Bitcoin rose above $100,000 for the first time on Thursday, buoyed by Donald Trump’s victory in the US Presidential race spurring expectations that his administration will create a conducive environment for cryptocurrencies. Bitcoin has more than doubled in value this year and is up about 45% in the four weeks since Trump’s victory, which also saw a slew of pro-crypto lawmakers being elected to Congress. It last traded at $100,027, up 2.2% on the previous session, after earlier rising as high as $100,277. “We’re witnessing a paradigm shift. After four years of political purgatory, bitcoin and the entire digital asset ecosystem are on the brink of entering the financial mainstream,” Mike Novogratz, founder and CEO of US crypto firm Galaxy Digital, told news agency Reuters. “This momentum is fuelled by institutional adoption, advancements in tokenization and payments, and a clearer regulatory path,” he added. Justin D’Anethan, a Hong Kong-based independent crypto analyst, told Reuters: “Bitcoin crossing $100,000 is more than just a milestone; it’s a testament to shifting tides in finance, technology, and geopolitics. The figure not that long ago dismissed as fantasy, stands as a reality.” How has Trump’s victory fuelled the rise? On Wednesday, Donald Trump said he would nominate Paul Atkins to run the Securities and Exchange Commission. Atkins, a former SEC commissioner, has been involved in crypto policy as co-chair of the Token Alliance, which works to “develop best practices for digital asset issuances and trading platforms”, and the Chamber of Digital Commerce. A slew of crypto companies including Ripple, Kraken and Circle are jostling for a seat on Trump’s promised crypto advisory council. Billionaire Elon Musk, one of the biggest backers of Trump during his campaign, is also a proponent of cryptocurrencies. Bitcoin’s rebound from a slide below $16,000 in late 2022 has been rapid, boosted by the approval of US-listed bitcoin exchange-traded funds in January this year. More than $4 billion has streamed into US-listed bitcoin exchange-traded funds since the election. In fact, not just bitcoin, Dogecoin too has seen a surge and has grown by more than 150 per cent since Trump’s victory. Dogecoin, which is referred to as ‘memecoin’ in crypto parlance, is now the sixth biggest cryptocurrency by market cap. How does it affect crypto plans in India? High taxes on cryptocurrencies have put off investors in India and they might not be reacting the way their American counterparts will. In 2018, the Central Board of Direct Taxes had submitted a draft scheme to the finance ministry for banning virtual currencies and a month later, the RBI restrained banks from dealing in cryptocurrencies, a decision that had to be reversed by the Supreme Court in 2020. Despite this, the banking regulator has been vocal about its problems with crypto-assets, having identified them as “a macro-economic risk”. In July 2022, underscoring that the RBI had sought a ban, Finance Minister Nirmala Sitharaman said in Parliament that “international collaboration” would be needed for “any effective regulation or ban” on cryptocurrency as the digital currency is borderless in nature. The government had, in 2022, imposed a tax on “any income from transfer of any virtual digital asset” at a rate of 30 per cent, along with a 1 per cent tax deduction at source (TDS) on each transaction.
