Author: Benjamin Taubman, Bloomberg; Translated by: Baishui, Golden Finance
According to Bernstein’s analysis, cryptocurrencies could be major “Trump rally” beneficiaries during the current election cycle as Republican prospects improve and the party’s standard-bearer increasingly embraces pro-crypto views.
Republicans see taking a favorable stance toward the cryptocurrency industry as a way to win over voters and receive campaign funds from super PACs that support crypto politicians, Gautam Chhugani and Mahika Sapra wrote in a report Monday.
The original “Trump rally” was a simultaneous surge in U.S. stocks, Treasury yields and the dollar after Donald Trump won the 2016 presidential election. Trump’s victory this time will lead to a cryptocurrency rally, the report said, which will be driven by institutional adoption and an improved regulatory environment.
“The Republican side sees crypto not only as a vote bank, but also as a meaningful source of funding,” the analysts wrote. “If electoral sentiment shifts toward the Republicans, crypto will ultimately be a major ‘Trump rally’ beneficiary, and the hope of a favorable regulatory regime will change the ‘use case’ narrative around blockchain.”
Trump expressed his support for the cryptocurrency earlier this month when he met with the leaders of several bitcoin mining companies at Mar-a-Lago, saying he would be an advocate for the industry if he were president again.
Trump later posted a message on his Truth Social account saying he hopes all remaining Bitcoin is “Made in the USA!!!”
According to a report from TD Cowen, despite Trump’s pro-crypto signals, he could still change his stance and return to being a crypto skeptic if he’s elected.
Cowen's report noted that Trump's remarks on cryptocurrencies in the first presidential debate of the 2024 election will serve as a weathervane for possible regulatory actions his administration may take.
“(Trump) would be remiss if he suggested anything other than full support, as it could heighten anxiety that if he is re-elected he will revert to the skepticism of his first term,” the report states.
The report also noted that President Joe Biden may use Thursday’s debate to reposition his stance on cryptocurrencies.
During the Biden administration, the SEC has been scorned by cryptocurrency advocates for its crackdown on cryptocurrency trading platforms, accusing them of trading unregistered securities. Still, many observers believe the SEC is softening its stance since approving bitcoin and ethereum exchange-traded funds earlier this year.
Bitcoin ETFs have spurred institutional adoption of the world’s largest cryptocurrency and helped push it up nearly 37% this year. While Ether’s ETF has yet to be officially launched, its price has risen nearly 40%.
“We urge caution in approaching either candidate on cryptocurrency,” the Cowen report said. “Words may matter, but ultimately we think it would be a mistake to assume either candidate will deliver on their promises.”
