How This Crypto Hedge Fund Nailed the Trump Trade

As an analyst with over two decades of experience under my belt, I have learned to not only read the market trends but also delve into the intricacies of politics and their impact on economic landscapes. The 2024 presidential election was no exception, especially when it came to the crypto sector.

The unexpected win of former President Donald Trump, now President-elect, in the American election left many stunned, yet it did not catch Quinn Thompson off guard.

As a crypto investor, I’ve been confidently backing Trump since at least mid-March, and I’ve held my ground even when the market showed uncertainty. Leading up to Tuesday’s election, I strategically allocated my funds by investing in Solana (SOL) and Bitcoin miners specializing in artificial intelligence, despite numerous polls suggesting a tight race or Vice President Kamala Harris as the frontrunner.

The outcome? Lekker’s latest trade has been its most prosperous since the fund was initiated six months back, as Thompson shared with CoinDesk. He chose not to disclose specific figures. Solana (SOL) has seen a 13% increase over the past day and is nearing multi-year peaks. Stocks of AI-focused Bitcoin miners like Core Scientific (CORZ), Hut 8 (HUT), and HIVE (HIVE) saw a roughly 10% rise on Wednesday, while Bitcoin itself climbed 8.7% and reached an unprecedented high of $75,600.

Investors often find it challenging to express political views publicly due to the highly polarized nature of politics. It’s much like avoiding discussions about it with acquaintances, Thompson explained. However, this difficulty makes the allure of investing in a hedge fund specializing in macroeconomics even more appealing.

In an email sent on Wednesday to his fund’s investors, Thompson explained that people choose macro-driven strategies because they must go against the mainstream. To earn money from these strategies, one needs to hold unpopular views for extended periods and develop strong convictions about ideas that often contradict prevailing opinions in the market.

In simpler terms, Trump has not only won both the Electoral College and popular vote, but also secured control of the Senate, with a strong possibility of maintaining the House of Representatives as well. This means they will hold the presidency and control Congress entirely. For Thompson, this indicates a clear mandate for a government that is socially liberal yet fiscally conservative. Such a government, he believes, would likely create a more favorable environment for the crypto sector, potentially easing restrictions imposed by President Joe Biden and even Trump during his first term. Interestingly, Trump has recently changed his stance on cryptocurrency, promising to make the U.S. a leading force in this field.

As an analyst, I find myself standing at the precipice of a momentous day in the realm of cryptocurrency. For four consecutive years, the U.S. government has been a formidable adversary, casting a shadow over the industry with its relentless opposition. However, today marks a significant shift, as the U.S. government’s stance towards crypto has softened in real-time, becoming more impartial rather than antagonistic.

How did he do it?

There’s a few reasons why Thompson bet on Trump.

In the year 2024, voter concerns shifted from the pandemic and racial inequality, which were dominant topics in 2020, to economic matters, immigration, and foreign policy. These issues proved challenging for Harris, as she was exposed to criticism over ongoing conflicts in Ukraine and the Middle East, early-term inflation, and her administration’s stance on illegal immigration.

Additionally, Thompson foresaw challenges with voter turnout among Democrats, as there appeared to be a lack of excitement for Harris, who joined the race in July following Biden’s withdrawal, contrasting with the GOP, who seemed hopeful about their chosen nominee.

Thompson acknowledged that not everything went smoothly in their trade. Specifically, he admitted missing an opportunity to cash out some parts of the trade prior to the October pullback, when bitcoin tumbled from $72,000 down to $67,000. This dip occurred after Trump’s chances of winning, as predicted by Polymarket, dropped from 65% to 55%.

At the last moment, some unexpected or inaccurate poll results caused many individuals to doubt themselves and feel extremely anxious and unsure.