The rally is likely part of the optimism surrounding Trump’s crypto-friendly stance, including potential plans for a national Bitcoin reserve and regulatory easing. However, controversy arose after the launch of the TRUMP and MELANIA meme coins. The rapid succession of the launch attracted allegations of pump-and-dump schemes and market manipulation. Meanwhile, Coinbase CEO Brian Armstrong recently advocated for global Bitcoin reserves, which could not only help the states or countries that adopt these reserves, but could give the price of Bitcoin a nice boost as well.
Bitcoin Surges Past $109K!
The price of Bitcoin surged by over 6% in mere minutes, which allowed it to reach a new all-time high (ATH) just hours before Donald Trump’s inauguration as the 47th President of the United States. On Jan. 20, Bitcoin briefly jumped past $109,000 to set a new peak at $109,114, according to data from CoinMarketCap.
Bitcoin’s price action over the past 24 hours (Source: CoinMarketCap)
Its previous ATH was close to $108,000, which was set on Dec. 17, 2024. However, the price quickly retreated below $108,000 shortly after hitting the milestone. At press time, BTC was trading hands at $107,677.
Bitcoin’s price climbed by approximately 3% in the past 24 hours. This surge happened in the middle of the heightened anticipation of Trump’s swearing-in ceremony that is scheduled for 4:00 pm UTC. Beyond Bitcoin, the event fueled widespread bullish sentiment in the crypto market. His November election victory already led to a massive rally, which pushed Bitcoin above $100,000 for the first time in early December of 2024.
Optimism in the crypto community is also growing because of Trump’s crypto-friendly stance. His proposed plans to potentially establish a strategic Bitcoin reserve and pursue regulatory easing in the crypto sector made a lot of traders and analysts very excited, and it very likely contributed to the latest rally.
TRUMP and MELANIA Tokens Spark Controversy
While Trump’s inauguration may be behind Bitcoin’s latest achievement, the soon-to-be President and his team are still under scrutiny due to allegations of orchestrating a “pump and dump scheme” after the launch of back-to-back meme coins. On Jan. 18, the Official Trump (TRUMP) token was introduced, and it quickly soared to a $15 billion market cap. The next day, Melania Trump launched her own self-branded meme coin, MELANIA. These launches so close in succession caused widespread accusations of unethical behavior.
Critics pointed to the rapid succession of launches as evidence of greed. Jim Bianco, president of Bianco Research, shared his thoughts on the strategy, and believes that the introduction of MELANIA after TRUMP’s success was seen as dilution. The market reacted quite unfavorably as the TRUMP token lost more than 30% of its value in just hours after MELANIA’s debut.
Naturally, the fallout attracted a lot of sharp criticism. Edward Dowd, founder of Phinance Technologies, described the situation as the largest unforced error ahead of a presidential inauguration. Financial analyst Michael A. Gayed called the TRUMP token a “pump and dump” scheme, and shared that Trump’s credibility was irreparably damaged.
José Maria Macedo, co-founder of Delphi Labs, suggested that the launches were rushed attempts to capitalize on the success of TRUMP. Ryan Selkis, a Trump supporter and former CEO of Messari, even recommended that Trump fire the developers behind the MELANIA token because of their incompetence.
The launch of MELANIA also coincided with a broader downturn in the crypto market, as Bitcoin fell nearly 6% from $105,900 to below $99,650. However, Bitcoin was able to reach its new ATH not too long after.
Despite the controversy, the two tokens still attracted a lot of attention from traders, with a combined market cap of more than $16 billion. For now, the launches and their aftermath caused intense debate about the ethical implications and potential legal ramifications of the meme coins.
Coinbase CEO Pushes for Global Bitcoin Reserves
Despite the volatility caused by Trump’s inauguration and meme coin drama, Bitcoin could still receive a nice boost after Brian Armstrong, CEO of Coinbase, advocated for global leaders to establish Bitcoin strategic reserves. Overall, he believes crypto is a key component of the future digital economy.
In a Jan. 17 blog post, Armstrong described cryptocurrencies as “the next chapter of capitalism” and urged policymakers to adopt crypto-friendly laws, improve government efficiency, create special economic zones, and consider Bitcoin reserves as a hedge against inflation. He also speculated that Bitcoin could play a role as major as gold in the global economy and could even potentially shift the balance of power among nations.
(Source: Coinbase)
Over the past year, Coinbase deepened its political influence by donating more than $45 million to the Fairshake PAC and $1 million to President-elect Donald Trump’s inauguration fund during the 2024 election cycle. Armstrong also met with Trump in November to discuss personnel appointments. Many people believed that this was a clear sign that the company could play a major role when it comes to shaping US crypto policy. Trump is reportedly considering making cryptocurrency a national priority in 2025.
Although Coinbase and its execs are excited about the future of crypto in the US, legal challenges involving Coinbase and US regulators are still unresolved. The SEC filed an enforcement action against Coinbase in 2023 due to unregistered securities exchange activities. Coinbase also pursued lawsuits against the SEC and FDIC over alleged attempts to debank crypto firms.
With the Trump administration is set to take office and possibly reframe the SEC’s leadership, the future of these legal battles and the broader regulatory environment of the US is still unclear for now.
Wyoming Pushes for Strategic Bitcoin Reserve
Some US states are taking the Coinbase CEO’s advice to heart. Wyoming recently introduced a bill to establish a Strategic Bitcoin Reserve, which made it the latest US state to consider investing state funds in Bitcoin.
The bill is titled “State Funds-investment in Bitcoin,” and was announced on Jan. 17. It allows a portion of Wyoming’s state funds to be allocated to Bitcoin if passed. Wyoming Senator Cynthia Lummis, who is a very well known Bitcoin advocate, praised Representative Jacob Wasserburger for spearheading the legislation, which she described as a “forward-thinking approach” that positions Wyoming as a leader in financial innovation.
The proposed legislation will permit the Wyoming state treasurer to invest funds from the general fund, the permanent Wyoming mineral trust fund, and the permanent land fund in Bitcoin. However, each fund is limited to a maximum allocation of 3%. If the market value of the Bitcoin investments in any fund rises over the 3% cap, the treasurer will not be obligated to sell assets to comply with the limit.
Several other states, including Pennsylvania, Texas, Ohio, New Hampshire, Oklahoma, North Dakota, and Massachusetts, have also introduced similar Strategic Bitcoin Reserve bills. The push for these reserves were likely made due to the increasing speculation that President-elect Donald Trump may prioritize the establishment of a national Bitcoin reserve after taking office on Jan. 20.
