Bitcoin’s latest rally is another fear-of-missing-out moment as the prospect of a friendly U.S. administration supercharges the cryptocurrency. There is reason to be wary.
There are many factors pushing Bitcoin higher—the start of options trading on exchange-traded funds holding the crypto, buying by corporate investors such as MicroStrategy—and, above all, the prospect of a supportive regulatory regime under President-elect Donald Trump.
Right now, everything points to further gains. Crypto skeptic Gary Gensler will step down as chair of the Securities and Exchange Commission just as Trump takes office. His replacement will almost certainly be someone with a pro-crypto stance.
That could unleash new buying. Charles Schwab’s incoming CEO Rick Wurster signaled on Thursday that the brokerage will offer spot crypto trading when the regulations change. Bitcoin is the crypto with the name recognition to benefit.
So why not dive in? Well, even if you don’t agree with Warren Buffett’s assessment of Bitcoin as “rat poison squared,” it remains a speculative asset. Those who buy now will be doing so at around $100,000—you’re unlikely to get rich coming in at those levels. Few of Trump’s policies are likely to change the fact that latecomers to the crypto party risk being on the wrong end of a bubble popping.
Bitcoin’s remarkable resilience is partly due to believers in the token whose rallying cry is HODL—or hold on for dear life—during downturns. As Trump brings crypto into the mainstream, that base will be diluted and any rush to sell could become more extreme. The thrill of the climb isn’t worth the stress of the drop.
—Adam Clark
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Trump Names Bondi New Pick for Attorney General
President-elect Donald Trump picked Pam Bondi, the Florida attorney-general, to be his AG nominee, just hours after his first candidate, former Rep. Matt Gaetz, withdrew from consideration amid concern his nomination had become a distraction in a sharply divided Senate. At the same time, the House’s razor-thin Republican majority could be challenging for Trump’s early agenda.
- Gaetz dropping out underscores that Trump’s preferred nominees need Senate approval, and Gaetz faced an uphill fight after criminal accusations of sex trafficking and sex with a minor. He denied wrongdoing, but the House ethics committee was set to release a report on the allegations before his nomination.
- Bondi is a former Florida state attorney general with nearly 20 years as a prosecutor. Trump has nominated other controversial choices that could draw more scrutiny now that Gaetz’s controversial nomination has ended. Robert F. Kennedy Jr., a vaccine skeptic nominated for Health and Human Services,
could be one such candidate, analysts said.
- Trump will get to appoint a new securities industry regulator as Gary Gensler said he would step down in January as Chair of the Securities and Exchange Commission. Federal Communications Commission Chair Jessica Rosenworcel is also resigning on Jan. 20.
- In addition, House Republicans could have fewer than the 218 seats needed to make up a full majority in the 435-member House during the first 100
days of Trump’s administration, potentially complicating his early legislative agenda. The GOP will temporarily have a 217-seat majority until special elections to fill vacancies.
What’s Next: If a stopgap funding bill that expires in December gets extended until early 2025, it will need to be re-approved, as will the law to lift the debt ceiling. Trump’s plans to fund mass migrant
deportations, enact new trade tariffs, and extend his 2017 tax cuts will likely be intensely debated.
—Matt Peterson, Joe Light, and Liz Moyer
DOJ Wants a Google Breakup, But Outcome Uncertain
The Justice Department wants a federal judge to force Alphabet to sell its web browser Chrome to end its monopoly in online search, among other proposed remedies, after the court called the tech giant a monopolist.
But the ultimate outcome and timeline of a break up are unclear.
- Kent Walker, Alphabet and Google’s chief legal officer, said the “staggering” proposal goes well beyond the court’s decision and would break numerous Google products. Google said the government is pushing a “radical interventionist agenda” that will harm
America’s global technical leadership.
- The Justice Department wants to end Google’s “traffic acquisition” payments to be the default search engine on mobile devices such as Apple’s iPhone and its own Pixel smartphones. It also wants Google to share its data on search, ads, and users with rivals like Microsoft, and create a new panel to oversee Google’s compliance.
- It’s unknown how the next
administration’s Justice Department will handle the case. Wedbush’s Dan Ives told Barron’s he doesn’t see a breakup in the next few years, but instead sees business model tweaks, and expects a much different tone from the Trump administration around Big Tech.
- The next administration will likely appoint new people to
Justice, including potentially someone to replace Jonathan Kanter, the lead on government cases against Google. This case originated in 2020 under the first Trump administration and has 49 states as co-plaintiffs, many with Republican attorneys general.
What’s Next: Federal Judge Amit Mehta will decide on the penalty phase of Google’s trial in April, with a final ruling due in August. Any actual enforcement could take years, and Mehta could stay any remedies during Google’s planned appeal, stretching the process even longer.
—Adam Levine, George
Glover, and Janet H. Cho
Retail Earnings Roll Out as Industry Braces for Black Friday
Retail earnings will continue rolling out
next week in the lead up to Black Friday and the heart of the holiday shopping season. Casual clothing chain Gap said it’s off to a strong holiday performance, topping third quarter profit expectations and raising guidance for the full year.
- Gap reported adjusted earnings of 72 cents a share and revenue of $3.8 billion, up 2% from one year ago. This was the fourth consecutive quarter of sales increases as the company gains market share across all its brands,
