Key takeaways
- Trump’s victory is seen as a positive development for crypto, as illustrated by the latest rise in bitcoin prices, which had previously reached record highs.
- Clearer regulation for stablecoins and crypto assets in general could lead to progress in Congress as more pro-crypto lawmakers take office.
- Two areas to watch under Trump could be the creation of a strategic Bitcoin reserve and the growth of the Bitcoin mining sector.
The cryptocurrency industry is looking forward to better days.
Specifically, Donald Trump’s return to the White House is seen as a positive development for crypto regulation and the potential development of a strategic Bitcoin stock. This outlook has sent bitcoin (BTCUSD) higher today, with the leading cryptocurrency hitting an all-time high above $75,000 late Tuesday and, more recently, holding just below that level.
Regulatory clarity for crypto?
One of the crypto industry’s biggest concerns in recent years has been the Securities and Exchange Commission’s approach to enforcement. The SEC has been criticized by crypto advocates for perceived jurisdictional overreach, filing lawsuits against crypto exchanges Binance, Coinbase, Kraken and others.
During his speech at the Bitcoin 2024 conference in July, Trump promised to end the current administration’s “anti-crypto crusade” and replace SEC Chairman Gary Gensler on “day one.” At the same event, he proposed the creation of a bitcoin stock.
This election also brought more pro-crypto lawmakers to Congress, making industry supporters more optimistic. The results could mean rapid progress on stablecoin-related bills and clarification of when a crypto asset is a security, Bernstein analysts said, according to a CoinDesk report.
They could also presage new exchange-traded crypto funds, like the one recently offered by crypto asset manager Bitwise for XRP.
What’s next for Bitcoin?
Trump previously pledged to push for the development of a strategic bitcoin stockpile if re-elected. While such a stockpile does not necessarily involve purchasing additional bitcoins on top of what the country already has, it could have side effects on how the cryptocurrency is viewed by other governments around the world.
Additionally, Trump has talked about further developing the bitcoin mining industry in the United States, saying he would like to see every bitcoin made in America. Bitcoin mining stocks such as Marathon Digital (MARA), Riot Platforms (RIOT), Hut8 (HUT), and CleanSpark (CLSK) rose on Wednesday.
Matt Hougan, CIO of Bitwise, expects the price of Bitcoin to exceed $100,000 before the end of the year. Still, he said, crypto investors should use their best judgment.
“Not all crypto projects are good and not all will be successful,” Hougan wrote in a note Wednesday. “All a regulatory reset will do is put crypto on a level playing field, where it can succeed or fail on its own merits. It will be up to investors to separate the wheat from the chaff and to take a disciplined approach to assessing risk.”
