From outsider to the Oval Office, bitcoin surges as a new administration embraces crypto

Hey there, time traveller!
This article was published 05/12/2024 (677 days ago), so information in it may no longer be current.

NEW YORK (AP) — Born from the ashes of the 2008 global financial crisis, bitcoin arrived after trust had withered in the financial system and in Washington’s ability to protect those who must participate in it. Now, it’s Washington’s very embrace of bitcoin that’s helping to send its price to records and lining the pockets of its believers.

Bitcoin briefly surged above $103,000 after President-elect Donald Trump said he intends to nominate Paul Atkins, a former regulator who’s seen as friendly to crypto, as the next chair of the Securities and Exchange Commission. He would replace Gary Gensler, who critics say has been overly aggressive in his oversight of crypto.

It’s the latest leg in an astonishing run for bitcoin, whose swings in price are already notoriously extreme.

Bitcoin has more than doubled this year, with a particularly big jump coming after Election Day, when its price was sitting below $70,000. During his campaign, Trump called for making the United States “the crypto capital of the planet.”

The crypto industry, meanwhile, did its part to bring politicians friendly to digital currencies into Washington. Crypto corporations poured over $119 million into influencing federal elections in 2024, primarily into a political action committee dedicated to electing pro-crypto candidates and defeating crypto skeptics, according to a recent review by Public Citizen.

It’s a large amount. Crypto companies accounted for 44% of all the corporate money contributed during this year’s elections, according to the consumer advocacy organization.

Such a tight embrace marks an interesting twist from bitcoin’s early days, when someone or a group of someones under the name of Satoshi Nakamoto created a kind of electronic cash that wouldn’t be beholden to any government or financial institution.

In the white paper announcing bitcoin, Namakoto said the traditional way of doing business on the internet “works well enough for most transactions.” But, Nakamoto said, it “still suffers from the inherent weaknesses of the trust based model,” where a third party like a bank needs to process payments.

Instead, Nakamoto suggested harnessing computing power around the world as a way to create a digital currency that can’t be double-spent. “What is needed is an electronic payment system based on cryptographic proof instead of trust, allowing any two willing parties to transact directly with each other without the need for a trusted third party.” That is what became the bitcoin network.

Winnipeg Free Press | Newsletter

Jen Zoratti | Next

Wednesdays

What's next in arts, life and pop culture.

Sign up for Jen Zoratti | Next

Sign Up

I consent to the Terms and Conditions, Cookie and Privacy Policies.

I consent to CASL agreement.

Since then, bitcoin has moved from the financial fringes toward the mainstream, in jagged fits and starts. While it hasn’t taken off as a way to pay for groceries, it found popularity as a kind of “digital gold,” or a way to store value in something that’s not subject to the direct influence of a federal government or a central bank.

In its early days, it had a reputation for use by drug dealers, scammers, crypto enthusiasts, libertarians and others who were looking to move money without oversight by the government. Now, it’s also found its way into more investor portfolios. Earlier this year, the SEC approved exchange-traded funds that track the spot price of bitcoin. Such ETFs give investors a relatively easy way to buy bitcoin directly in their existing trading accounts.

Through its life, bitcoin has soared through a series of manic bull runs as well as “crypto winters” that brought extreme declines. It went from just over $5,000 at the start of the COVID-19 pandemic to nearly $69,000 by late 2021, before crashing below $17,000 following hikes to interest rates by the Federal Reserve and the 2022 collapse of crypto exchange FTX.

With bitcoin in its latest bull run, the man who’s about to roll into the White House seemed to take at least some credit.

“CONGRATULATIONS BITCOINERS!!!” Trump said in a post on his Truth Social network. “$100,000!!! YOU’RE WELCOME!!!”