This week saw cryptocurrency start a huge resurgence, particularly Bitcoin. It quickly passed the $106,000 mark, settling at around $105,000. This has been in part down to confidence buoyed by Donald Trump winning the US election and his crypto-friendly comments towards changing legislation. The forthcoming president has even said that he plans to stockpile it, in much the same way oil and gold are kept by the country.

Bitcoin’s record high

Aside from elections, a lot of its rise has also been down to the fear of missing out. Investors are speculating it may hit $120,000 before the end of the year and even $150,000 by the middle of 2025. This has been backed by Trump making a series of announcements regarding his team, many of which are known to be crypto-friendly. These include entrepreneur David Sacks, former head of PayPal, as his advisor on AI and cryptocurrency. To keep abreast of all these changes and crypto news, follow the action here on cryptotoday.org.

There have also been gains for other currencies. Ethereum has moved up in value, as has XRP. Ethereum has been pushing at the psychological $4,000 level, and it is guessed that if it breaks it, it could also enter a market bull run.

The decline in recent days

Cryptocurrency is always volatile, and when a bull run such as this starts, it inevitably comes with a short cooling-off period. This has been apparent in the past few days. After its record highs, Bitcoin has declined around 8.8% to $93,385. Ethereum has also felt the pinch, moving to $3,150.80.

Statements made by the US Federal Reserve have aided this. This week it announced fewer interest rate cuts than expected in 2025. When interest rates are high, people tend to invest in stable assets like gold. When they are low, more risky assets like cryptocurrency are sought. This buoys the market and creates consumer sentiment.

The move will have seen many sell off risky assets, such as Bitcoin and Ethereum. After positive announcements by the Trump Administration and his support for cryptocurrency, this will have undoubtedly dampened the markets.

Another factor will be the personal consumption expenditures index for the month. This is a rating of inflation, and if it shows it is still high, it means higher interest rates are more likely to stay. However, this will impact all assets, including stocks and shares, not just riskier ones like cryptocurrency.

New exchanges in Hong Kong

Elsewhere in the world, this positive reaction to cryptocurrency has been adopted. On Wednesday, the securities regulator in Hong Kong approved four new cryptocurrency exchanges in the state. This is in a move to position itself as a financial center after dwindling interest from the global market.

Four exchanges have been granted licenses. These are DFX Labs Company, Hong Kong Digital Asset EX, Thousand Whales Technology, and Accumulus GBA Technology. There are now seven registered exchanges there. This follows other entities like Dubai and Singapore, which are entering into a race to become the world’s foremost crypto hub.

Just like the US, 2024 saw Hong Kong introduce spot ETFs for cryptocurrency. In April it launched its first Bitcoin product to great success. At the time of writing, it is unknown if there are plans to introduce ones using other currencies. The lukewarm reception seen in 2024 in the US for Ethereum ETF products may possibly be delaying this decision.

El Salvador scales back crypto operations

The crypto dream has not worked out for all countries, however. El Salvador, the Central American nation that put itself at the forefront of the crypto race, has begun to scale back on its dream. It has made a deal for $1.4bn from the International Monetary Fund in exchange for a rolling back of its cryptocurrency operations.

El Salvador made history in 2021 when it became the first country to accept Bitcoin as legal tender. Its most recent reforms will make the acceptance of Bitcoin voluntary, as opposed to one mandated by the state. In the public sector, the use of Bitcoin will also be cut back.

Although the deal has yet to be approved by the IMF board, it is believed it will help the country’s faltering economy. The President of El Salvador, President Nayib Bukele, was seen on social media celebrating as crypto-friendly Trump won the election. He also announced that El Salvador’s Bitcoin holdings had doubled as the currency hit $100,000. Yet the deal was approved after the IMF had previously shunned requests from the president due to the country’s attitude towards cryptocurrency.

By no means does this mean a failure for cryptocurrency. The economy of El Salvador was already faltering, and this last-ditch attempt to save it may not have paid off. Elsewhere, major global economies, including the US, are becoming very crypto-centric. It may be the right time to buy and hold those riskier assets.