Crypto keeps climbing as Trump team takes shape
Digital currencies test all-time highs in response to changes at The White House and financial regulator
The past week saw cryptocurrencies compound recent gains with key currencies hitting new all-time highs. Bitcoin broke valuation records and is now a whisker away from breaking through the $100k mark, while Solana has also regained its all-time high, mimicking last November’s strong performance. Ethereum has too, although it has some way to go before making a full recovery to its peak in 2021.
On the BCB trading desk, activity has been brisk with flows moving markedly higher.
The ongoing announcements from the incoming Trump administration have helped crypto, notably that of Scott Bessent – widely seen as pro-crypto – being named as Treasury Secretary. There have also been reports that Trump intends to create a White House post dedicated to crypto policy.
Imminent departures also buoyed crypto, as Securities and Exchange Commission (SEC) chair Gary Gensler announced he will step down on day one of Trump’s presidency.
Gensler has taken a tough regulatory line with crypto markets, with Ripple (XRP) being the subject of an ongoing lawsuit from the SEC. XRP’s rally was helped by expectations that the case could be dropped.
Meanwhile, Cantor Fitzgerald (headed by Trump’s Commerce Secretary Howard Lutnick) reportedly took a 5% stake in Tether. The finance group is also reported to be in talks to set up a $2 billion lending programme, in which borrowers can use Bitcoin as loan collateral.
Corporates have also been adding crypto to their treasury assets with video platform Rumble, pharmaceuticals group Acurx and Japanese investment group Metaplanet all adding bitcoin to their treasuries. This trend is further underscored by the recent news of MicroStrategy acquiring approximately $5.4 billion worth of Bitcoin in the past week.
Dollar and Sterling nudged by rates and borrowing expectations
The appointment of Bessent, however, put a dent in America’s fiat currency. Seen as a fiscal conservative favouring a tighter rein on public finances, Bessent’s appointment saw yield of US Treasuries ease, also nudging the dollar lower.
Market views of Sterling, however, tended the other way after Deputy Bank of England Governor Clare Lombardelli gave a cautious view on UK inflation – which came in slightly higher than expected last week. Lombardelli’s suggestion that interest rate easing in the UK would be very gradual gave a boost to Sterling.
On the international stage, The COP 29 conference concluded with a $300 billion-a-year finance package for developing nations, far exceeding the $100 billion set in 2009 but falling short of the $1.3 trillion demanded, drawing criticism as inadequate.
Prices go bananas
Finally, while food price inflation in developed economies has long since abated, it seems a few specialist items can still command eye-watering prices as Justin Sun, the founder of cryptocurrency platform Tron, paid $6.24 million for a banana. The fruit, stuck to a wall with duct tape, was in fact an ‘artwork’ by Italian artist-cum-prankster Maurizio Cattelan. Sun has said he plans to eat it.
In February this year, Sun shared details of his crypto holdings in an X post, showing he held 28,614 BTC. Thanks to BTC’s rising value, and even at the artworld’s inflated fruit prices, Sun can still afford to buy another 440 artistic bananas.
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