On October 14, Trump's economic adviser Scott Bessent told the Financial Times on Sunday that the new US government led by Donald Trump will support a strong dollar, which is consistent with decades of US policy and downplayed concerns about the depreciation of the dollar during Trump's presidency. Although Trump is seen as pro-cryptocurrency, a strong dollar policy may limit the gains of dollar-denominated risky assets such as cryptocurrencies.
Trump Administration’s Attitude towards Crypto Market
As shown in the figure, in the four years since Trump took office in 2016, the price of Bitcoin first experienced a brief rise and then a relatively large drop. Overall, the price of Bitcoin has remained flat or even increased slightly in these four years.
Trump is more inclined to abandon the "strong dollar policy" and promote the depreciation of the dollar through more aggressive interest rate cuts and other loose monetary policy policies. Facts have also proved that when Trump took office as US President, he pressured the Federal Reserve to cut interest rates and criticized the Federal Reserve's interest rate hike policy.
Trump has always been friendly to cryptocurrencies and even prefers that relevant departments relax their regulation of cryptocurrencies. In his campaign speech, he said: "If elected, government policy will be that the United States will retain 100% of all Bitcoin currently held or acquired in the future. We will retain 100%. This will actually serve as the core of the strategic national Bitcoin reserve. We will take measures to transform this huge wealth into a permanent national asset that will benefit all Americans."
In addition, in terms of cryptocurrency regulation, Trump said, "On my first day in office, I will fire Gary Gensler (current SEC Chairman) and appoint a new SEC Chairman." Not long ago, Crypto.com, one of the world's leading cryptocurrency exchanges, decided to file a lawsuit against the U.S. Securities and Exchange Commission (SEC). The important reason was that the SEC implemented an "illegal rule" on cryptocurrency, which was beyond its regulatory authority.
Cryptocurrency Market Expectations for Trump Administration
Compared with the Harris administration, its presidential rival, its policies are more inclined to strengthen market supervision. Although the Harris administration is expected to strengthen supervision of cryptocurrency exchanges and introduce more compliance measures, it will do more harm than good to cryptocurrency holders who yearn for freedom. At the same time, Trump's policies since taking office have given the cryptocurrency market a better trading environment, enhanced the market confidence of the majority of Bitcoin holders, and also have certain positive expectations for the market.
