What is the US’s crypto week? Why has Bitcoin hit a record high?

US 'Crypto Week' Ignites Market Rally as Bitcoin Hits Record High

Bitcoin, the pioneering cryptocurrency, has soared to an unprecedented high, breaching the $120,000 mark for the first time. This significant milestone arrives just ahead of a potentially transformative period dubbed 'Crypto Week' in the United States.

Beginning July 14, the US House of Representatives is set to deliberate on three pivotal, industry-friendly legislative bills. These proposed laws aim to establish a clearer regulatory framework for digital assets within the US, a development long sought by crypto sector insiders.

A Shifting Regulatory Landscape

Under the current administration, there's been a notable call for a shift away from the extensive legal challenges against crypto firms seen under the previous presidency. The push is now towards creating a more favorable regulatory environment for the industry.

The anticipation of these potential regulatory tailwinds has been a significant factor propelling Bitcoin's impressive performance, contributing to its 29 percent gain this year and Monday's record peak of $122,055. For context, when Bitcoin first began trading in January 2009, its value was a mere $0.004.

This surge isn't limited to Bitcoin. The broader cryptocurrency market is experiencing a rally, with Ether, the second-largest token, recently hitting a five-month high of $3,048.2. Cumulatively, the total market capitalization of the sector has ballooned to approximately $3.8 trillion.

Decoding 'Crypto Week': What's on the Table?

'Crypto Week' will focus on three key pieces of legislation aimed at shaping the future of digital asset regulation in the US:

1. The GENIUS Act: This bill seeks to provide much-needed clarity on whether digital assets are classified as securities or commodities. By offering clear regulatory definitions, it aims to help startups navigate legal uncertainties and avoid the challenges posed by ambiguous rules. The Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act has already successfully passed the Senate.

2. The Clarity Act: This legislation proposes to restrict federal agencies from relying solely on court rulings to expand their regulatory authority over the crypto space. Its intent is to ensure that Congress, rather than the judiciary, primarily defines the classification and governance of crypto assets.

3. The Anti-CBDC Surveillance State Act: This bill directly targets the potential issuance of a central bank digital currency (CBDC) by the Federal Reserve. Proponents of the bill argue that a CBDC could potentially facilitate government surveillance of citizens' financial activities, posing a threat to individual privacy, and therefore seek to prohibit its creation.

These legislative efforts represent a significant shift for a sector that had previously expressed concerns about a perceived hostile environment and stringent enforcement in the US, with some companies even considering relocating their operations elsewhere. Crypto firms have often criticized US financial regulators for implementing confusing or inconsistent rules.

Industry experts suggest that regulatory clarity, even if the final passage of bills faces delays, is expected to encourage capital that had been held back due to uncertainty to re-enter the market. Such changes could simplify the process for companies looking to launch new digital asset products and engage in crypto trading.

Navigating the Criticism

Despite the industry's optimism, the proposed legislation is not without its critics, particularly among Democrats, who are expected to propose amendments to the GENIUS and Clarity Acts. Concerns have been raised that the current administration might be making too many concessions to the crypto industry.

Critics argue that the proposed rules should not weaken existing, long-standing securities laws or allow the inherent volatility of the crypto market to destabilize the traditional financial system. A key point of contention is the application of anti-money laundering rules. Given that crypto users are typically identified by alphanumeric wallet addresses rather than names, there are concerns that bad actors could exploit this anonymity to conceal the origins of illicit funds.

The Influence of Donald Trump

Donald Trump, who was previously seen as a crypto sceptic, has notably embraced the digital asset space. During his presidential campaign, he became the first major-party candidate to accept campaign donations in cryptocurrency. Federal Election Commission data indicates significant spending by crypto insiders during the 2024 campaign to support allies and oppose critics.

In March, Trump announced plans for a US crypto reserve that would include several cryptocurrencies, stating his ambition to make the US the "crypto capital of the world." Furthermore, his family business has launched several cryptocurrency meme coins, including $Trump and $Melania.

These ventures have drawn criticism regarding potential conflicts of interest. For example, a crypto group backed by Trump and his sons reportedly generated substantial earnings for the president. Additionally, Trump Media & Technology Group has sought approval to launch its own "Crypto Blue-Chip ETF," an exchange-traded fund holding Bitcoin and other digital currencies.

Bitcoin's Performance Post-Election

Since Donald Trump's re-election in November 2024, Bitcoin has seen a dramatic increase, surging by 75 percent. It rose from approximately $69,539 on Election Day to its recent record levels. The cryptocurrency first broke above $100,000 in December.

While there was a brief dip below $90,000 in February, triggered by market jitters following announcements of new tariffs, Bitcoin quickly recovered, partly buoyed by Trump's subsequent announcement about the potential "crypto reserve."

Bitcoin's ascent is also occurring against a backdrop of wider economic uncertainty, including global disruptions stemming from tariff policies and ongoing international conflicts. Analysts have noted Bitcoin's resilience this year, demonstrating its ability to rebound in response to macroeconomic events like tariff announcements.

The upcoming 'Crypto Week' in the US House of Representatives is poised to be a defining moment for the digital asset industry, potentially ushering in a new era of regulatory clarity and mainstream adoption, while also raising important questions about oversight and stability.