In 2024, crypto markets have witnessed numerous pivotal moments, but none stand out more than the re-election of Donald Trump. With his campaign heavily steeped in pro-crypto rhetoric, Trump has positioned himself as a champion for digital assets.
Now that the election results are in, crypto enthusiasts are all asking the same question: what impact will Trump’s return to office have on the industry? In this analysis, we’ll explore Trump’s journey with crypto and bring in expert insights on what his leadership could mean for the future. Let’s dive in.
Bitcoin Surges Amid Speculation on Trump’s Election Impact
Bitcoin recently reached a new record high, driven by investor optimism about Donald Trump’s potential victory in the U.S. presidential race. On Wednesday morning, the cryptocurrency hit $75,005.08, surpassing its previous peak of $73,797.98 from March. Market watchers see Trump as a pro-crypto candidate, spurring traders to anticipate a favorable shift in regulatory policies under his leadership.
Analysts note a connection between Bitcoin’s price movements and Trump’s positioning in the polls. “The price of Bitcoin has closely followed Trump’s standing in betting markets,” remarked Russ Mould, an analyst at AJ Bell, as the election drew near. Investors may be betting that a Trump victory could lead to policies favoring high-growth assets like Bitcoin.
Trump’s Evolution on Crypto: From Skeptic to Advocate
Despite his former stance branding cryptocurrencies a “scam,” Trump has notably shifted his view in recent years. The former president now advocates for a strong U.S. crypto industry and has even floated ambitious plans to make the country a “bitcoin and cryptocurrency capital.” Among his proposals is an audit of governmental expenditures, which he has suggested could be overseen by Elon Musk, a vocal supporter of alternative investments.
Analysts speculate that Trump’s return to office could bring a renewed focus on deregulation and tax incentives, creating an environment favorable to crypto. “A Trump victory could be the catalyst that pushes Bitcoin into uncharted territory,” commented Nigel Green of deVere Group. Trump’s embrace of digital currency was symbolically underscored in September, when he reportedly used Bitcoin for a publicized burger purchase, signaling his support in a high-profile moment.
In addition to his public advocacy, Trump’s influence in the crypto space has also inspired a wave of “Trump tokens” created by various entities, some with close ties to his brand. Tokens like the MAGA (TRUMP) token have gained notable traction, with millions invested by supporters and crypto enthusiasts alike.
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Trump’s Crypto Venture: The Controversial Launch of World Liberty Financial
In a striking turnaround from his earlier skepticism, Trump has now forged personal ties with the crypto industry.
In September, Trump announced World Liberty Financial, a digital currency platform launched with his sons and a group of entrepreneurs. Despite its grand introduction, the venture faced a stumbling start, with only a fraction of its tokens finding buyers. World Liberty Financial promises lending and borrowing services for crypto holders, a crowded market dominated by established platforms like Aave.
The Trump family’s involvement in the crypto project has drawn both attention and criticism. While the platform aims to leverage Trump’s brand to promote digital currency, industry executives express concerns over the company’s limited investor protections and the mixed records of its founders. Trump’s endorsement, especially during a presidential campaign, raises questions about potential conflicts of interest. The platform’s association with candidates and lack of transparency over tokenholder rights has sparked unease among analysts and regulators.
Trump’s Crypto Policies: What Will Happen to Crypto After Trump’s Win?
Although cryptocurrencies haven’t been mentioned that often during his run, Trump has made it clear that he will enact a few policies that will be beneficial for the digital asset market. Let’s take a closer look at them — and what impact they might have.
Firing the Current U.S. SEC Chairman Gary Gensler
Trump has expressed a commitment to shake up crypto regulations, and his first target is SEC Chairman Gary Gensler. Known for his aggressive approach to crypto regulation, Gensler has spearheaded over 100 enforcement actions against crypto firms, which some view as regulatory overreach. Trump’s message is clear: “On day one, I will fire Gary Gensler,” he said, even though the SEC operates independently, and Gensler would remain as a commissioner regardless of his title.
This sentiment resonates strongly with the crypto community, which has long called for regulatory clarity rather than increased enforcement actions. Trump further announced plans for a “bitcoin and crypto presidential advisory council” staffed by industry advocates rather than “crypto skeptics.” These moves suggest Trump’s administration would offer a more business-friendly regulatory environment, potentially encouraging greater innovation and investment in the U.S. crypto market.
Make Bitcoin Mining American (Again)
In a series of meetings with the U.S. Bitcoin mining leaders, Trump emphasized his desire for all American Bitcoin mining to remain domestic, presenting the industry as crucial for “energy dominance.” In a post on Truth Social, Trump criticized what he referred to as the “Radical Communist Left” for policies he believes hinder American mining operations while benefiting China and Russia. “If crypto is going to define the future, I want it to be mined, minted, and made in the USA,” he stated, aligning his crypto stance with broader economic and national security interests.
Trump’s vision of a U.S.-dominated crypto mining sector taps into the industry’s focus on domestic production, but questions remain around the environmental impacts and the practicality of achieving his ambitious energy production goals.
Read more: Crypto Mining in 2024
The National Crypto Stockpile
One of Trump’s more controversial ideas is the establishment of a “national crypto stockpile.” At a major Bitcoin conference in Nashville, he vowed to ensure that the federal government never liquidates its Bitcoin holdings, effectively establishing a government reserve of the digital asset. He noted that any Bitcoin seized from criminal operations or other government actions would remain part of this stockpile. “If I am elected, it will be the policy of my administration… to keep 100% of all the bitcoin the U.S. government currently holds or acquires into the future,” he said, hinting that he views Bitcoin as a strategic resource.
Currently, the U.S. Marshals Service auctions off seized cryptocurrency assets, sometimes impacting prices. By holding these assets indefinitely, Trump’s policy could help stabilize Bitcoin markets during times of liquidation. However, his approach has raised questions about whether a “crypto reserve” would benefit the broader market or if it might eventually lead to price manipulation concerns.
Fed Rate Cuts and Their Impact on Crypto
While interest rate policies are largely outside the direct control of the president, Trump has promised to advocate for rate cuts if elected. Historically, lower interest rates have had a favorable effect on the crypto market, making it cheaper to borrow and potentially leading to more speculative investment in high-growth assets like Bitcoin. Given the Federal Reserve’s independent role, any influence from Trump’s administration would still require support from the Fed itself, but his promise has already generated optimism within the crypto community.
Crypto Price Predictions for 2024 and 2025 in Trump’s America
Data from Coinmarketcap shows Bitcoin holding steady around the $74,700 mark post-election, with a total market capitalization nearing $1.48 trillion. Other tokens, like Dogecoin, Solana, and Shiba Inu, have seen double-digit gains amid the “Trump rally.” The industry is also seeing heightened trading volumes, reflecting broader demand that could drive prices higher in the coming years.
Institutional and Global Ripple Effects
With Trump’s victory, analysts see a broader influence on global crypto markets. The potential for clear regulations and possibly increased institutional involvement under a pro-crypto administration could stabilize prices in the U.S., with effects that might ripple into global markets. This shift is particularly significant for top altcoins, which have seen high trading volumes and surges of up to 30% post-election.
Growing Market Optimism
Market analysts and major crypto firms have expressed a strong belief that Trump’s policies could usher in an era of regulatory clarity, encouraging more institutional players to enter the market. Sumit Gupta, co-founder of CoinDCX, noted that “a Trump victory could add fuel” to the bullish outlook on Bitcoin, potentially sparking interest in other digital assets as well. With clear policies from a Trump administration, institutional investors may feel more comfortable participating in the market, likely driving Bitcoin’s price higher.
Social media platforms are filled with traders celebrating the win and waiting for the upcoming rally.
Other users have taken to looking at the historical context, which might see BTC rallying by over 2,000%.
Is Crypto Going To The Moon?
While this is a great moment for the crypto market, it’s important to remember that politicians don’t always deliver on their promises. Still, cryptocurrencies thrive on hype and positivity, and we currently have both of these in heaps.
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Disclaimer: Please note that the contents of this article are not financial or investing advice. The information provided in this article is the author’s opinion only and should not be considered as offering trading or investing recommendations. We do not make any warranties about the completeness, reliability and accuracy of this information. The cryptocurrency market suffers from high volatility and occasional arbitrary movements. Any investor, trader, or regular crypto users should research multiple viewpoints and be familiar with all local regulations before committing to an investment.
Source: https://changelly.com/blog/what-does-trumps-win-mean-for-crypto/
