As a seasoned investor with roots deep in the world of fintech and blockchain, I have witnessed the evolution of digital currencies from a distant observer to a passionate participant. The recent US elections have brought about a fascinating blend of tradition and innovation, with the Democrats setting fundraising records and the Republicans aligning themselves with one of the brightest minds in science and entrepreneurship – Elon Musk.
In my role as a researcher, I’ve found myself captivated by the unexpected twists and high-stakes performances that unfolded during the latest U.S. election campaign. The suspense was palpable long before the final results were announced.
Nevertheless, a striking pattern surfaced as an exception: cryptocurrency has shifted its position from peripheral to central in the political arena. Additionally, the crypto community has assumed a significant role, being targeted extensively during this electoral period.
The Race for the Crypto Vote
Among the early political candidates, RFK Jr. stood out as the most passionate advocate for cryptocurrencies. From the beginning, he made it clear that he was an ally of crypto. When I attended the latest Consensus conference in Austin, I noticed his enthusiasm for the crypto community as he spoke there and saw his campaign vehicle staffed with activists, which remained parked on-site during the entire event.
In a contrasting approach, Kamala Harris largely avoided delving into the cryptocurrency debate during her campaign. Her involvement with the crypto industry was relatively low, which might have been due to influential figures in her party like Elizabeth Warren. It wasn’t until nearly election day that Harris made vague statements about fostering innovative technologies, such as digital assets. These comments were often perceived as coming too late and insufficient by many observers.
Regarding the chosen candidate, Donald Trump’s views on cryptocurrency took many by surprise given his past criticisms like calling it a “scam.” However, during the 2024 election cycle, Trump shifted his stance significantly and became known as the “crypto president,” wholeheartedly endorsing Satoshi’s original vision. This transformation culminated when he spoke at the Bitcoin conference in Nashville.
The strong disagreement among frontrunners, highlighted by RFK Jr.’s joining Trump’s team, created a distinct picture for the crypto community: Trump’s optimism stood out against Harris’s reluctance. This contrast mirrored a connection between Trump’s popularity in polls and the price of Bitcoin.
With Trump’s victory, an intriguing query arises: Is his pro-crypto stance more than just electioneering, or does it merely represent an attempt to attract voters who were traditionally difficult to reach?
Red Wave, Green Market
Following Trump’s victory, it’s not unexpected that crypto supporters are feeling optimistic. It appears possible that prominent figures in the crypto world such as RFK Jr., Vivek Ramaswami, and Elon Musk, known as “the Doge emperor,” might take on roles within Trump’s administration. The “red wave” has already caused a shift in the crypto market, with Bitcoin reaching a new peak of over $93K and other tokens mirroring this trend. Even Coinbase stock is climbing, striving to regain its 2021 record highs.
Not just the statistics, but numerous figures in the cryptocurrency sector have shown their support. These include Brian Armstrong (CEO of Coinbase), Charles Cascarilla (CEO of Paxos), Charles Hoskinson (founder of Cardano), Marc Andreessen (venture capitalist), and the Winklevoss twins all approved of Trump’s victory. Anthony Pompliano, in particular, stated, “We now have our first president who is a supporter of Bitcoin.
The Promised Land?
As a cryptocurrency investor, I find it intriguing to see parallels between the fervor surrounding the crypto industry and the anticipation that followed Donald Trump’s election promises. Just as we looked forward to seeing how his administration would shape America, so too do I watch with interest as the crypto world evolves.
Furthermore, Trump intends to stop the federal government’s Bitcoin sales—actions that typically cause turbulence in the cryptocurrency market. He has also voiced apprehension about the U.S. creating a Central Bank Digital Currency (CBDC), labeling it “risky” and predicting it could ignite a “currency Cold War,” reminiscent of the era gone by.
Trump further promised to appoint a new Securities and Exchange Commission (SEC) Chairperson in place of Gary Gensler, who is perceived by many within the cryptocurrency community as unfriendly. With more than 100 enforcement actions against crypto businesses under his tenure, Gensler’s exit might signal a change in direction.
One pledge under consideration is to establish a friendlier setting for cryptocurrency mining within the United States, a shift from the prior administration’s approach of taxing Bitcoin mining due to ecological concerns. Notably, Trump’s assurance of Federal interest rate decreases could potentially enhance investments in cryptocurrencies.
What’s Next?
Following the fallout of the celebrations, what might the cryptocurrency industry reasonably anticipate from a Trump administration? It’s important to understand that the election’s influence goes beyond just the White House. Approximately 250 pro-crypto members of Congress were elected, and their presence in both the House and Senate will play a substantial role in shaping crypto legislation.
In essence, there could be a shift towards less government regulation and reduced taxes, which tends to benefit cryptocurrency businesses. Importantly, crypto miners might avoid heavy environmental taxes and potentially receive special tax breaks designed to stimulate U.S. manufacturing growth.
As a crypto investor, I eagerly anticipate the “when,” not “if,” change in leadership at the SEC, with names like Dan Gallagher, Paul Atkins, and Hester Peirce being mentioned as potential successors. These individuals are known for their approach to clear, constructive regulation within the crypto space. The incoming SEC leader is expected to shift away from Gensler’s enforcement-focused regulatory strategy and establish a well-defined framework for exchanges, DeFi protocols, token issuers, and stablecoins.
Expanding the approval of crypto ETFs beyond Bitcoin (BTC) and Ethereum (ETH) could potentially gather more momentum, thereby enabling assets like Ripple (XRP), Solana, and other cryptocurrencies to present additional investment opportunities in the digital currency market.
A possible adjustment under consideration is transferring certain powers from the federal government to the individual states, an approach that aligns with traditional Republican values. This could lead to diverse regulatory systems among states, potentially creating a form of regulatory competition similar to what’s observed in nations such as the United Arab Emirates, where it has proven beneficial.
Not All Roses
During the election period, there’s a tendency for grand pledges, but not all promises can be fulfilled, and some might even contradict each other. It’s crucial to recognize that Trump has more pressing matters on his plate, such as immigration policies, energy strategies, and global conflicts, which are likely to overshadow the focus on cryptocurrency.
At times, Trump’s wider objectives might potentially conflict with the needs of cryptocurrency. Being a decentralized, boundary-less sector, cryptocurrency thrives on free trade and unrestricted data exchange – principles that often contrast with protectionist policies and tariffs. For instance, limitations on work visas could pose challenges for the U.S. tech industry, which includes crypto, as it relies heavily on international expertise and face-to-face global interactions.
Additionally, although Trump’s team has expressed doubts about a U.S. Central Bank Digital Currency (CBDC), rapid advancements globally could compel the administration to change their stance. For instance, China is rapidly developing its own CBDC, and the BRICS nations are moving towards a unified currency. If Trump sees America’s broader economic interests as being threatened, it wouldn’t be unusual for him to shift his position on CBDCs.
Realistically Optimistic
To put it simply, having a Trump presidency could potentially bring beneficial opportunities for cryptocurrencies. The involvement of individuals supportive of crypto within his potential team, the acknowledgment of crypto as a viable financial and social movement, and the lack of notable anti-crypto figures like Gary Gensler and Elizabeth Warren in significant positions are all indicators of a positive trend. However, it’s important for the crypto community to keep their hopes in check. This administration has numerous pressing issues to address, not all of which will necessarily be favorable towards crypto.
In a stunning turn of events, the latest U.S. elections showcased an unexpected and thrilling series of occurrences. On the Democratic side, they shattered fundraising records, while on the Republican side, they allied with one of the most brilliant minds in science and business – Elon Musk.
Authored by:
Michael Pearl, an accomplished professional with over ten years of experience in fintech and blockchain business development and expansion, previously worked as COO at Intentable, held content director positions at Finance Magnates, and served as global economy editor at Calcalist. Additionally, he is the host of “Free and Decentralized” podcast and will soon launch a new show titled “Web3 Watchdogs.” Moreover, he is a lawyer, having earned a Master’s degree in International Relations and a Bachelor of Law from the University of Haifa.
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2024-11-14 18:29