Following Donald Trump’s resounding victory in the U.S. presidential election, the price of bitcoin has surged, with many anticipating a major “game-changer.”
As the combined cryptocurrency market returns to above $3 trillion for the first time since 2021, a “perfect storm” has caused the price of bitcoin to soar further, closing in on $100,000 per bitcoin.
Now, as Tesla billionaire and Trump adviser Elon Musk delivers a major “bankruptcy” warning in the United States, a prominent Federal Reserve member has moderated his criticism of bitcoin and cryptocurrency.
Neel Kashkari, president of the Minneapolis Federal Reserve, told this week, “I will keep an open mind.”
In 2020, Kashkari referred the cryptocurrency market to a “giant garbage dumpster” and has previously labeled bitcoin and cryptocurrencies in general “worthless,” “fraudulent,” and “nonsense.”
But Kashkari questioned, “other than as a speculative asset, what does it actually do in the real economy?” even if he pledged to keep the door open to cryptocurrency.
Analysts at JPMorgan have referred to this year’s surge in the price of bitcoin as a “debasement trade” and forecast that it may continue to rise due to concerns about inflation and devaluation of the US currency.
During the Covid-era lockdowns, billionaire Elon Musk of Tesla, who was selected to head the Doge department of government efficiency under the incoming Trump administration, spearheaded a growing protest against uncontrolled U.S. government spending.
As U.S. President-elect Trump has surrounded himself with strongly pro-bitcoin and crypto advisors, such as Howard Lutnick, the CEO of Wall Street behemoth Cantor Fitzgerald, who is leading Trump’s transition team and is vying to be his Treasury secretary nominee, Kashkari has softened his stance on bitcoin and cryptocurrency.
Trump’s election has pushed the bitcoin price higher over the previous week as traders expect his administration to ease U.S. crypto restrictions and change leadership at regulatory bodies that have frowned on cryptocurrency markets.
Trump has also proposed creating a U.S. bitcoin strategic reserve, anticipating that the bitcoin price will someday transcend gold, as well as utilizing bitcoin to pay down the country’s $35 trillion debt.
