatWest will be reduced from 14.2% to 11.4% when the share buyback at a price of about £3.81 per share goes ahead.
This is considered a landmark sale for the government as it has recovered more than £20 billion in the disposal of the shares of NatWest, previously known as the Royal Bank of Scotland. The institution had been partially nationalized after a £46 billion bailout in 2008 when the government intervened in preventing the institution from going under then due to the financial meltdown. The latest buybacks bring NatWest closer to complete privatization, a process that has been in progress for years.
In light of the ever-growing market of cryptocurrencies and the continued restructuring by institutions like NatWest in traditional finances, key developments regarding the future of both digital and traditional financial systems will take shape in the following months. Such is making naysayers hold on with the hope that change can show new avenues for growth in this steadily increasing world economy.
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