Bitcoin Stabilizes at $90,000: Unveiling Trump’s Crypto Trading Tactics – Insights from Digital Transformation News

The surge in cryptocurrency investment, following Donald Trump’s successful reelection bid, has propelled bitcoin to a new unprecedented high. The leading crypto asset briefly touched $89,000, achieving this peak on an early Tuesday as per CoinDesk’s data. Throughout that day, bitcoin’s value fluctuated, yet it has sustained an over 27% increase within a week, positioning itself at nearly $88,288 by 5 p.m. ET.

The ascent in the crypto market comes in the wake of Trump’s election win. election. Observers attribute much of the bullish trend to the expectation of a more crypto-accommodating stance by the reelected administration, anticipating both clearer regulations and some operational freedom. Nevertheless, the future remains uncertain in the unpredictable world of cryptocurrencies, and despite the optimistic outlook shared by many, there are voices cautioning about the perils of crypto investments. Read on for essential insights.

What exactly is cryptocurrency?

While cryptocurrency isn’t new, it has been gaining more attention of late. Simply put, it’s a form of digital currency that operates on an online network, independent of any central authority like a government or bank, and it’s recorded via blockchain technology. Bitcoin, being the first and most sizable cryptocurrency, leads the pack, but others, including Ethereum, Tether, and Dogecoin, have also captured public interest. Though seen as an electronic alternative to conventional money by many investors, the inherent volatility of cryptocurrencies, influenced by broader market dynamics, is worth noting.

Current Crypto Surge Explained

The recent elevation in crypto values has roots in last week’s election results. Initially skeptical, Trump eventually accepted and advocated for cryptocurrencies during the presidential race. He envisioned the U.S. becoming a global crypto hub and even introduced World Liberty Financial, a venture focusing on crypto trading. His administration is anticipated to spur legal and regulatory reforms favored by the crypto community.

The sector harbors high hopes after Trump’s reassertion, banking on his pledges to streamline legislative aspects and possibly ousting the SEC’s current chair, Gary Gensler, a stringent crypto industry regulator. Crypto analysts from Citi, David Glass, and Alex Saunders highlighted such sentiments following Trump’s victory, praising his crypto-friendly reputation, and signaling a potential regulatory refresh. Prior to this election-triggered climb, assets like bitcoin had already enjoyed an uptrend attributed to the advent of spot bitcoin ETFs launched early in the year.

Experts emphasize that the considerable inflow to spot ETFs has been a significant factor in bitcoin’s recent success and project this to continue shaping near-term trends. Bitcoin’s “halving” in April, a protocol-led event reducing mining rewards by half, has also contributed to its long-term price by affecting the asset’s supply if the demand remains robust.

Associated Risks

Cryptocurrencies, bitcoin included, are known for their dramatic price swings. The 24/7 nature of crypto trading means those fluctuations can occur swiftly, including during weekends or overnight. Historical trends underline the risk of rapid financial losses. The larger market scenario significantly influences the long-term value trajectory of these assets.

During the early pandemic phase, bitcoin’s value dropped to just above $5,000, followed by a sharp ascent to nearly $69,000 by November 2021 amid heightened demand for tech assets. However, subsequent market changes, including the Fed’s inflation-curbing rate hikes and FTX’s implosion, injected volatility. Yet, once inflation signs began weakening, investors returned, propelling gains through ETFs. Experts, therefore, advise approaching crypto with caution, particularly for smaller-scale investors.

Environmental Considerations

Bitcoin mining, the process of generating new bitcoins, is energy-intensive. Studies reveal that the carbon emissions linked to global bitcoin mining have been substantial. U.S. reports indicate a growing concern over the increasing energy demands crypto mining poses.

The environmental impact is heavily contingent on the type of energy sources used for mining. Despite scrutiny, there’s been an observable shift toward cleaner energy within crypto mining, partly driven by regulators’ expanding focus on climate change.