Last week, after Donald Trump announced that he would nominate Paul Atkins, a cryptocurrency advocate, to head the Securities and Exchange Commission

How Long Will the Trump Crypto Boom Last?

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2024-12-12 03:00:06

Last week, after Donald Trump announced that he would nominate Paul Atkins, a cryptocurrency advocate, to head the Securities and Exchange Commission (S.E.C.), the price of a Bitcoin topped a hundred thousand dollars, and crypto enthusiasts celebrated. The mood in the crypto markets reminded me of the dot-com boom, along with its inevitable bust, which I chronicled in a book more than twenty years ago. There was the same giddy excitement, the same predictions that prices could still go higher, much higher, and the same uneasy feelings among some longtime market participants and observers, me included.

To be sure, there was ample reason for excitement among crypto investors, crypto entrepreneurs, and pro-crypto donors who gave hundreds of millions of dollars to pro-crypto politicians ahead of November’s election. Investing in Trump’s victory and the defeat of some prominent crypto skeptics, including the Democratic senator Sherrod Brown, of Ohio, has already paid off. The S.E.C. is the nation’s leading investor-protection agency. Under the leadership of Gary Gensler, whom President Joe Biden nominated as chair in 2021, the agency had taken an aggressive approach toward an industry that Gensler described as rife with fraud and scams. The S.E.C. filed lawsuits against numerous crypto firms, including the crypto exchange Coinbase and the digital-payment network Ripple.

But, under Atkins, a conservative lawyer who served as an S.E.C. commissioner during George W. Bush’s Administration and who now co-chairs the Token Alliance, a crypto lobbying group, the agency’s ongoing lawsuits and other cases would presumably be put on hold. And, over all, the S.E.C. seems likely to adopt a more friendly stance to issuers of crypto assets, such as currencies and tokens—a prospect that alarms critics of the crypto industry. “For crypto assets, the fundamental rules that have protected investors for decades are going to be greatly weakened, and the industry is going to be allowed to expand with very little regulation or accountability,” Dennis Kelleher, the president of Better Markets, a Washington-based financial-reform group, told me. “It’s going to be like the nineteen-twenties—caveat emptor.” Crypto leaders hailed the choice of Atkins as a landmark. “We’re witnessing a paradigm shift,” Michael Novogratz, the founder and chief executive of the crypto outfit Galaxy Digital, told Reuters. “Bitcoin and the entire digital asset ecosystem are on the brink of entering the financial mainstream.”

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