As the 2024 U.S. presidential election enters its final days, Donald Trump appears to be gaining ground. Although the final outcome is not assured, current trends suggest that if this trajectory continues, Trump will win.
At the same time, bitcoin's
$BTC price has surged, recently crossing the $67,000 mark, a level not far from its all-time high of $73,750 reached seven months ago.
Given this price rise and bitcoinâs new status as a presidential campaign issue for both Trump and Kamala Harris, many are now asking: What impact would a second Trump presidency have on bitcoin policy and its price?
Trump and his close circle of advisors, including Robert F. Kennedy Jr., along with his sons Eric and Don Jr., have expressed an appreciation for the value of bitcoin, which is in sharp contrast to the current administrationâs more skeptical stance.
Meanwhile, the bitcoin community largely views Trump's potential leadership as a boon for the industry, particularly due to his promise to remove Gary Gensler from his position as Securities and Exchange Commission (SEC) Chair.
#SECCryptoRule Changes To Crypto Regulation Incoming?
Gensler has been widely criticized within both the bitcoin and broader crypto space for regulating through capricious enforcement action rather than proactive, principled rule making. Long suspected as having hitched his wagon to Elizabeth Warrenâs Anti-Crypto Army in exchange for a coveted position in a Democratic administration, Gensler may question his political instincts in the face of a Harris loss.
This âregulation by enforcementâ by the SEC has stifled innovation and capital investment in the crypto industry. (Side note: The âcrypto industryâ is just another word for a galaxy of startups and enterprises that are using new technologies to push financial technology forward.)
Crypto companies have been practically begging to be let into the front door of the U.S. compliance and regulatory regime, been rebuffed, and then faced expensive legal consequences for stepping over an invisible line. It is for this reason that the crypto industry has rallied around Trump â and why Harris has not been able to attract their support, having shied away from explicitly rejecting the Biden administrationâs approach.
A change in leadership at the SEC could trigger a seismic shift for bitcoin's regulatory environment in the U.S., but the broader story is even more significant than that.
Recent investigative reporting by Nic Carter uncovered a targeted and possibly illegal effort by regulators in 2022 to shut down crypto-friendly banks. This so-called âOperation Chokepoint 2.0â initiative has been known for years, but its depths have only recently been discovered. Carterâs report revealed a coordinated plan to not only limit access to banking services by any company dealing with crypto, but also to intentionally bankrupt otherwise healthy banks that were willing to work with financial innovators.
Should Trump win and dismantle these behind-the-scenes efforts, it would dramatically change the landscape of fintech. Banks â keenly aware that their traditional business models are underperforming in todayâs economy â already have a compelling incentive to embrace bitcoin. But they cannot make the leap until their compliance departments believe the regulatory posture of the U.S. government has permanently changed. There is little appetite for building new relationships with crypto firms if thereâs a risk that the next administration would pull the rug out from under them.
However, a regulatory thawing in a Trump presidency would be likely to outlast his administration. Major public companies, pension funds, and institutional investors are already starting to add bitcoin to their balance sheets, both in physical form and through ETFs
#ETHđĽđĽđĽđĽ . The recent approval of spot Bitcoin ETF options will invite even more capital inflows and create a new layer of liquidity and price discovery in the market.
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