How Donald Trump election can impact Crypto prices
Donald Trump won the presidential election and will start his term in January 2025. How can it affect the market and why?
Trump, who once voiced skepticism about cryptocurrency, spent much of 2024 positioning himself as the pro-crypto presidential candidate. His current stance on Crypto is a departure from his last term. Ripple $XRP was sued by the SEC during his administration , but he changed his tune in 2024 for big donors from the big donors in the Cryptocurrency world and a bloc of single-issue voters.
1. Regulatory Environment
His previous term was relatively quiet on
Crypto Regulation. Again in this term, he could create a favorable environment for crypto growth in the U.S.
2. Economic Policies: Trump has favored tax cuts and economic stimulation policies, which tend to lead to inflation concerns. If his policies stimulate inflation, more investors might look to Bitcoin $BTC and other crypto currencies as a hedge, potentially driving up demand and prices.
3. Dollar Strength: Trump advocates for a strong dollar, but also criticizes the Feds approach. A strong dollar might reduce the attractiveness of Bitcoin as a store of value, but if Trump pushes for a weaker dollar to boost exports, Bitcoin and crypto could see more demand as alternative stores of value.
4. Trade and Global Markets: Any new trade wars or global economic disruptions caused by his policies could lead to volatility in traditional markets, prompting some investors to shift capital to crypto as a hedge against geopolitical instability. It is very likely so major cryptos like Bitcoin and Ethereum $ETH can pump, even before the actual disruptions start.
5. Institutional Influence: As institutional adoption of crypto grows, Trump’s potential influence over financial institutions could affect market dynamics. If large U.S. banks and firms feel comfortable with the regulatory environment, they might increase their crypto investments, potentially driving up prices.
