Bitcoin prices have increased more than 40%, attracting the attention of global markets as US President-elect Donald Trump advocates digital currencies and appoints like-minded people to his cabinet.
 Bitcoin digital currency. |
Bitcoin recently crossed the 100,000 mark for the first time, a major milestone in the history of digital currencies.
Bitcoin prices have increased more than 40% in the past month, attracting the attention of global markets as US President-elect Donald Trump endorsed the digital currency and selected a number of like-minded people to join the list.
Bitcoin’s surge in price reflects changing political and financial dynamics in the US.
Mr. Trump’s change in stance on digital currencies shows the growing influence of capital flows related to this currency.
In 2019, Mr. Trump criticized digital currencies as “very unstable” and conducive to illegal activity.
Mr. Trump’s cabinet selection also reflects this change.
A report by the Pew Research Center found that 17% of Americans have invested, traded or used bitcoin or other digital currencies.
However, despite bitcoin’s growing appeal, skepticism remains.
Economists such as Eswar Prasad, a professor of international trade policy at Cornell University, argue that the volatile value has made bitcoin more suitable for speculation rather than trading.
Many Americans are wary of the security of digital currencies, with a Pew survey finding that only 5% expressed confidence in the currency’s reliability.
On the one hand, bitcoin’s exceptional volatility makes it susceptible to manipulation by high net worth investors.
On the other hand, years of loose monetary policy in the United States have fueled inflation, eroded Americans’ purchasing power and pushed them to seek riskier assets.
The risk of a speculative digital currency bubble is also not new.billion dollarsan increase of 45% compared to the previous year.
Analysts warn that as the world’s largest economy and a key player in the global financial system, the United States must adopt responsible financial regulations, or else could harm both American investors and the entire global economy.
