Crypto Industry Becomes a Major Donor in the US Election
The latest surge in Bitcoin prices is related to Trump's efforts to tie the MAGA ideology to Bitcoin during his campaign. Trump described Bitcoin as a "technological and human achievement miracle" and proposed granting Bitcoin the same reserve currency status as the US dollar, maintaining a national strategic Bitcoin reserve, and turning the US into a cryptocurrency hub. During his campaign, Trump demonstrated strong support for the crypto industry, which was reflected not only in his public statements but also in the influx of massive funding. According to data from the Federal Election Commission (FEC), political action committees (PACs) and other organizations supporting the crypto industry raised over $245 million for the 2024 presidential election, accounting for nearly half of corporate donations. Furthermore, Trump's crypto-centric platform attracted young voters and tech supporters. Statistics show that about 20% of US adults held crypto assets in 2023, and this group strongly supported Trump's campaign. This resonance helped him secure a broader voter base and contributed to Bitcoin's record highs during the election period.Only by Holding Cryptocurrencies Can Crypto-Friendly Policies Be Formulated
As the first US president to openly support the crypto industry, Trump's crypto policy team is already taking shape. Among his cabinet members, 25 are crypto-friendly, with varying degrees of support for cryptocurrencies, including the Vice President, Treasury Secretary, Commerce Secretary, National Security Advisor, Director of National Intelligence, and the Secretaries of Health and Human Services and Government Efficiency. Other key positions, such as the White House's AI and Crypto Affairs lead and the new SEC Chair, are also held by crypto supporters. In addition to relevant personnel appointments, Trump not only actively or passively holds crypto assets but is also actively involved in the crypto sector through his business ventures. From his early NFT sales to his current WLIF project, his application to create a crypto payment service for his social media platform, and his acquisition of the Bakkt exchange, Trump's participation in the crypto industry has become increasingly deeper. As a policymaker, only by truly holding cryptocurrencies can one formulate genuinely crypto-friendly policies and better coordinate the relationship between the government and the crypto industry. Trump's personnel and business moves in the crypto space have boosted market confidence, and the market remains optimistic that he will fulfill the promises made during his campaign.What Measures Will Trump Implement After Taking Office?
1. Issue a Series of Crypto-Friendly Executive Orders on the First Day
One of the most anticipated changes under the Trump administration is a more crypto-friendly regulatory environment. According to The Washington Post, Trump is expected to issue an executive order on his first day in office, addressing issues such as "de-banking" and the repeal of controversial crypto accounting policies that require banks holding digital assets to treat them as liabilities. The order may also include the establishment of a Cryptocurrency Council. These upcoming administrative measures aim to create a supportive environment for the crypto industry.2. SEC Regulation Relaxation and More Crypto ETFs
Many of Trump's cabinet picks are crypto-friendly representatives, and the new SEC Chair is also a crypto supporter. The market expects that after taking office, they will review the previous chair's rules and court enforcement actions, some of which may ultimately be withdrawn. The SEC is also expected to adopt a more lenient approach towards cryptocurrencies, creating a more favorable regulatory environment. Additionally, more crypto ETFs, such as those for SOL and XRP, are expected to be approved this year, providing investors with more options.3. Clarify Regulatory Jurisdiction and Reduce Regulatory Restrictions
With the Republican Party's sweeping victory in this election, controlling both the House and Senate, the legislative barriers are likely to be reduced. This political landscape may help expedite the passage of bills aimed at establishing a clear regulatory framework for digital assets, such as the 21st Century Financial Innovation and Technology Act. This bill, proposed in 2023, aims to create a regulatory framework for the US digital asset market and provide clear rules for market participants. Currently, the US crypto regulatory system is quite chaotic, with the IRS, SEC, and Commodity Futures Trading Commission all having different views, leaving the classification of cryptocurrencies as securities or commodities unresolved. Clarifying the regulatory framework and jurisdiction is a primary task for the industry's development. Under Trump, the passage of this bill may be accelerated, providing much-needed regulatory clarity for crypto entrepreneurs. Additionally, Trump's "America First" strategy is likely to be reflected in the crypto sector, such as reducing regulatory restrictions on crypto transactions, lowering market entry barriers, providing tax incentives or subsidies, and attracting technology R&D and talent to the US, allowing more "Made in America" cryptocurrencies.4. Gradual Implementation of a Bitcoin Strategic Reserve
The Bitcoin strategic reserve is a highly anticipated topic in the market and the most exciting proposal for the crypto market. However, its implementation may face many legal and regulatory challenges. For example, whether the US Treasury can increase its reserves by purchasing Bitcoin would require Congressional approval. Additionally, Federal Reserve Chair Powell has previously stated that the Fed has no intention of participating in government Bitcoin hoarding plans. Nevertheless, Trump may still be able to push forward the Bitcoin reserve plan through executive orders, bypassing Congressional approval, although this action would carry significant administrative risks. While the US Bitcoin reserve proposal is controversial, it reflects a bold vision. Currently, five states have already taken the initiative and proposed related plans. Overall, the Bitcoin strategic reserve may take longer to be approved and implemented, but active progress is expected by 2025, such as completing policy research and formulating specific implementation details.A Potential Market Surge During the Power Transfer Next Week
On January 20th, the day of the power transfer, which also happens to be Martin Luther King Jr. Day, the US stock market will be closed, making it easier for market sentiment to spill over into the crypto market. Additionally, Trump's inauguration ceremony is expected to invite many prominent figures from the crypto industry. If he mentions Bitcoin and cryptocurrencies in his speech, the market may experience another FOMO-driven surge. After the formal inauguration, the "Trump effect" driven by emotions will officially come to an end. From the campaign to the election, the crypto industry's biggest tailwinds and expectations have already been priced into the market. The long-term trend will depend on the actual policy implementation and market confidence.The current macroeconomic environment has undergone some new changes, and the cryptocurrency market is increasingly affected by this. The market is generally concerned that Trump's tariff and immigration policies will lead to a rising trend in inflation, and some institutions even believe that the Federal Reserve may not cut interest rates throughout this year, or even raise interest rates, and even if interest rates are cut, the magnitude will be very limited. The recent significant correction in the US stock market is also a reaction to the market facing greater uncertainty. After the inauguration, in the absence of more positive news in the short term, the market is likely to present a sideways consolidation trend with lower trading volume and reduced volatility.
Although macroeconomic factors are putting pressure on the cryptocurrency market, it can be affirmed that Trump's formal inauguration has brought new opportunities for the development of the cryptocurrency industry, especially in terms of the regulatory environment, driving technological innovation and large-scale institutional adoption, which is highly anticipated. Over the next four years, we will witness a profound transformation of the cryptocurrency ecosystem in the United States and globally. For all industry players focused on this field, this is an exciting and challenging era.
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