Crypto surges on political respect as Donald Trump courts bitcoin enthusiasts

The cryptocurrency is riding high again on a new wave of political clout as former President Donald Trump is set to speak at a Bitcoin conference in Nashville this week.

The price of Bitcoin (BTC-USD) has surged by over 13 percent in the past month and has climbed above $68,000 in the last 24 hours. This has brought the world’s largest cryptocurrency close to its all-time high set earlier this year.

This week, crypto investors have a few more reasons to be excited, including the Securities and Exchange Commission’s approval for big Wall Street money managers to launch exchange-traded funds holding ether (ETH-USD), the world’s second-largest cryptocurrency.

These ETFs could make ether a potential staple in 401(k)s, IRAs, and retirement plans, bringing more widespread acceptance to the digital asset. Many of the same money managers already have ETFs that invest directly in bitcoin.

But the big event that created the most excitement in the crypto community came this weekend when Trump spoke at the Bitcoin 2024 conference in Nashville.

The seal of approval from the Republican presidential candidate in this year’s presidential election has led many in the industry to expect a friendlier regulatory approach from Washington, D.C. in 2025 and beyond.

Trump and many in his party have embraced digital assets in an attempt to contrast with the Biden administration, which has cracked down on many major players in the industry following the 2022 market crash.

“Republicans will end the Democrats’ illegal and un-American cryptocurrency crackdown,” the Republican Party said in its 16-page party program last week.

Trump, who has called Bitcoin a “fraud” in the past, described the cryptocurrency as “wonderful” in an interview with Bloomberg last week.

Republican presidential candidate former President Donald Trump reacts after speaking at a campaign rally in Grand Rapids, Michigan, on Saturday, July 20, 2024. (AP Photo/Evan Vucci) (ASSOCIATED PRESS)

“The Trump administration is likely to be more open to crypto than the Democrats, I think that’s clear,” Ian Katz, managing director at Capital Alpha Partners, told Yahoo Finance.

“We believe the market has not priced in a positive change in the crypto regulatory landscape and see significant room for institutional investors to invest in crypto and crypto stocks,” Bernstein analyst Guatam Chhugani wrote in a note on Monday.

Trump’s economic policies could help digital assets rise even higher in the coming years, according to some observers.

“What will drive the price of BTC is lower taxes and tariffs,” Dallas Mavericks owner and entrepreneur Mark Cuban said about X last week. “If history is any indication (and it’s not always), that will lead to inflation.”

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Bitcoin has gained over 50% so far in 2024 following a series of developments that have led many in the industry to bet on higher prices.

These range from the expectation that the Federal Reserve will cut interest rates to the broader public acceptance of digital assets by some prominent figures on Wall Street.

One of them is BlackRock CEO Larry Fink. In an interview with CNBC last week, he said that Bitcoin is a “hedge against optimism” and a “legitimate financial instrument.”

“I believe there is a role for Bitcoin in portfolios,” Fink said.

BlackRock CEO Larry Fink. REUTERS/David ‘Dee’ Delgado (REUTERS / Reuters)

BlackRock was among the firms that received approval to begin issuing a spot bitcoin ETF in January, marking a big gain for the first half of the year. The iShares bitcoin ETF (IBIT) saw net inflows of $18 billion in its first six months.

They are also expected to be among the money managers who will receive approval from the SEC this week to launch the first U.S.-regulated ether ETFs. The SEC has already approved exchanges to list those products.

Bitcoin was created in the wake of the 2008 financial crisis as a new type of money that governments could not access, leading some in financial markets to view it as a kind of digital gold or even a safe-haven store of value — even though the cryptocurrency has traded more closely with volatile tech stocks in recent years.

Investors flock to Bitcoin during times of sudden changes in the monetary system, such as the outbreak of the Russia-Ukraine war and the imposition of a series of sanctions on Russia by the United States and its allies.

The next opportunity for this to happen would be for the Fed to start cutting interest rates, with investors expecting this to happen in September at the earliest.

“Bitcoin hasn’t really had the opportunity to shine as a safe-haven store of value asset,” said Joel Kruger, chief market strategist at London-based forex and cryptocurrency trading platform LMAX.

“Everything is built around what’s been happening in the U.S. stock market for years, and I think there will be a rotation. Usually, that’s what triggers it. [interest] “Interest rates are changing.”

David Hollerith is a senior reporter at Yahoo Finance, covering banking, cryptocurrency, and other areas of finance.

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