Bitcoin’s surge in value continues to break records in the aftermath of Donald Trump’s election, as the crypto industry goes from strength to strength in anticipation of more crypto-friendly policies being implemented by the incoming US administration.

On Monday, bitcoin’s value in Asian markets briefly crossed $106,000, before falling back to $105,000 over the course of the day, the BBC reported.

And in a further boost of confidence for crypto investors, the incoming US president said last week he was thinking of creating a national stockpile of crypto currency, just like the country’s oil reserves.

Peter McGuire from trading platform XM.com was quoted by the BBC saying: “The bitcoin rally since the election has been parabolic and the FOMO – or fear of missing out – rally is gathering momentum.” 

El Salvador’s bitcoin deal

El Salvador’s crypto honeymoon seems to be coming to an end, with the government on the verge of signing an agreement with the IMF that could put an end to bitcoin being accepted as legal tender in the country.

In return, the IMF will sign off a $1.3 billion loan package, which will also pave the way for a $1 billion loan from the World Bank and another $1 billion from the Inter-American bank, according to reports.

In June 2021, El Salvador passed a law that made it the first country in the world to accept bitcoin as legal tender. But the IMF opposed the move on the basis of risks to financial stability and integrity.

“Under the terms of the agreement being finalized with the Washington-based fund, El Salvador would drop a legal requirement for businesses to accept bitcoin as payment, making it voluntary to do so,” according to the FT.

President Nayib Bukele has shown ambition to turn his country into a ‘crypto paradise’, and even wishes to build a ‘bitcoin city’ which will be powered by geothermal energy from volcanos.

Crypto policy blitz

And speaking of crypto’s legitimacy, experts have said the digital assets could benefit from a change in the White House administration as well as in the public and investors’ mood towards it.

They predict that, soon after Trump’s arrival at the White House in January, 2025 could see a crypto policy blitz across many states in the US.

They also argue that, compared to other state backed assets, crypto ‘is a valuable hedge fund against inflation’. However, government buying could further boost its legitimacy as well as investor confidence.

But critics on the other hand have warned investors they should be prepared to lose money if they want to go down the crypto road. They believe there are too many ‘unknowns’ when it comes to predicting or understanding future returns on the cryptocurrency.

A similar message came out of a recent US Government Accountability study, which said the digital assets had “uniquely high volatility” and it was hard to predict any future returns.

The crypto crown princes

The Financial Times has published an article about a number of individuals with crypto backgrounds set to make the biggest gains from Donald Trump’s return to the White House.

The ‘crypto crown princes’ include names such as CoinBase CEO Brian Armstrong, the man behind one of the biggest donor groups for Trump’s election campaign.

There is also Michael Saylor, executive chair of Microstrategy. His successful attempt to turn a software business company into the world’s largest corporate buyer of bitcoin has been termed as “one of the most extraordinary corporate pivots in history” by the FT.

And we also have a pair of twins on the list. Cameron and Tyler Winklevoss are co-heads of the cryptocurrency exchange Gemini. They supported Trump after issues with US regulators, especially after the SEC sued them “over the legality of their lending product.”

Other names on the list include Paolo Ardoino, chief executive of Tether; Richard Teng, chief executive of Binance; Vitalik Buterin, co-founder of Ethereum; Brad Garlinghouse, chief executive of Ripple Labs; and Marc Andreessen and Ben Horowitz, co-founders at Andreessen Horowitz.

The crypto tsar

David Sacks’ nomination as the incoming Trump administration’s crypto and AI tsar dominated headlines. But questions remain about what exactly he will do, and how much of a free will he will have.

Forbes has tried to answer some of those questions in a commentary. First and foremost, Sacks’ appointment is seen as a campaign pledge that Trump wants to keep, one aimed at rewarding and pleasing all the crypto enthusiasts that backed his campaign.

Second, the role is advisory, meaning that he will have little executive power to do what he wants. However, Sacks is expected to spend most of his time working with Congress to pave the way for implementing Trump’s pro-crypto policies.

Third, Sacks’ presence around Trump would mean US regulators will not have the same ability or desire to go after the crypto industry as they did during the Biden years. It will also mean that banks will not be under any pressure from the White House to limit or even stop crypto-related activity.

Fourth, it could also pave the way for a potential tokenisation of the dollar in the long run. And any sort of pro-crypto regulation in the near future will make this task a lot easier.

“U.S. treasuries are already being tokenised in the billions of dollars, virtually every major U.S. TradFi institution has deployed blockchain and/or tokenised solutions, and payment processors (including credit card firms) are embracing tokenized payments,” according to experts.

FCA’s crypto regulation

And finally, the UK’s FCA has started asking for feedback on its plans to regulate the crypto and digital assets industry, according to reports.

In an attempt to “reduce risks without stifling growth and innovation,” the UK regulator has set out a number of objectives. These include:

• Improve regulatory clarity so there are clear and consistent ‘rules of the game’ for firms and consumers

• Make sure consumers have the information they need before buying or selling crypto assets  

• Require controls and processes to bring about fair and orderly trading conditions  

• Reduce risks of money laundering and losses to fraud.

The FCA will continue to seek advice on the matter until March 2025, and the final rules are expected to go live at some point in 2026, the FT reports.