With Trump's unexpected victory in the U.S. elections, the global cryptocurrency market is filled with expectations for the future policy environment. The market generally believes that the coming of the Trump administration will bring new opportunities and development prospects for the crypto industry, not only potentially reducing regulatory pressure but also providing a more open policy space. The Republican Party's consistent pro-business stance, combined with Trump's team's free market thinking, leads market investors and industry leaders to optimistically predict that the U.S. regulatory attitude towards crypto will gradually shift, injecting new momentum into the industry. Under such expectations, the price of Bitcoin rapidly surged to $76,400, setting a new historical high.
So, how exactly does Trump's election affect the cryptocurrency market? Next, Odaily Planet Daily will analyze from multiple perspectives, including regulatory trends, the future of Bitcoin, institutional investor expectations, market volatility, and the promotion of DeFi, and gather opinions from various professionals.
Changes in the regulatory environment and new policy directions
In policy terms, Trump's victory has rekindled hope for the cryptocurrency market.
The Bernstein analysis team, led by Gautam Chhugani, pointed out that the inauguration of the Trump administration will help accelerate the replacement of senior personnel at the U.S. Securities and Exchange Commission (SEC), potentially introducing a 'crypto-friendly' new chairman. The Republican Party's support for decentralized finance (DeFi), stablecoins, and other areas may promote the passage of regulations such as the Digital Commodities Consumer Protection Act. These potential policy reforms will help legitimize the crypto market and provide clearer policy guidance for the industry.
Coinbase Chief Legal Officer Paul Grewal expects that under the new chairman appointed by Trump, the number of SEC crypto cases will undergo a 'significant change,' and believes the new administration will reassess all existing crypto cases initiated by Gary Gensler, distinguishing which cases are clearly scams and frauds and which are not.
Coinbase CEO Brian Armstrong expressed optimism about this prospect, believing that a Congress controlled by the Republican Party is 'the most supportive Congress for cryptocurrencies in history,' and pointed out that this is extremely beneficial for the industry's compliance and security. The new government's policy reforms will not only inject confidence into the market but also accelerate the development of stablecoin issuers like Circle and Paxos, speeding up their legalization process in the U.S.
In addition, informed sources revealed that the Financial Innovation and Technology Act of the 21st Century (FIT21), which was passed by the House earlier this year, may be aborted due to Trump's victory. FIT21 aims to create a federal framework for cryptocurrency regulation and define the jurisdictional boundaries between the CFTC and SEC. However, as the support of cryptocurrency lobbying groups shifts towards more favorable legislation, the advancement of FIT21 may be shelved. The source pointed out that since the Republican Party controls the White House, Senate, and may even control the House, supporting more favorable alternative legislation has become a reasonable choice. Thus, it can be seen that the new regulatory environment may become more lenient, providing a good development space for the market.
Bitcoin reserves and market prospects
The positive impact of Trump's election was quickly reflected in the price of Bitcoin. During the election vote counting period, Bitcoin briefly surpassed $75,000, setting a new historical high.
Bernstein predicts that the price of Bitcoin may further rise to $90,000 in the future, with the potential to reach $200,000 by 2025. This expectation is widely recognized by market analysts, especially among institutional investors, as the value attributes of Bitcoin as 'digital gold' are increasingly emphasized.
Sun Yuchen pointed out that Trump's election may bring a '180-degree turnaround' for the Web3 industry and believes that Bitcoin's market performance has not yet fully reflected the far-reaching impact of this policy change. Institutional allocation to Bitcoin will see a significant increase, making it one of the mainstream financial assets, and this trend may further accelerate in the coming years.
Market volatility and trading opportunities
Analysts hold a positive view on the market's volatility.
Rong Ren Goh, portfolio manager at Singapore's Hania Investment, believes that Trump's victory will bring short-term market volatility, which presents new opportunities for traders. These fluctuations mainly stem from market expectations about whether Trump will fulfill his crypto-friendly commitments. Over the past four years, the crypto market has faced numerous challenges due to regulatory pressure, and external investors' confidence in the crypto industry has gradually weakened. As policy tendencies become clearer, market volatility may drive investors to reassess their investment strategies in the crypto market, leading to new trading opportunities.
The attitude of institutional investors and market inflow
As Trump's policies shift towards a more friendly approach to the crypto market, institutional investors' interest in this market is also increasing.
CoinShares Research Director James Butterfill stated that the policy shift under the Trump administration will bring a new wave of capital inflow to digital assets like Bitcoin, especially among institutional investors. Although the crypto market has attracted about $29 billion in inflows this year, he believes this growth still has enormous potential. Especially with an improved regulatory environment and policy support, institutional investors' interest will further increase. Market participants generally expect that as the crypto market is legitimized, digital assets will be more widely accepted in the coming years and further integrated into the traditional financial system.
Bitfinex analysts expect that after Trump's election as president of the United States, the crypto market will usher in a 'new wave of hope.' As the industry anticipates a less hostile attitude from federal agencies towards cryptocurrencies, this trend is expected to facilitate more capital inflow into the Web3 space. Analysts state: 'We expect a significant release of capital for the crypto space in the short term.'
The rise of the DeFi sector and market vitality
Trump's victory may also promote the native sectors of the crypto industry, especially the rise of DeFi. This is because, before the election, Trump's family launched the DeFi project WIFI, which is currently in presale, indicating its emphasis on the crypto native sector. Although Trump's victory did not improve the presale situation of this project, it underscores its importance to the DeFi sector.
Rune Christensen, founder of Sky (formerly MakerDAO), stated on social media that Trump's victory will drive a 'real sustainable revival' of DeFi, significantly increasing the likelihood of a tenfold growth in the number of users in the DeFi sector. Christensen pointed out that DeFi stands to benefit more from the reduction of regulatory uncertainty in the U.S. than other areas of the crypto industry, as its decentralized nature aligns more closely with the free market principles supported by the Republican Party.
