After Trump's election, cryptocurrencies surged, with $BTC peaking at $82,000 and $DOGE skyrocketing to $0.292. Does this signal the arrival of a bull market?!
With Trump's election as the next U.S. president, both traditional financial markets and the crypto market are actively responding to this election outcome. In 2024, the SEC's fines in the crypto sector have reached $4.68 billion, involving well-known companies like Binance and Coinbase. The market predicts that Trump's administration will lead to a more lenient regulatory approach from the SEC, potentially injecting a 'spring vibe' into the altcoin market.
After crypto-supporting Republican Bernie Moreno successfully got elected as a senator from Ohio, the Republican Party now controls the Senate. Moreno's term is expected to push for the passage of crypto-friendly legislation. Moreover, Gary Gensler may be replaced, and the new SEC chairman is likely to adopt a more favorable policy towards the crypto market. These positive regulatory changes may bring long-term benefits to the altcoin market.
Bitcoin hits a new high, altcoins welcome rotation opportunities.
Bitcoin recently broke through new highs, maintaining a market share of around 60%. Historically, when Bitcoin's market share approaches its peak, altcoins typically see a rotation of funds.
According to Grayscale's October report, net inflows into U.S. Bitcoin trading products have exceeded $24.2 billion, accounting for about 5% of Bitcoin's total supply. However, there remains a large amount of active crypto capital and retail funds in the market. If Bitcoin continues to rise, funds are likely to shift to the altcoin market.
How do institutions view the future trends of altcoins?
Some institutions remain cautious about the future of the altcoin market. Matrixport points out that Bitcoin's market share has risen from 50% to 60%, but altcoins are struggling to replicate the growth seen during the 2020-2021 DeFi boom due to decreased activity and token unlocking pressures. Bitfinex analysts also believe that speculative interest in the altcoin market has declined, with a lack of clear recovery signals in the short term.
However, some analysts still view the potential rotation effect in the altcoin market positively. Jeffrey Ding, chief analyst at HashKey Group, states that Trump's election is seen as a favorable signal for the crypto market, especially regarding the policies supporting Bitcoin proposed during his campaign, which may gradually be implemented once he takes office. Arthur Hayes, co-founder of BitMEX, points out that although post-election liquidity tends to flow towards Bitcoin, altcoins often show higher gains during upward movements due to their lower prices. GSR analysts believe that the regulatory-friendly environment brought by Trump's victory will encourage more project teams to launch tokens in the U.S., injecting new vitality into the altcoin market.
The arrival of the Trump administration may lead to a shift in crypto regulation from strict to lenient by the SEC and CFTC, with the implementation of crypto-friendly policies becoming one of the important factors driving the recovery of the altcoin market. The rebound in Bitcoin's price and the potential for a new round of altcoin rotation cycles are continuously accumulating. For the altcoin market, if it can effectively ride the wave of Bitcoin's popularity, combined with the policy-friendly changes brought by the Trump administration, it will usher in a good opportunity for capital inflow.
From a personal perspective, this may be a good time to pay attention to high-quality altcoins, but caution is still needed regarding the volatility and uncertainty of the altcoin market. The current market sentiment and fund flows help Bitcoin lead, but the investment logic for altcoins may require more refined consideration of their project potential and short-term catalysts. If Trump can truly fulfill his promise of being crypto-friendly, the rotation effect in altcoins may significantly increase, driving a broader market recovery.
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