Associated Press

NEW YORK (AP) — Bitcoin topped $100,000 for the first time as a massive rally in the world’s most popular cryptocurrency, largely accelerated by the election of Donald Trump, rolls on.

The cryptocurrency officially to rose six figures Wednesday night, just hours after the president-elect said he intends to nominate cryptocurrency advocate Paul Atkins to be the next chair the Securities and Exchange Commission.

Bitcoin has soared since Trump won the U.S. presidential election on Nov. 5. The asset climbed from $69,374 on Election Day, hitting as high as $103,713 Wednesday, according to CoinDesk. Just two years ago, bitcoin dropped below $17,000 following the collapse of crypto exchange FTX.

Bitcoin fell back closer to $103,000 early Thursday, but futures are up more than 4%. Even amid a massive rally that has more than doubled the value of bitcoin this year, some experts continue to warn of investment risks around the asset, which has quite a volatile history.

Here’s what you need to know.

Back up. What is cryptocurrency again?

Cryptocurrency has been around for a while now. But, chances are, you’ve heard about it more and more over the last few years.

In basic terms, cryptocurrency is digital money. This kind of currency is designed to work through an online network without a central authority — meaning it’s typically not backed by any government or banking institution — and transactions get recorded with technology called a blockchain.

Bitcoin is the largest and oldest cryptocurrency, although other assets like ethereum, tether and dogecoin have also gained popularity over the years. Some investors see cryptocurrency as a “digital alternative” to traditional money, but the large majority of daily financial transactions are still conducted using fiat currencies such as the dollar. Also, bitcoin can be very volatile, with its price reliant on larger market conditions.

Why is bitcoin soaring?

A lot of the recent action has to do with the outcome of the U.S. presidential election.

Trump, who was once a crypto skeptic, has pledged to make the U.S. “the crypto capital of the planet” and create a “strategic reserve” of bitcoin. His campaign accepted donations in cryptocurrency and he courted fans at a bitcoin conference in July. He also launched World Liberty Financial, a new venture with family members to trade cryptocurrencies.

On Thursday morning, hours after bitcoin surpassed the $100,000 mark, Trump congratulated “BITCOINERS” on his social media platform Truth Social. He also appeared to take credit for the recent rally, writing, “YOU’RE WELCOME!!!”

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Crypto industry players welcomed Trump’s election victory last month, in hopes that he would be able to push through legislative and regulatory changes that they’ve long lobbied for — which, generally speaking, aim for an increased sense of legitimacy without too much red tape.

Trump made a move in that direction Wednesday when he said he intends to nominate Paul Atkins to chair the Securities and Exchange Commission. Atkins was an SEC commissioner during the presidency of George W. Bush. In the years since leaving the agency, Atkins has made the case against too much market regulation. He joined the Token Alliance, a cryptocurrency advocacy organization, in 2017.

Under current chair Gary Gensler, the SEC has cracked down on the crypto industry, penalizing a number of companies for violating securities laws. But he’s also faced criticism from industry players in the process, like the chief legal officer of Robinhood, who described Gensler’s approach toward crypto as “rigid” and “hostile.” Gensler will step down when Trump takes office.

One crypto-friendly move the SEC did make under Gensler was the approval in January of spot bitcoin ETFs, or exchange trade funds, which allow investors to have a stake in bitcoin without directly buying it. The Spot ETFs were the dominant driver of bitcoin’s price before the election — but, like much of the crypto’s recent momentum, saw record inflows postelection.

What are the risks?

History shows you can lose money in crypto as quickly as you’ve made it. Long-term price behavior relies on larger market conditions. Trading continues at all hours, every day.

At the start of the COVID-19 pandemic, bitcoin stood at just over $5,000. Its price climbed to nearly $69,000 by November 2021, during high demand for technology assets, but later crashed during an aggressive series of rate hikes by the Federal Reserve. And the late-2022 collapse of FTX significantly undermined confidence in crypto overall, with bitcoin falling below $17,000.

Investors began returning in large numbers as inflation started to cool — and gains skyrocketed on the anticipation and then early success of spot ETFs. But experts still stress caution, especially for small-pocketed investors. And lighter regulation from the coming Trump administration could also mean less guardrails.

“I would say, keep it simple. And don’t take on more risk than you can afford to,” Adam Morgan McCarthy, a research analyst at Kaiko, previously told The Associated Press — adding that there isn’t a “magic eight ball” to know for certain what comes next.

What about the climate impact?

Assets like bitcoin are produced through a process called “mining,” which consumes a lot of energy. Operations relying on pollutive sources have drawn particular concern over the years.

Recent research published by the United Nations University and Earth’s Future journal found that the carbon footprint of 2020-2021 bitcoin mining across 76 nations was equivalent to the emissions from burning 84 billion pounds of coal or running 190 natural gas-fired power plants. Coal satisfied the bulk of bitcoin’s electricity demands (45%), followed by natural gas (21%) and hydropower (16%).

Environmental impacts of bitcoin mining boil largely down to the energy source used. Industry analysts have maintained that clean energy has increased in use in recent years, coinciding with rising calls for climate protections

By LISA MASCARO and KEVIN FREKING

WASHINGTON (AP) — It’s DOGE time at the U.S. Capitol.

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Billionaire Elon Musk arrived on Capitol Hill on Thursday, expected to be joined by fellow entrepreneur Vivek Ramaswamy, for meetings with legislators behind closed doors about President-elect Donald Trump’s plans to “dismantle” the federal government.

Trump tapped the two business titans to head his Department of Government Efficiency, tasked with firing federal workers, cutting government programs and slashing federal regulations — all part of what he calls his “Save America” agenda for a second term in the White House.

“I think that’ll be a great start to the whole process,” said Rep. Marjorie Taylor Greene, R-Ga., who will chair a House Oversight subcommittee in the new year as part of “building the bridge between Congress and DOGE.”

Washington has seen this before, with ambitious efforts to reduce the size and scope of the federal government that historically have run into resistance when the public is confronted with cuts to trusted programs that millions of Americans depend on for jobs, health care, military security and everyday needs.

But this time Trump is staffing his administration with battle-tested architects of sweeping proposals, some outlined in Project 2025, to severely reduce and reshape the government. Musk and Ramaswamy said they plan to work alongside the White House’s Office of Management and Budget, headed by Trump’s nominee Russ Vought, a mastermind of past cuts.

“DOGE has a historic opportunity for structural reductions in the federal government,” Musk and Ramaswamy wrote in an op-ed in The Wall Street Journal. “We are prepared for the onslaught.”

The duo were invited by House Speaker Mike Johnson to visit Capitol Hill and face a first test in private with House and Senate lawmakers — some eager to hear what they have in mind.

“I am fired up to go out and do something,” said Rep. Aaron Bean, R-Fla., who joined with Rep. Pete Sessions, R-Texas, in launching what they are calling the DOGE caucus in the House, with more than 50 Republicans and two Democratic members.

Bean said the DOGE caucus will unveil an email tip line where people can report wasteful spending. He also envisions a scoreboard of sorts that people can view on a website showing “how many positions we’ve cut, agencies we’ve cut, what the actual number is.”

In the Senate, Sens. Joni Ernst, R-Iowa and Rick Scott, R-Fla., have launched a similar caucus.

While neither Musk nor Ramaswamy have much public service experience, they bring track records in private business — Musk’s operations have vast government contracts — and enthusiasm for Trump’s agenda, having campaigned alongside him in the final stretch of the election.

The world’s richest man, Musk poured millions into a get-out-the-vote effort to help the former president return to the White House. He is known politically for having transformed the popular social media site formerly known as Twitter into X, a platform embraced by Trump’s MAGA enthusiasts.

Despite its name, the Department of Government Efficiency is neither a department nor part of the government, which frees Musk and Ramaswamy from having to go through the typical ethics and background checks required for federal employment. They said they will not be paid for their work.

One good-government group has said that DOGE, as a presidential advisory panel, should be expected to adhere to traditional practices of transparency, equal representation and public input — as happened with similar advisory entities from the Reagan to the Obama administrations.

The Federal Advisory Committee Act “is designed expressly for situations like this,” wrote Lisa Gilbert and Robert Weissman, the co-chairs of Public Citizen in a letter to the Trump transition team.

“If the government is going to turn to unelected and politically unaccountable persons to make recommendations as grand as $2 trillion in budget cuts, it must ensure those recommendations come from a balanced and transparent process not rigged to benefit insiders.”

The nation’s $6 trillion federal budget routinely runs a deficit, which this year ran $1.8 trillion, a historic high, according to the Congressional Budget Office. It has not been balanced since the Clinton administration more than two decades ago.

Republicans generally blame what they see as exorbitant spending for the deficit, while Democrats point to tax cuts enacted under Republican presidents Trump and George W. Bush as the major driver.

Receipts last year as a percentage of gross domestic product came in just below the average for the past 50 years, while outlays were equal to 23.4% of GDP, compared to the 50-year average of 21.1%

Some of the biggest increases in spending last year occurred with politically popular programs that lawmakers will be reticent to touch. For example, spending on Social Security benefits went up 8%, Medicare outlays increased 9%, spending on defense went up 7% and spending on veterans health care rose 14%, according to the Congressional Budget Office.

Rep. Ro Khanna, D-Calif., said he would like to see Musk testify before the House Armed Services Committee on the “bloated defense budget.”

“I’d like to see Elon recommend some cuts. Let’s have him testify,” Khanna said.

He said he’s open to hearing proposals on non-defense spending, but was skeptical.

“If they find waste, maybe, but in terms of big numbers, I mean, no one is going to allow for cutting education funding for special needs kids and for low-income schools, or for cutting Social Security and Medicare,” Khanna said. “If they want to do that, they’re going to hand us a landslide in 2026.”