Though barely a day old, Donald Trump’s victory in the 2024 U.S. presidential elections has already had a massive impact.
Since the Republican is widely seen as pro-business and against government spending and debt, investors reacted ecstatically to his victory, with the stock market adding more than $1 trillion within a single session.
The cryptocurrency market was no slouch either. It saw its total market capitalization valuation rocket $330 billion within approximately 24 hours from $2.19 trillion to $2.52 trillion – a 15% rise. – per CMC data retrieved on November 7.
One of the big reasons for Trump’s positive impact – at least when digital assets are in focus – has relatively little to do with the Republican candidate himself.
Why Trump’s victory is seen as bullish for cryptocurrencies
Instead, the former president and current President-Elect have benefitted from the Democratic Party’s continuously negative stance toward cryptocurrencies and its perceived failures in terms of regulation.
Donald Trump has also included prominent and popular figures within the crypto community in his campaign.
Of these, Robert F. Kennedy Jr. and Elon Musk are, perhaps, the most prominent.
Indeed, RFK Jr. has been noted as the first major truly pro-Bitcoin (BTC) candidate before endorsing Trump, while Musk has had numerous run-ins with digital assets – not all of them positive – over the years.
Tesla (NASDAQ: TSLA) CEO in particular, may have had an impact on certain meme coins – the number of Dogecoin (DOGE) millionaires rocketed 40% after the election, per the research conducted by Finbold.
Finally, though Trump remains somewhat marred by his previously anti-crypto stance and fears he may reverse course regarding digital assets once in the White House, the broader stance of the Republican party has ensured he is viewed as the President who will bring cryptocurrencies closer to the mainstream.
I am not a fan of Bitcoin and other Cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air. Unregulated Crypto Assets can facilitate unlawful behavior, including drug trade and other illegal activity….
— Donald J. Trump (@realDonaldTrump) July 12, 2019
What is next for the cryptocurrency market under Trump administration
Looking forward, expectations for cryptocurrencies are exceedingly bullish. For example, not only has the number of Bitcoin (BTC) millionaires rocketed by over 11,000 due to the election, as previously uncovered by Finbold, but many believe BTC might now be headed toward $100,000.
The increased number of pro-crypto legislators and likely members of the Trump government have also caused significant optimism with hopes running high for greater adoption and greater legitimization of the asset class.
It is also possible that the U.S. will begin engaging more with cryptocurrencies, as Representative Cynthia Lummis hinted the upcoming administration will create a strategic national Bitcoin reserve.
WE ARE GOING TO BUILD A STRATEGIC BITCOIN RESERVE 🇺🇸 🇺🇸 🇺🇸
— Senator Cynthia Lummis (@SenLummis) November 6, 2024
The change in pace might, however, also prove a double-edged sword. Though the approval of spot BTC exchange-traded funds (ETFs) was a major milestone for the sector, it simultaneously failed to truly help Bitcoin skyrocket. Even its latest peaks at $76,480 are not that much higher than the years-old $69,000 all-time high.
Why pro-crypto Republicans could cause another ‘crypto winter’
Furthermore, Republican trademark deregulation might be detrimental in the long run. The ‘crypto winter’ and the scandals that shaped it are arguably more to blame for delegitimizing the entire space in the eyes of the broader public than any government crackdown.
Additionally, while it is a relatively common opinion that the Biden administration mishandled digital assets, they arguably did more damage by failing to act before the crisis that culminated with the collapse of FTX started.
It is, ultimately, always worth remembering that some Republican Representatives have vicariously harmed cryptocurrency traders and investors despite their professed amicability toward the sector.
Tom Emmer, the Representative of Minnesota’s 6th congressional district, gained many political points by criticizing the Securities and Exchange Commission (SEC) after FTX collapsed for not enforcing the law properly and not investigating the exchange earlier.
The very same Tom Emmer was one of the representatives who vocally opposed SEC oversight of the cryptocurrency industry in March 2022, all with the age-old excuse of not stifling innovation.
My office has received numerous tips from crypto and blockchain firms that SEC Chair @GaryGensler’s information reporting “requests” to the crypto community are overburdensome, don’t feel particularly… voluntary… and are stifling innovation.
— Tom Emmer (@GOPMajorityWhip) March 16, 2022
This means he effectively – and likely unintentionally – protected a massive fraudulent operation against regulators, to the detriment of his constituents and investors more broadly.
Featured image via Shutterstock