The Election of Donald Trump and Its Impact on Crypto: A Comprehensive Analysis
Donald J. Trump’s stunning political comeback has sent shockwaves across the globe, with his victory in the presidential election sparking a wave of excitement among crypto enthusiasts. As the industry prepares for a new era of regulatory clarity, analysts are weighing in on what this means for digital assets and major projects.
Bitcoin to $100K and Beyond
Bitcoin (BTC) is already reaping the benefits of Trump’s win, with prices reaching an all-time high soon after polls closed. James Van Straten, senior analyst at CoinDesk, believes that BTC has room to grow even further. "BTC is still below the Consumer Price Index (CPI) inflation-adjusted price, which is $77k, so it is still relatively cheap," he said. "Google Search traffic for bitcoin on a one-year time frame is also near the lows, which shows we are not near any form of euphoria or greed in the market." With two weeks left to see which institutions have bought BTC ETFs and MicroStrategy’s massive ATM equity offering setting the stage for FOMO among other institutions, Van Straten expects prices to soar.
Good News for Tether (USDT), Less So for Circle (USDC)
Tether, issuer of the largest stablecoin USDT, has reason to celebrate Trump’s victory. The company’s relationship with Cantor Fitzgerald, which manages over $100 billion in U.S. Treasuries for Tether, is expected to remain unchanged. However, this may not be the case for Circle (USDC), whose market capitalization is significantly lower than that of USDT. "Tether will likely be given space to keep growing and cement its lead in the stablecoin space," said CoinDesk markets reporter Tom Carreras.
Solana (SOL) to Benefit, Ether (ETH) Less So
Solana’s SOL token stands to gain from Trump’s victory. Analysts expect a more permissive environment for crypto innovation and regulation as a result of the election. With the SEC poised for a change in leadership, it is likely that financial firms will file for spot SOL exchange-traded funds (ETFs). This could lead to increased adoption and interaction with the network among financial institutions.
More Market Breadth Expected
The rise of crypto prices has been largely driven by a small number of popular assets. However, following the election, Andy Baehr, managing director at CoinDesk Indices, expects a broader rally. "This time last year, hopes for bitcoin ETFs drove markets and sentiment higher, with bitcoin in the lead," he said. "This year, the hope is for better regulatory rails that will lead to broader adoption of a wide variety of digital assets."
DeFi to Benefit from Trump’s Victory
Decentralized finance (DeFi) has been relatively muted this cycle. However, Trump’s campaign promises suggest a more favorable regulatory environment for DeFi platforms. "In his campaign, Trump promised to make the U.S. a leading hub for cryptocurrency, which might translate into more favorable regulations for DeFi," said Shaurya Malwa, CoinDesk deputy managing editor for data and tokens.
Goodbye Gensler?
Gary Gensler’s tenure as SEC chair is expected to come to an end with Trump’s victory. The outgoing president has promised to commute the sentence of Silk Road founder Ross Ulbricht and has expressed opposition to a "digital dollar." If Gensler decides to make a stand, he could finish out his term as a commissioner and maintain a Democratic majority at the agency for as long as it takes for the new president to make appointments and the Senate to confirm them.
Conclusion
The election of Donald Trump marks a significant shift in the regulatory landscape for crypto. With Bitcoin prices reaching an all-time high and Tether’s USDT poised to gain from the new administration, analysts are cautiously optimistic about the future. While there may be challenges ahead, one thing is certain: the crypto industry is on the cusp of a new era of growth and innovation.