On Monday (November 11), Bitcoin surged to a record high of $81,499, as the 'Trump Trade' continued to ferment. Forbes warned that investors should remain cautious, as Trump's involvement in pushing cryptocurrency-related bills after winning the 2024 presidential election, as well as the likelihood of Congress passing cryptocurrency legislation, still remains uncertain.
After news became clear that Trump is about to return to the White House, Bitcoin and the cryptocurrency market unsurprisingly began to rise, reflecting optimism about the potential relief the Trump administration might bring to the industry. There is no doubt that Trump will be more supportive of cryptocurrencies than current President Biden. However, it remains uncertain to what extent he will be involved in driving the industry’s development, and how likely it is for legislation to pass in Congress amidst a crowded legislative agenda.
Trump's entry into the White House means that the executive branch's view on the cryptocurrency industry will be refreshed. 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 hold a positive attitude towards the cryptocurrency industry like Trump, but it is currently unclear what the priority level of this industry will be. The Trump administration may prioritize deregulation for most industries. However, the cryptocurrency sector may run counter to this trend, as industry members are eager for regulatory clarity.
The priority level of these regulatory agencies will determine how long this process takes, but resolving some of the current lawsuits by the SEC might be quicker. However, these agencies will at least issue some form of favorable regulatory guidance, even if not rules.
The most important guidance is for the SEC and CFTC to jointly issue a document outlining 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 considered 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 is passed, it may be similar to the (21st Century Financial Innovation and Technology Act). The advantage of making this change through legislation is that future skeptical governments will find it harder to retract commitments than they would through interpretive rules or agency regulations.
Currently, it seems relatively likely that the Republican Party could achieve a three-peat victory, which is the best electoral outcome the cryptocurrency industry can hope for at the federal level, especially in terms of getting legislation passed in Congress. The most critical victory for the industry is the election of Senator Bernie Moreno defeating Senator Sherrod Brown, as this removes a powerful industry opponent and is crucial for ensuring Republican control of the Senate.
The U.S. House of Representatives has not formally determined yet, as the elections are still ongoing, but according to The Cook Political Report, the Republican Party is in a favorable position to defend its majority seats.
There is no doubt that the outlook for cryptocurrencies under Trump and a unified Republican government has improved compared to the Biden administration. However, this change may take some time to materialize, as new agency heads need to be confirmed by the Senate.
Moreover, even with one party controlling the White House and both houses of Congress, passing laws is notoriously a slow and difficult process.
