Bitcoin and cryptocurrency prices have hit a snag. After a remarkable surge following Donald Trump’s presidential victory, concerns now loom over a potential crash in the $4 trillion crypto market. Bitcoin recently peaked at nearly $110,000, bolstered by leaked plans from Elon Musk regarding crypto in the White House.
However, the excitement is tempered by warnings from seasoned traders about an impending financial crisis. Federal Reserve chair Jerome Powell has stirred the pot by signaling an openness for Wall Street to adopt bitcoin and other cryptocurrencies. This marks a pronounced shift from the previous administration’s stance.
During a recent press conference, Powell stated, “Banks are perfectly able to serve crypto customers as long as they can understand and service the risks.” He emphasized the importance of ensuring that banks feel confident in their crypto activities, calling for them to be “safe and sound.”
This new attitude from the Fed comes as Wall Street, led by giants like BlackRock, has increasingly embraced bitcoin. Over the past year, a wave of spot bitcoin exchange-traded funds (ETFs) has emerged, helping to integrate cryptocurrencies into mainstream finance.
The shift in sentiment under Trump contrasts sharply with the Biden administration, which adopted a more hostile approach towards crypto. Under Biden, companies in the crypto space faced significant hurdles. Many reported an unofficial policy dubbed “Operation Choke Point 2.0,” aimed at cutting off essential financial services to crypto businesses, making it nearly impossible for them to thrive.
In a surprising turn, Trump has stepped into the crypto realm himself. His foray began with non-fungible tokens (NFTs) and has expanded into support for a U.S. bitcoin national stockpile and even the launch of a controversial Trump-branded memecoin. This shift has contributed to a change in regulatory attitudes toward the technology.
Meanwhile, Trump is also pushing forward with his trade policies. He has announced steep tariffs on imports from Canada, Mexico, and China, setting the stage for potential global trade tensions. The executive order entails a 25% tariff on goods from Canada and Mexico, along with a 10% tariff on Canadian energy and oil, and an additional 10% on Chinese imports, set to take effect soon.
Investor Robert Kiyosaki has voiced concerns about potential crashes in gold, silver, and bitcoin due to these tariffs. He views any downturn as an opportunity to buy more assets at lower prices, asserting that economic debt is the real issue that could worsen in the coming months.
