The U.S. presidential election held on November 5th marked a significant moment for the global crypto market. Over $100 million in crypto was invested in various races across the country with hopes of asserting crypto as a key voter issue. The United States has the largest economy in the world, and the crypto markets depend heavily on the policies of its president. Investors already have a glimpse of what President Trump’s pull can do to the crypto market, with Elon Musk cheering him on. Will the bull run continue with Trump’s ascendance, or will there be a pullback?
Immediate Market Reaction: A Bullish Run
As Trump’s numbers climbed higher on Tuesday night, the cryptocurrency market experienced a significant surge. Bitcoin hit a new record, topping $75,000 due to a surge of over 12%. On the other hand, Ethereum experienced a 9% increase, climbing above $5,500, and altcoins like Solana (SOL), Cardano (ADA), and others were not left behind as they experienced double-digit gains.
Crypto-related stocks like Robinhood Markets, MicroStrategy, and other stocks on the OANDA crypto platform also experienced a leap within hours of Trump’s victory. Due to this, crypto investors believe that the Trump administration will strip back regulations and pass legislation that will give the crypto industry more room to grow.
Trump’s Stance on Cryptocurrency Ahead of Election
Although Trump once expressed skepticism about cryptocurrency, he spent most of 2024 repositioning himself as a pro-crypto presidential candidate. His new stance is a far cry from his last term as president when he criticized cryptocurrency, claiming it was being used to facilitate illegal activities.
His regulatory actions sure backed up his words, as evidenced by the SEC’s controversial lawsuit against Ripple. However, Trump’s tune is completely different in 2024, because he aims to win over single-issue voters and big-ticket donors in the crypto world.
At a crypto conference in Nashville, Tennessee, Trump declared his goal to make the U.S. the crypto capital of the world. He also accepted Bitcoin donations throughout the race and once went viral for paying for a meal at a New York City tavern using Bitcoin.
The Republican National Committee also included crypto in its official party platform, asserting Trump’s goal to defend the right to mine Bitcoin and ensure every American had the right to self-custody of their digital assets.
Trump’s new stance on cryptocurrency could be due to his vice presidential running mate, Sen. J.D. Vance, a longtime crypto advocate. His alliance with Elon Musk, who has always championed cryptocurrencies on social media, could be another factor. Dogecoin, Musk’s preferred coin, spiked by 25% on election night.
Trump’s Proposed Cryptocurrency Policies
At the Bitcoin conference in Nashville, Trump listed a set of crypto-friendly policies he planned to implement once in office. He claimed that the prices of Bitcoin and other cryptocurrencies would continue to rise under his administration. Some of his crypto policy proposals include:
Create a Government Stockpile
During the conference, Trump promised that his administration would keep 100% of all the Bitcoin the government holds or acquires into the future. He stated that the digital currency would be at the center of the strategic national Bitcoin stockpile.
The U.S. government is currently estimated to hold more than $5 billion worth of Bitcoin, most of which was seized from criminal investigations. It’s unclear what the purpose of the stockpile is and if it’s even a realistic move.
The Launch of a Crypto Advisory Council
Trump also proposed launching a group called the Bitcoin and Crypto Presidential Advisory Council. He promised that the council would have rules written by those who love the cryptocurrency industry, not those against it.
Prevention of a New Digital Currency
Central bank digital currencies are a growing trend around the world. However, this idea has been significantly rejected by the U.S. crypto verse from the start. Although the Fed hasn’t decided whether to make a fully digital version of the U.S. dollar, it released a report in January 2022 detailing the costs and benefits. Trump repeatedly spoke against the idea, including at a campaign rally in New Hampshire. He called it a dangerous threat to freedom.
Digital Asset Freedom Act
Trump proposed legislation to reduce the compliance burden for crypto firms like OANDA crypto. He proposed simplifying the Know Your Customer (KYC) and Anti-Money Laundering (AML) requirements while encouraging innovation in blockchain technologies without fearing absurd penalties.
Mining of Bitcoin in America
After a meeting with Bitcoin mining executives in Palm Beach, Florida, Trump pledged to drive the mining of Bitcoin in America. The meeting brought together some of the top American miners in the industry, including representatives from Terawulf, CleanSpark, Core Scientific, and others.
After the meeting, Trump took to social media to share the benefits of the Bitcoin mining business, stressing that if crypto is going to redefine the future, he would prefer it mined, minted, and made in the U.S.
What a Trump Presidency Actually Means for Crypto Investors
Many crypto experts are optimistic about Trump’s return to the white house due to his pro-crypto stance. Adam Blumberg, co-founder of Interaxis, thinks Trump’s administration will bring clarity to the regulation of digital currency. He mentioned that stable legislation will result in more investors in the blockchain.
Trump has also pledged to fire the current chair of the Securities and Exchange Commission (SEC), Gary Gensler, who is popular for his many lawsuits against crypto projects. It is also alleged that he has violated securities laws multiple times. Although Gensler is reviled in the crypto space, his term isn’t up till 2026, but most people expect him to resign once Trump resumes office.
With Gensler out, Trump pledges to replace him with a more crypto-friendly appointee. This could potentially result in revisions of the Howey test, ultimately redefining what security is. A change to SEC leadership could also potentially encourage the introduction of more crypto products in the mainstream financial market.
Global Impact of Trump’s Pro-Stance on Crypto Investment
Trump’s crypto-friendly stance is sure to trigger a domino effect internationally. Countries like Switzerland and Germany that have crypto regulatory policies might revise their framework to stay competitive. Additionally, Asian countries like South Korea and Singapore could potentially introduce new incentives to attract crypto firms. A fear of U.S.-led dominance in the crypto sector would drive this move.
Developing economies in Africa and Latin America might not be left out of the impact. With crypto adoption growing quickly in several African nations, they might align their policies with the U.S. to attract investment from crypto enthusiasts.
How Trump Could Reshape the Crypto Ecosystem
Trump’s presidency is more than a political shift; it represents a turning point for the crypto market. Trump’s permissive stance towards crypto could prove favorable for investors and industry leaders advocating for looser regulations. The road ahead depends on the Trump administration’s ability to balance innovation with oversight to ensure a sustainable future for the crypto market.
