Trump’s win is big for Crypto, but we keep expectations in check (Ed Op.)

The recent US election campaign brought surprises and drama on multiple fronts, even before the results came in.

However, one prominent trend emerged as an outlier: crypto has moved from the fringes to the heart of the election stage. In addition, the community has become a key demographic, heavily courted throughout this election cycle.

The race for the crypto vote

The most vocal proponent of crypto among the initial candidates was RFK Jr., who positioned himself as an ally of crypto from the start. I witnessed his eagerness to process crypto voting when I heard him speak at the last Consensus conference in Austin and saw his campaign truck, manned by activists, parked there during the days of the event.

Kamala Harris, on the other hand, largely avoided the crypto debate. His campaign showed minimal engagement with the crypto industry, perhaps influenced by key figures in his party such as Elizabeth Warren. Only closer to election day did Harris make general remarks about “fostering innovative technologies,” including digital assets, a gesture many dismissed as “too little, too late.”

As for the winning candidate, Donald Trump’s stance on crypto was a surprising development for those who remembered his previous statements, including labeling crypto a “scam.” In the 2024 election cycle, Trump emerged as a “crypto president” and enthusiastically singled himself out as a supporter of Satoshi’s vision. This transformation peaked with his appearance at the Bitcoin conference in Nashville.

This strong division of position among the favorites, accentuated by the addition of RFK Jr. to Trump’s team, presented a clear picture for the crypto community: Trump’s bullishness contrasted with Harris’s reluctance. This dichotomy reflected a correlation between Trump’s voting status and Bitcoin prices.

Now that Trump has won, the real question arises: Will this crypto-friendly rhetoric translate into policy, or was it simply a campaign strategy to attract previously hard-to-reach voters?

Red Wave, Green Market

With Trump’s victory, it’s no surprise that crypto enthusiasts are optimistic. It seems likely that crypto champions like RFK Jr., Vivek Ramaswami, and “Doge Emperor” Elon Musk could join Trump’s cabinet in some shape or form. The “red wave” has already turned the crypto market green: Bitcoin recently hit an all-time high, reaching over $93,000, with many other tokens following suit. Even Coinbase shares are rising, aiming to recapture 2021 bullish highs.

Beyond the numbers, many crypto leaders have expressed their approval. Figures including Coinbase CEO Brian Armstrong, Paxos CEO Charles Cascarilla, Cardano founder Charles Hoskinson, venture capitalist Marc Andreessen and the Winklevoss twins celebrated Trump’s victory. Anthony Pompliano notably commented, “We now have the first president of Bitcoin.”

The Promised Land?

To understand the crypto industry’s enthusiasm and gauge what the future holds, we can look at Trump’s campaign promises. Among his proposals, he has talked about the formation of a cryptography advisory committee, which would likely be made up of crypto insiders.

Additionally, Trump has promised to halt the federal government’s sale of BTC, events that historically disrupt the crypto market. He has also expressed concern over the US issuance of a Central Bank Digital Currency (CBDC), calling it “dangerous” and warning that it could trigger a “Cold War era” in currency.

Trump also pledged to replace SEC Chairman Gary Gensler, a figure many in the crypto world view as hostile. With more than 100 enforcement actions against crypto companies, Gensler’s departure could signal a change.

Another promise is to create a more favorable environment for crypto mining in the US, a linchpin of the previous administration’s tapering of BTC production on environmental grounds. Above all, Trump’s promise of Fed rate cuts may further boost crypto investments.

what’s next

After the confetti has settled, what can the crypto industry realistically expect from a Trump administration? First, it is crucial to recognize that the impact of the election extends beyond the Oval Office. Around 250 pro-crypto members of Congress were elected and their voices in the House and Senate will significantly shape crypto policy.

On the high end, we can see deregulation and lower taxes, both favorable to crypto businesses. In particular, cryptominers will likely not face high environmental taxes; they could even benefit from targeted tax cuts aimed at revitalizing American manufacturing.

Gensler’s replacement is widely seen as a “when,” not an “if” event, with names like Dan Gallagher, Paul Atkins, and Hester Peirce emerging as potential successors, figures more inclined toward clear and constructive regulation of crypto . The SEC’s new leader is expected to reverse Gensler’s regulation-by-application approach and establish a definitive framework for exchanges, DeFi protocols, token issuers and stablecoins.

The crypto ETF push beyond BTC and ETH may also gain traction, opening the door for XRP, Solana and others to offer the public new crypto investment options.

Another potential change involves delegating some federal authority to the states, a concept aligned with Republican ideals. This could encourage varied regulatory frameworks between states, introducing regulatory arbitrage that has proven effective in countries such as the United Arab Emirates.

Not all roses

While the election season is ripe for big promises, not all promises will be kept and some may be contradictory. First, it’s important to understand that Trump has bigger fish to fry, from immigration and energy policy to global conflicts, which will likely take precedence over crypto.

In some cases, Trump’s broader goals could even counter the interests of crypto. As a decentralized, borderless industry, crypto depends on free trade and the open flow of data, values ​​that clash with isolationist policies and trade tariffs. For example, potential restrictions on work visas could hamper the US tech industry, including crypto, which relies on international talent and face-to-face global gatherings.

Also, while the Trump team has shown skepticism toward a US CBDC, global developments could force the administration’s hand. China is moving forward with its own CBDC and the BRICS nations are moving towards a unified currency. If Trump were to perceive that America’s broader economic interests are at stake, a pivot on the CBDC front would not be surprising.

Realistic optimist

In short, a Trump presidency offers promising prospects for crypto. The presence of crypto-friendly figures on its potential team, the recognition of crypto as a legitimate financial and social movement, and the absence of staunch crypto-skeptics like Gary Gensler and Elizabeth Warren in key roles indicate positive momentum. While some of Trump’s promises may materialize, the crypto community would do well to temper their expectations. This administration faces numerous critical challenges, and not all decisions will be pro-crypto.

The recent US election was surprising and dramatic on many levels. Democrats managed to break fundraising records, while Republicans joined forces with one of the brightest scientific geniuses and entrepreneurs: Elon Musk.

Author:

Michael Pearl is a seasoned fintech and blockchain executive with over a decade of experience in business development and growth. Before joining Cyvers, he was the COO of Intentable and was the director of content at Finance Magnates and global economics editor at Calcalist. Michael is also the host of the podcast “Free and Decentralized” and is launching a new podcast called “Web3 Watchdogs”. He is a lawyer and has a master’s degree in International Relations and a degree in Law from the University of Haifa.

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