Will Trump’s return to power mean changes for cryptocurrency? For the faithful and for buyers and sellers of the potential $2 trillion asset, Trump winning represents a game changer. On the policy front from changes in laws to possible policy improvements, his administration has the potential to give direction to the crypto industry in ways that nobody expected. Below, let’s look at how with this election outcome, the world of digital assets may shape up.
After Trump won the presidency, the price of Bitcoin went up to its peak. Despite the market volatility, investors expect better policies from Trump’s administration, with bitcoin hitting $75k recently. The positivity surrounding his win is the hope that he will promote policies which foster the growth of digital assets and bring more clarity to the investors.
The regulation of crypto has been a big topic of discussion. The US Securities and Exchange Commission (SEC) has been extremely hostile to enforcement for years under the previous administrations and that has frustrated industry advocates.
While Trump is known to be quite positive towards cryptocurrencies, and with Congress containing more representatives with positive attitudes toward cryptocurrencies, there is hope again. The administration is expected to prioritize clear rules around digital assets, such as when a token is a security. This could reduce the chances of enforcement measures that are synchronized and might help spur more growth in the Plastic sector.
Trump's election campaign promises included appointing a new SEC chair and changing rules to eradicate what he called an ‘anti-crypto witch hunt’. As per the report, his administration will possibly pursue the policy of giving clarity on the rules of the trading market. Such a step can result in less ambiguous possibilities for companies involved in the crypto sphere. This clarity might also help advance the key bills regarding stablecoins and crypto exchanges faster.
Trump’s proposal for a national Bitcoin reserve is one of his surprising ideas. By holding this strategic bitcoin stockpile, the United States can take the lead in world cryptocurrency holdings. The detail of this stockpile is unclear but the impact could be significant. The specifics of this stockpile are unclear, but the implications are large.
Such a reserve would send a signal that the US recognizes Bitcoin as a potential digital asset. It could also help other countries to follow suit, with the potential for a wave of countries to establish digital asset reserves around the world. Additionally, it would encourage other countries to recognise cryptocurrency and establish regulations around it.
Trump has also praised the expansion of the domestic bitcoin mining industry. During his recent presidential campaign, he said that America should become the global hub of bitcoin mining. It would include tax incentives to build more jobs in the sector and to develop US-based infrastructure. With the rise of domestic mining operations, the US may increasingly have more control over the Bitcoin network, especially when using more of these offers. These changes have driven some gains for mining stocks including Marathon Digital, Riot Platforms and Hut8.
The market may see progress with the help of a pro-crypto administration, which would progress the cause of Crypto Exchange Traded Funds (ETFs). As an example, roughly a month ago, Bitwise put forth an ETF for the token, XRP. If the ETFs pass this hurdle, investors could have a very easy, controlled way into crypto assets. These are so moves which might be able to stabilize the market and bring more mainstream investors.
Some analysts have been so optimistic about Trump's win that they got bold. Bitwise CIO Matt Hougan recently said Bitcoin could hit $100,000 by year’s end. But Hougan too was wary. A regulatory reset will make crypto play on level ground, but not every project will survive. However, investors should be vigilant, differentiating quality projects from questions without good fundamentals.
Trump’s return to the White House may indeed be a turning point for cryptocurrency. His administration’s policies will likely lead to growth through regulatory clarity and even things like a strategic Bitcoin reserve. The market could be flooded with innovation and growth on a large scale, making the US the voice of a crypto revolution.
In the coming years, crypto investors may see a more transparent, regulated and accessible market as well. Watch closely what industry leaders and investors will do, as the crypto landscape evolves, and how Trump moves.