Bitcoin soared to a historic high of $81,499, and the 'Trump Trade' continues to ferment. Forbes warns that investors should remain cautious, considering that after Trump's potential victory in the 2024 presidential election, the extent of his involvement in pushing cryptocurrency-related legislation and the likelihood of Congress passing crypto bills remain uncertain.
As news of Trump's impending return to the White House became clear, Bitcoin and the cryptocurrency market unsurprisingly began to rise, reflecting optimism about the relief the Trump administration may bring to the industry. It is undeniable that Trump will be more supportive of cryptocurrency than current President Biden. However, given the crowded legislative agenda, there is uncertainty about the extent to which he will engage in promoting the industry's development and the likelihood of a law passing through Congress.
Trump's entry into the White House means that the executive branch's view of the cryptocurrency industry will be completely renewed. However, his regulatory nominees will be crucial in shaping his administration's policies towards the industry. Key positions to watch include who Trump chooses to lead the SEC, CFTC, and the Treasury.
All candidates may have a positive attitude towards the cryptocurrency industry, similar to Trump, but it is currently unclear what priority this industry will hold. The Trump administration may prioritize loosening regulations across most sectors. However, the cryptocurrency sector may run counter to this trend, as industry members are eager for regulatory clarity.
The priority level of cryptocurrency for these regulatory agencies will determine how long this process takes, but resolving some ongoing lawsuits with the SEC could be quicker. Nonetheless, these agencies will at least issue some form of favorable regulatory guidance, even if not in the form of rules.
The most important guidance will be a document jointly issued by the SEC and CFTC explaining how the two agencies determine whether tokens are securities or commodities. If implemented under the Trump administration, this guidance may lean towards the industry's preferred view that most tokens will be commodities rather than securities.
However, the issue of token classification is also one of the areas Congress may address through legislation. If a cryptocurrency-related bill passes, it may resemble the (21st Century Financial Innovation and Technology Act). The advantage of making this change through legislation is that a future skeptical government will find it harder to reverse commitments than through interpretive rules or agency regulations.
Currently, the likelihood of a Republican trifecta seems relatively high, which is the best electoral outcome the crypto industry can expect at the federal level, especially for those trying to pass legislation through Congress. The most critical victory for the industry is the election of Senator Bernie Moreno over Senator Sherrod Brown, as this removes a powerful opponent and is vital for ensuring Republican control of the Senate.
The U.S. House of Representatives has not yet officially determined its composition, as the election is still ongoing, but according to The Cook Political Report, the Republicans are in a favorable position to defend their majority.
There is no doubt that the outlook for cryptocurrency under Trump and a unified Republican government is better than during the Biden administration. However, this change may take some time to manifest, as new agency heads will require Senate approval.
Moreover, even if one party controls the White House and both houses of Congress, passing laws is notoriously a slow and difficult process.
