- Donald Trump courted Bitcoin enthusiasts by calling himself the “president of crypto.”
- The industry hopes his second term will bring regulatory changes and give bitcoin a role in the economy.
- Trump’s policies could inflate the market capitalization of the entire asset class, Standard Chartered said.
Donald Trump went from Bitcoin cynic to “president of crypto” and it paid off.
Trump disparaged digital assets only a few years ago, describing bitcoin as a scam, and yet his latest election victory was fueled largely by pro-crypto promises that unlocked millions of dollars in funding from campaign.
With Trump back in the White House, it’s now the industry’s turn to see if its bets on a second term have paid off. This is what they want to see.
Regulatory overhaul
One of the core themes of Trump’s crypto platform is the promise to eliminate regulatory restrictions that have weighed on the industry in recent years.
Criticism has been strong over the Biden administration’s handling of the sector, characterized by heated confrontations between the Securities and Exchange Commission and major crypto players.
“These guys, I mean, they put so much uncertainty into this whole industry. It was unbelievable. There was no clear guidance, no regulation,” said Tim Kravchunovsky, CEO of Chirp, a decentralized telecommunications company.
Speaking to Business Insider, he added that the regulatory conflict had pushed the crypto sector out of the United States, costing Washington its competitive advantage.
Matt Mena, crypto research strategist at 21Shares, agrees with this sentiment.
“By creating a more welcoming regulatory environment, this approach could push back projects and founders who have left the country due to regulatory uncertainty, generating thousands of new jobs and millions in tax revenue, strengthening the economy while advancing the crypto industry,” he said. BI by email.
To that end, the industry expects Trump to replace regulatory officials with more crypto-friendly people. The president-elect is already surrounded by figures such as Elon Musk, JD Vance, Robert F. Kennedy and Howard Lutnick, Mena said.
Meanwhile, to make Trump’s plan to turn the United States into a “crypto hub” possible, Kravchunovsky suggested that Washington could provide incentives such as federal subsidies and tax cuts.
Crypto bills
On the legislative front, crypto players will also be watching for the repeal of SAB 121 and the passage of several key bills,
SAB 121, an SEC policy document kept in place by the Biden administration, discourages U.S. lenders from acting as crypto custodians, given that it requires them to hold an equivalent amount of cash against their holdings in crypto. Its removal would allow institutional investors to continue adopting digital assets.
Mena also cited the anticipation around FIT21, a law aimed at clarifying regulatory roles around digital assets. Consumer protection would also be strengthened through this bill, he said.
At the same time, the Trump administration could accelerate progress on three important elements of stablecoin legislation, which aim to put in place guardrails around the future issuance of stablecoins. These dollar-pegged crypto assets are increasingly being used for purposes similar to traditional finance, Standard Chartered said in a note on Friday.
A reserve of bitcoins?
Since Trump’s victory, speculation has surged about the possibility of a strategic bitcoin reserve.
Although the president-elect has not specifically announced such a plan, the idea that his administration would purchase bitcoin as a reserve asset has sparked enthusiasm among crypto bulls.
“We’re already seeing that (crypto) is gaining trust, and it’s gaining trust within institutions and countries. More and more countries are adopting it. So I don’t think it’s a matter of years. I think it’s a matter of months.” “Kravchunovsky said.
Mena sees the price of bitcoin rising to $1 million “almost overnight” if a strategic reserve were established. This scenario would incentivize other countries to build their own reserves, pushing the total market capitalization of bitcoin 13 times higher.
Meanwhile, Geoff Kendrick, head of foreign exchange research at Standard Chartered, sees a Bitcoin reserve fund as a high-impact development with a low probability of happening at the moment.
Investors should instead pay attention to Trump’s separate promise to cease all government bitcoin sales. If this happens, it could cause the price of the token to rise significantly, he wrote.
It’s crypto’s time to shine
Regardless of how the industry evolves under Trump, one thing is certain: the election has cemented crypto markets’ place in the mainstream.
“Crypto is now essentially legal in the United States, marking a major turning point for the industry,” Mena wrote.
According to Kendrick, crypto-friendly adjustments have the potential to bring the total market value of the cryptocurrency market to $10 trillion by the end of 2026, a major jump from the current level of $2.5 trillion. dollars.
He reiterated his hope that bitcoin will reach $200,000 by the end of next year.
