Bitcoin Surges Amid Prospective Regulatory Shifts Under Trump

Bitcoin's Resurgence

Bitcoin saw a notable increase on Thursday, driven by optimism surrounding potential regulatory changes under Donald Trump's upcoming administration. The cryptocurrency moved closer to the $100,000 mark, recovering from recent setbacks. Despite experiencing profit-taking losses last week, Bitcoin remains over 100% up in 2024.

Regulatory Shift to CFTC

A significant regulatory shift is anticipated, with plans to transfer crypto oversight from the Securities and Exchange Commission (SEC) to the Commodity Futures Trading Commission (CFTC). The CFTC is perceived to have a more lenient regulatory framework, promising relief for the crypto sector. This move comes after the SEC's rigorous enforcement actions, which have been a source of concern for investors since 2022.

Impact on the Crypto Market

The ripple effect of these developments was immediate, with XRP seeing a more than 7% increase. The potential appointment of Paul Atkins, a proponent of digital assets, as SEC Chair, signals a more supportive regulatory environment. This aligns with Trump's approach of appointing pro-crypto individuals to key positions.

Limitations of a Bitcoin Strategic Reserve

However, despite the optimism, Compass Point Research highlights limitations in Trump's plan for a Bitcoin strategic reserve. The Treasury is unlikely to endorse deficit-driven funding for Bitcoin purchases, and Congress is also expected to resist increasing the fiscal deficit for such investments. The BITCOIN Act proposed by Senator Cynthia Lummis is seen as unlikely to progress.

Broader Cryptocurrency Gains

The positive sentiment extended to other cryptocurrencies. Ether recorded a 5.1% rise, while Solana, Cardano, and Polygon saw gains of 4.2%, 5.2%, and 4%, respectively. Among meme tokens, Dogecoin increased by 4.3%. These developments underscore the broader market's response to Bitcoin's rally and the anticipation of a favorable regulatory environment.