Fed Suddenly Flips On Huge $3 Trillion Bitcoin And Crypto Price Boom

Bitcoin has surged in the wake of Donald Trump's decisive U.S. presidential election victory—with the bitcoin price braced for a huge "game-changer."

The bitcoin price has closed in on $100,000 per bitcoin, rocketing higher as a "perfect storm" pushes the combined crypto market back above $3 trillion for the first time since 2021.

Now, as Tesla billionaire and Trump advisor Elon Musk issues a serious U.S. "bankruptcy" warning, a top Federal Reserve official has suddenly softened his criticism of bitcoin and crypto.

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"I will have an open mind," Minneapolis Federal Reserve president Neel Kashkari told Coindesk this week.

Kashkari has previously called bitcoin and cryptocurrencies more broadly "worthless," "fraudulent" and "nonsense" and in 2020 compared the crypto market to a "giant garbage dumpster."

However, despite promising to remain open to crypto, Kashkari asked, "other than as a speculative asset, what does it actually do in the real economy?"

The bitcoin price rally this year has been called a "debasement trade" by JPMorgan analysts who have predicted the bitcoin price could continue to rise on fears of U.S. dollar devaluation and inflation.

Tesla billionaire Elon Musk, appointed to lead the Doge department of government efficiency under the new Trump administration, has led a growing backlash against out-of-control U.S. government spending that exploded through the Covid-era lockdowns.

Kashkari's softening of his stance toward bitcoin and crypto comes as U.S. president-elect Trump has surrounded himself with heavily pro-bitcoin and crypto advisors, including Howard Lutnick, the chief executive of Wall Street giant Cantor Fitzgerald who is heading up Trump's transition team and is in the running to be his Treasury secretary pick.

Trump's victory has propelled the bitcoin price higher over the last week as traders bet his administration will mean an easing of U.S. crypto regulations and a change of leadership at regulatory agencies that have frowned on crypto markets.

Trump has also floated plans to create a U.S. bitcoin strategic reserve—predicting the bitcoin price could eventually eclipse gold—and the possibility of using bitcoin to pay off the U.S.'s $35 trillion debt pile.