Can Trump’s Promises Propel Bitcoin Beyond $100,000? The Future of the 'Trump Bump' Explored

Donald Trump is known for fueling volatility in financial markets. When he won his first election, markets rallied off expectations of huge tax cuts and financial deregulation. Now, his second election victory is raising certain asset prices, with cryptocurrencies as one of the main beneficiaries.

Last year, the combined value of all digital currencies rocketed from $1.6 trillion to $3.29 trillion, and Bitcoin, the industry's poster child, hit a new high just above $100,000. Crypto prices began rising again toward the end of 2023, but the biggest gains were seen after Trump won the election following a campaign in which he promised to be the "crypto president."

Trump’s 'Crypto President' Promise

Trump announced his 'crypto president' plans in 2024 at an annual Bitcoin conference in Nashville, Tennessee. He stated he would make the U.S. “the crypto capital of the planet and the Bitcoin superpower of the world.” He expressed, “If Bitcoin is going to the moon... I want America to be the nation that leads the way.”

He also discussed creating a government strategic stockpile of Bitcoin, similar to the U.S.'s existing gold and oil stockpiles, and has since nominated cryptocurrency advocates to chair the Security and Exchange Commission (SEC) and the Treasury.

Is Trump Responsible for Bitcoin's Rise Over $100,000?

In early November 2024, just before Trump’s election victory, Bitcoin traded at about $68,300. Not long after, the price soared beyond $100,000, with analysts citing Trump's victory as a catalyst. Other cryptocurrencies also rose sharply, as did investments in crypto-related companies.

Trump’s endorsements and choice of crypto-friendly figures to head key departments in his administration sent a message that the U.S. government is behind Bitcoin, keen to help it flourish, and not planning to hinge its development with regulation. By doing so, he eliminated some of the core concerns that have long spooked investors and kept Bitcoin away from the mainstream.

Is the Rise in Crypto Sustainable?

Yet it remains to be seen whether Trump will be able to keep the more ambitious of his crypto-related promises and even how genuine they were, given that the crypto industry was the largest corporate donor in the 2024 presidential race. Just three years earlier, he had denounced Bitcoin as a “scam against the dollar,” and any diminishment of the dollar as the world's most important trading currency involves a weakening of U.S. economic power. So longer-term U.S. strategic interests may win out.

There are concerns about Trump’s pledge to use taxpayer funds to stockpile Bitcoin. Bitcoin has no intrinsic value, its price is extremely volatile, and, unlike the dollar, its production and supply can't be controlled by the U.S. government. While about 95% of the potential supply of Bitcoin has already been issued, it remains far from mainstream, so convincing Americans to invest in a stockpile could be a hard sell.

Still, Trump himself is now invested in the crypto industry with the creation of the crypto platform World Liberty Financial, so he may prioritize his financial interests with crypto-friendly policies.

What Could Cause Crypto To Fall?

First, the 'Trump bump' was at least partly a momentum trade, so prices could fall as soon as that momentum fades, and in fact this appears to have already begun, though the pullback has been modest so far.

There are also legitimate concerns about the long-term sustainability of digital currencies. One involves their history of facilitating crime. Another is the high cost of producing them and the enormous amounts of energy they consume. Many argue that other technologies, including artificial intelligence, are more deserving of our limited energy supplies.

While a high-tech, decentralized financial system carries a lot of appeal and potential value, crypto has yet to live up to its promise. Cryptocurrencies have been around for years, yet their practical use is still highly limited, fueling the argument that they are purely speculative instruments with no intrinsic value.

The Bottom Line

Donald Trump’s electoral ambition and penchant for prioritizing his own business interests have been great for the crypto industry and its growing band of investors. However, there are a number of reasons to be skeptical that the "Trump bump" is sustainable even in the near term. Campaign promises are cheap. Making the U.S. the "crypto capital of the planet" won't be.