Crypto’s Rise During Trump’s Time
You might have heard about the big jump in cryptocurrency prices, often called the “Trump effect.” This happened while Donald Trump was the president. Some people think this is because of Trump’s support for digital money and his team’s friendly policies towards it. But others wonder if this boom will last or if it’s just a short-term thing.[1]
What’s Behind the Crypto Boom?
Several things have helped cryptocurrency prices go up during Trump’s time:
- Support and Less Rules: Trump and his team have been open about liking digital money. They’ve also made rules less strict, which makes investors more confident.[1]
- Banks Getting Involved: If rules like SAB121 are taken away, banks could keep cryptocurrencies. This could make more people and companies use and invest in cryptocurrencies.[1]
- Clear Rules: Trump’s team made an order about crypto to make rules clearer. This helps more people invest in and work on crypto projects.[3]
Challenges and Dangers
Even though people are excited about the crypto boom, there are some problems and risks:
- Safety Worries: Making rules less strict might let bad people do bad things with crypto. In 2023, $5.6 billion was lost to crypto scams, even with stricter rules.[1]
- Price Fluctuations: The crypto market is growing fast, which can make prices go up and down a lot. This can be dangerous for people who don’t know much about investing.[1]
- Technological Threats: Something called quantum computers could break the codes that protect some cryptocurrencies like Bitcoin.[1]
Will the Crypto Boom Last?
In the end, we don’t know if the “Trump effect” will make the crypto market stay strong. It depends on if Trump’s team can find a good balance between making rules less strict and protecting people from bad things happening. It also depends on what happens with technology and how other countries do with crypto.
As the U.S. tries out crypto, it’s important to find the right balance between letting it grow and making rules. If done right, crypto could bring a lot of good things like more jobs and better technology. But if not, it could cause financial problems.
Sources: Worth, Happy Scribe, National Law Review