1. Introduction
On November 6, the dust settled on the US presidential election, and Donald Trump was successfully elected. This result has attracted widespread attention around the world, especially in the field of cryptocurrency. In the past few years, the regulatory environment for cryptocurrency in the United States has been relatively strict and uncertain, and Trump's re-election is considered to be an opportunity for a major turning point in the US cryptocurrency policy. During the campaign, Trump repeatedly expressed his support for cryptocurrency, promised to make the United States the "global cryptocurrency capital", and proposed policy proposals such as establishing a national strategic Bitcoin reserve.
Expectations for the improvement of a series of encryption policies after Trump's election have made investors full of expectations for the future of the encryption industry. The cryptocurrency market has risen significantly in a short period of time. Bitcoin has been soaring all the way. This week, the price exceeded 90,000 US dollars. Other cryptocurrencies Currencies also experienced general gains. This article aims to analyze the potential impact of Trump’s election on U.S. cryptocurrency policy, as well as predictions of market trends, and provide corresponding investment strategy recommendations.
2. Trump’s cryptocurrency policy commitment
During the 2024 U.S. presidential campaign, Trump showed a more positive and open attitude on cryptocurrency policy than Democratic candidate Kamala Harris, and put forward a series of policy commitments aimed at promoting the development of cryptocurrency.
1. Change of attitude: from suspicion to support
As early as 2019, Trump tweeted that he was "not a fan of cryptocurrencies", believing that they were "not currencies", and pointed out that their prices fluctuated wildly and lacked reliability. He also criticized Facebook's Libra project, emphasizing that it had "almost no status or reliability" and hinted that US regulators would regulate it.
However, entering 2024, Trump's attitude has changed significantly. He began to express support for cryptocurrencies in public, emphasizing their potential in the future financial system. This shift may be affected by many factors, including the rapid development of the cryptocurrency market, the public's increased acceptance of digital assets, and changes in the political environment.
2. Supportive speeches and statements during the campaign
May 9, 2024: Statement at the NFT Dinner
At the NFT dinner held at Mar-a-Lago, Trump said: "If you support cryptocurrency, you voted for Trump because they (Biden administration) want to end it." When asked about his views on central bank digital currency (CBDC) and "government blockchain", Trump responded: "I think it all has its place." He continued: "We have some incredible things happening, I mean, looking back at cryptocurrency a few years ago, people said it wouldn't succeed, but now it's hitting record numbers. I guess you can say it's a form of currency, and I think I support this, and I'm more and more supportive of this."
May 28, 2024: Bitcoin and the National Debt Problem
David Bailey, CEO of Bitcoin Magazine and a cryptocurrency aide to the Trump campaign, revealed that Trump had asked whether Bitcoin could be used to solve the U.S. national debt problem. This remark shows that Trump has become interested in the potential role of cryptocurrency in the macroeconomy.
June 8, 2024: Commitments in Fundraising Campaign
At a fundraiser in San Francisco, Trump said he would become the "cryptocurrency president" and promised to stop Biden and U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler's "crusade" against cryptocurrencies within an hour of taking office in his second administration. He emphasized that a more friendly regulatory policy would be adopted to support the development of the cryptocurrency industry.
July 28, 2024: Speech at Bitcoin Conference
At the Bitcoin Conference in Nashville, Trump said that he would make the United States the "cryptocurrency capital of the planet" and the "Bitcoin superpower of the world." He also promised to fire Gary Gensler, the current chairman of the U.S. SEC, on his first day in office, and said: "Bitcoin may be our last line of defense against CBDC, and it will help us dominate the energy sector."
3. Crypto-related actions during the campaign
Accepting Cryptocurrency Donations
In May 2024, Trump's campaign team announced that it would accept cryptocurrency donations, and supporters could donate using a variety of cryptocurrencies through the Coinbase Commerce platform. This move shows Trump's open attitude towards cryptocurrencies and hopes to attract more cryptocurrency supporters in this way.
Participate in Bitcoin transactions
In September 2024, Trump used Bitcoin to buy burgers and beer at a bar in New York City that accepted Bitcoin payments, becoming the first US president to use Bitcoin for transactions. He said the payment process was "very simple" and praised the convenience of Bitcoin. This move was seen as a symbolic action of his support for cryptocurrency.
Launching NFT Project
Trump launched several NFT projects during his campaign, including "Trump Digital Trading Cards," to further demonstrate his support for cryptocurrency and blockchain technology. These NFTs received a positive response in the market, demonstrating his influence in the digital asset field.
Interaction with the cryptocurrency community
Trump actively participates in the cryptocurrency community, including attending Bitcoin conferences and meeting with cryptocurrency entrepreneurs. He emphasized the importance of cryptocurrency on these occasions and promised that under his leadership, the United States will become a global leader in cryptocurrency.
4. Inventory of Encryption Policy Commitments
Building a National Bitcoin Reserve
Trump promised that if elected, he would establish a national Bitcoin reserve, retain all Bitcoins held by the government, and make them part of the national strategic reserve. He believes that Bitcoin has long-term appreciation potential and the government should hold and utilize its value.
Establishment of Cryptocurrency Advisory Board
Trump has repeatedly stated that if he is re-elected president, he will fire current SEC Chairman Gary Gensler, appoint a regulator that is more friendly to cryptocurrencies, and establish a Presidential Advisory Committee on Bitcoin and Cryptocurrency to formulate and implement policies that are conducive to the development of the cryptocurrency industry and ensure the United States' leading position in this field.
Opposition to Central Bank Digital Currency (CBDC)
Trump explicitly expressed his opposition to the issuance of CBDC in the United States, believing that it would lead to excessive monitoring of citizens' financial activities and infringe on personal privacy. He stressed that the government should not control or monitor citizens' financial transactions and support individuals' autonomous custody of their digital assets.
Support Bitcoin mining
He said he would defend the right to mine Bitcoin, arguing that it would not only help the development of cryptocurrencies, but also promote innovation and growth in the energy sector. He pointed out that Bitcoin mining can help stabilize the energy supply of the power grid and bring economic and environmental benefits.
Develop a comprehensive cryptocurrency policy
Trump promised to develop a comprehensive cryptocurrency policy covering everything from stablecoin regulation to Bitcoin self-custody to ensure the United States' leading position in the field. He stressed that the government should provide clear guidelines for the cryptocurrency industry to promote innovation while protecting consumer rights.
Silk Road founder Ross Ulbricht's sentence reduced
Trump promised at the Libertarian National Convention in Washington, D.C., that if he is re-elected as president, he will commute the sentence of Silk Road founder Ross Ulbricht on the first day. He believes that Ulbricht's case reflects the government's excessive crackdown on cryptocurrencies and promised to take a more fair approach to similar cases.
3. Current Status, Problems, and Possible Changes of Cryptocurrency Regulation in the United States
1. Current regulatory agencies and their functions
Cryptocurrency regulation in the United States involves multiple agencies, including:
Securities and Exchange Commission (SEC): Responsible for regulating projects that consider cryptocurrencies to be securities, especially activities such as initial coin offerings (ICOs). The SEC has identified many cryptocurrency projects as securities and requires them to comply with relevant securities laws and regulations.
Commodity Futures Trading Commission (CFTC): Treats cryptocurrencies such as Bitcoin and Ethereum as commodities and regulates their derivatives markets. The CFTC oversees derivatives such as cryptocurrency futures and options to ensure a fair and transparent market.
Financial Crimes Enforcement Network (FinCEN): Affiliated with the Treasury Department, it is responsible for enforcing Anti-Money Laundering (AML) and Know Your Customer (KYC) policies, requiring cryptocurrency exchanges and wallet service providers to comply with relevant regulations to prevent illegal activities.
Internal Revenue Service (IRS): Cryptocurrencies are considered property, requiring taxpayers to declare their holdings and transactions and pay corresponding taxes.
2. Problems with the current regulatory system
Regulatory fragmentation: The scattered responsibilities of different regulatory agencies in the United States have led to fragmented regulation of the cryptocurrency industry. The SEC and CFTC are in dispute over how to define cryptocurrencies as securities or commodities, making it difficult for companies and investors to understand the regulatory boundaries of their respective assets.
Lack of a clear legislative framework: Although institutions such as the SEC and CFTC have regulated cryptocurrencies in their respective fields, the United States still lacks a comprehensive legislative framework for cryptocurrencies and cannot provide clear legal guidance for this field. Many projects need to spend a lot of resources to ensure compliance before launching in the United States, and this uncertainty has led some projects and companies to choose to move to countries with a more friendly regulatory environment.
Restricting innovation and market competitiveness: The SEC imposes strict securities regulation on crypto projects, and the CFTC also has certain restrictions on commodity regulation. Overly strict regulation has a suppressive effect on innovation, making it more difficult for cryptocurrency companies and startups in the United States to develop.
Tax Complexity:The IRS's tax requirements for cryptocurrency transactions are complicated, especially when cryptocurrencies fluctuate frequently, making it difficult for users to accurately declare. For many ordinary users, this tax complexity increases the cost of cryptocurrency transactions and limits market activity.
3. Possible changes brought about by the Trump administration
After Trump’s election, the US cryptocurrency regulatory environment may change as follows:
Relaxed regulatory environment: The dismissal of the current SEC chairman and the replacement of leadership may lead to a change in the SEC's regulatory attitude towards cryptocurrencies, relaxing regulation of cryptocurrency projects and encouraging innovation.
More inclusive policymaking: The establishment of a cryptocurrency advisory committee may make the policymaking process more inclusive, incorporate industry opinions, and formulate regulatory policies that are more in line with market needs.
Increased market confidence: Establishing a national Bitcoin reserve shows the government’s recognition of Bitcoin, which may enhance market confidence and attract more investors to the cryptocurrency market.
Enhanced privacy protection: Opposing the issuance of CBDC may protect citizens’ financial privacy and avoid excessive government monitoring of personal financial activities.
Accelerated industry development: Supporting Bitcoin mining and cryptocurrency innovation may promote the development of related industries and enhance the competitiveness of the United States in the global cryptocurrency field.
4. Market reaction one week after Trump’s election
1. Cryptocurrency prices surge
After Trump's election, the cryptocurrency market responded quickly, especially the price of Bitcoin, which broke through the historical high after the election results were announced, reaching $75,000 on the same day and breaking through $90,000 within a week. This increase reflects the market's positive expectations for Trump's crypto policies and investors' optimism about the future economic situation. Crypto assets such as Ethereum, Solana, and Meme Coin also rose accordingly. The total market value of the entire crypto market increased by 26% in a week. As of November 14, the total market value of crypto assets has exceeded 3 trillion US dollars.
Source: https://coinmarketcap.com/charts/
2. Investor sentiment is generally optimistic
Investor sentiment is generally optimistic, and many cryptocurrency industry leaders and investors have expressed their support for Trump's election on social media. Microstrategy founder Michael Saylor even called Trump the "Bitcoin President" and said that this victory marks the arrival of spring for the cryptocurrency industry. Coinbase CEO Brian Armstrong also welcomed "the most cryptocurrency-friendly Congress in the history of the United States." This positive market atmosphere has undoubtedly boosted investor confidence. Market sentiment has shifted from neutral to extremely greedy this week.
Source: https://coinmarketcap.com/charts/fear-and-greed-index/
3. Crypto-related stocks and ETFs rise
Affected by the expectations of Trump's policies, crypto-related stocks and ETFs performed positively. In terms of exchanges, major compliant exchanges such as Coinbase and Robinhood have seen significant increases. Influenced by Trump's advocacy of developing Bitcoin mining in the United States, mining companies such as Cipher Mining, Riot Platforms and Canaan Technology ADR have also seen substantial growth. Starting from November 6, the US Bitcoin spot ETF and Ethereum spot ETF have achieved sustained and substantial net inflows.
Source: https://coinmarketcap.com/etf/
Micro Strategy (MSTR), a major Bitcoin holder, rose by about 13.2%. On November 12, MicroStrategy founder Michael Saylor posted on social media that this year MicroStrategy's fund operations achieved a 26.4% BTC return, bringing shareholders a net income of about 49,936 BTC. This is equivalent to 157.5 BTC per day, and there is no need to pay the operating costs or capital investment usually associated with Bitcoin mining.
Source: https://x.com/saylor/status/1856321148373393786?s=46&t=bcMyidYO0QkS5ajIW9CBdg
5. Analysis of subsequent trends in the crypto market
1. Short-term trends
Market reaction: After Trump was elected, the cryptocurrency market rebounded rapidly, especially the prices of mainstream digital assets such as Bitcoin and Ethereum rose significantly. The market is full of expectations for Trump's policy commitments. This price movement reflects investor optimism about future policies, and the crypto market is expected to continue to be driven by positive sentiment in the short term. According to predictions, in the short term, the price of Bitcoin may exceed US$100,000 before the end of 2024, and some analysts have even given an expectation of US$150,000.
Investor sentiment: Investors generally believe that Trump's election will bring a more relaxed regulatory environment and favorable economic policies. This optimism may lead to more funds flowing into the crypto market, especially speculative trading may increase.
Increased trading activity: As market sentiment rises, trading activity may also increase significantly. Investors will become more actively involved in cryptocurrency trading, especially as policy uncertainty increases, and speculative trading may become dominant. This situation will lead to increased market volatility, and prices may fluctuate violently in the short term.
2. Medium and long-term trends
Policy implementation and industry development: In the long run, whether the Trump administration can deliver on its promises on cryptocurrencies will directly affect the development of the industry. If Trump can successfully implement relevant legislation, such as the (21st Century Financial Innovation and Technology Act) (FIT21) and the (Payment Stablecoin Act), the United States is expected to become a global leader in cryptocurrencies. These policies will provide a clear regulatory framework for the industry, thereby attracting more companies and investors to enter the market.
Technological innovation and capital inflows: The Trump administration is expected to support innovation in financial technology, including the development of blockchain technology and digital currencies. This may be reflected in increased R&D funding, stronger patent protection, and cooperation with the private sector. With more capital inflows, the status of cryptocurrencies as safe-haven assets may also be enhanced, further driving market development.
3. Potential risks and challenges
Policy uncertainty: Although Trump has promised to support cryptocurrencies, if Trump fails to effectively implement his promises or new regulatory measures emerge, market confidence may decline. In addition, there may be resistance and uncertainty in the implementation of policies.
Risk of market overheating: Rapid market growth in the short term may lead to bubble risks, so we need to be wary of price corrections.
Global regulatory environment: Changes in regulatory policies in other countries may also affect the trend of the global crypto market and need to be closely monitored.
VI. Investment strategy suggestions and summary
1. Strategies of different types of investors
Conservative investors: It is recommended to allocate funds mainly to mainstream cryptocurrencies such as Bitcoin and Ethereum, because their market capitalization is large and volatility is relatively small. At the same time, maintain a moderate cash ratio to cope with market fluctuations.
Conservative investors: On the basis of holding mainstream cryptocurrencies, they can appropriately allocate some tokens with medium market value and potential. At the same time, they should pay attention to the fundamentals and technical development of the projects.
Aggressive investors: In addition to mainstream and mid-market tokens, they can allocate some emerging project tokens, but they need to conduct in-depth research on the project background, assess the risks, and take stop-loss measures.
2. Risk assessment and management recommendations
Diversify your investments: Avoid investing all your money in a single asset. Diversifying your investments can reduce risk.
Set a stop loss point: Set a stop loss point for each investment to prevent losses from expanding.
Continuous learning: Keep an eye on market trends and adjust investment strategies in a timely manner.
Psychological Construction：The cryptocurrency market is highly volatile, and investors should remain calm and avoid emotional operations.
In short, Trump's election has had a positive impact on the cryptocurrency market, with high market sentiment and rising prices in the short term. The medium- and long-term trend will depend on the effectiveness of policy implementation, changes in the regulatory environment, and the development of the market itself. Investors should remain cautious, pay attention to policy trends and market risks, formulate investment strategies that suit their own risk tolerance, do a good job of risk management, and make rational decisions.
about Us
Hotcoin Research, as the core investment research department of Hotcoin, is committed to providing detailed and professional analysis of the cryptocurrency market. Our goal is to provide clear market insights and practical operation guides for investors of different levels. Our professional content includes the "Play and Earn Web3" series of tutorials, in-depth analysis of cryptocurrency industry trends, detailed analysis of potential projects, and real-time observation of the market. Whether you are a novice exploring the crypto field for the first time, or an experienced investor seeking in-depth insights, Hotcoin will be your reliable partner to understand and seize market opportunities.
Risk Warning
The cryptocurrency market is highly volatile and investment carries risks. We strongly recommend that investors fully understand these risks and invest within a strict risk management framework to ensure the safety of their funds.
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