Author: Weilin, PANews
On the afternoon of November 6, the Republican presidential candidate Donald Trump was successfully elected as the 47th President of the United States. The election results show that Trump won the key swing state of Pennsylvania, thereby first obtaining 270 electoral votes and defeating the Democratic candidate Harris.
With the news of Trump's election, the crypto market reacted strongly, and the price of BTC broke through the historical high around $75,000 around 11:20 on November 6. At this time, all eyes were focused on the crypto market, and crypto users and investors couldn't help but ask: How will Trump's election affect the future trend of the crypto market?
Winning the key swing state of Pennsylvania, BTC rises to a new high
The prices of BTC and other cryptocurrencies reacted quickly during the vote counting period, especially after Trump's advantage was basically determined and he won Pennsylvania. This change not only reflects the market's positive response to Trump's crypto policy, but also shows the market's optimistic expectations for the prospects of crypto assets.
After the election results were announced, Trump gave a victory speech, saying "This is the greatest political movement in the history of our country. We will help our country get well again," "This will indeed be the golden age of America." He thanked the voters, the winning states, his family, and his campaign team supporters. Trump also mentioned Musk and his Starlink project, saying "We must protect our geniuses," and thanked them for their help during the hurricane in North Carolina. In addition, Trump revealed that more than 900 campaign rallies had been held during the campaign.
Before the election, due to the general belief of investors that the regulatory environment of the crypto market will undergo major changes regardless of whether Trump or Harris is elected, the market's support for Trump is more prominent. Compared to Harris' ambiguous stance, Trump is more clear and radical in his crypto policy, not only proposing a "strategic reserve" plan for BTC, but also stating that he will promote a more open policy for the crypto market. According to multiple analyses, Trump's election may further drive the price of BTC to rise.
Can Trump's crypto policy and promises be fulfilled?
Trump's stance on crypto policy was clearly stated as early as July this year. At the BTC conference held in Nashville, USA, he publicly promised to stop the creation of the digital dollar (CBDC). He also promised to establish a US BTC strategic reserve. In addition, Trump proposed to set up a dedicated crypto policy working group, called the "BTC and Crypto Currency Presidential Advisory Council".
Trump's crypto policy is not limited to the concept of a BTC strategic reserve, he also emphasized the protection of Americans' free control over crypto assets. The Republican platform specifically mentions: "We will defend the right to mine BTC, and ensure that every American has the right to self-custody their own digital assets and trade freely without government surveillance and control."
Compared to Trump's positive attitude, the crypto policy of the Democratic candidate Harris appears to be more vague and conservative. Although she mentioned digital asset-related policies, she did not clearly explain how to deal with BTC and other crypto assets, nor did she propose a specific plan like Trump. This makes the market generally believe that Trump's victory may bring a more relaxed and favorable crypto regulatory policy.
With Trump's election, what changes will the future crypto market regulatory environment face? At least two key legislations will receive attention during Trump's term: the "Financial Innovation and Technology Act of the 21st Century" (FIT21) and the "Stablecoin Bill". FIT21 is one of the core legislations on crypto in the US, and is expected to be further promoted after the election. The FIT21 bill has already been approved by the House of Representatives and has received broad support from both Republican and Democratic lawmakers. The passage of this bill will make the crypto regulation in the US clearer and more standardized.
At present, the crypto regulatory environment in the US is relatively decentralized, with different regulatory agencies having different policy positions, including the Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC), the Financial Crimes Enforcement Network (FinCEN), and the Internal Revenue Service (IRS).
The goal of the FIT21 bill is to clearly define the regulatory framework for crypto, eliminating the existing regulatory chaos and uncertainty. Many lawmakers believe that the SEC's regulation in the crypto field is too strict and has hindered the development of the crypto industry.
The "Stablecoin Bill" proposed by Republican Senator Cynthia Lummis and Democratic Senator Kirsten Gillibrand aims to provide a clear regulatory framework for stablecoins. This bill requires large stablecoin issuers to register with the Office of the Comptroller of the Currency (OCC) in the US, and stipulates that they must have a 1:1 asset reserve. In addition, the bill also grants the Federal Reserve the power to regulate stablecoins, and prohibits the issuance of algorithmic stablecoins. For Trump, how to view this bill and its implementation will also be an important part of future policies.
Market Forecast: BTC may rise to $80,000 to $90,000 within the next two months
Even before the election results were announced, the Bernstein analysts led by Gautam Chhugani said on November 4 that the election would have a "short-term impact" on crypto sentiment and affect the price of BTC. BTC is currently around $68,000, lower than the over $73,000 high set last week. Chhugani predicted that if the crypto-friendly candidate Trump wins the election, BTC could rise to $80,000 to $90,000 within the next two months, breaking the previous record high of nearly $73,800 set in March.
The Bernstein analysis team maintained their price target of $200,000 for BTC by the end of 2025, regardless of the election results. They explained that for the $1.4 trillion digital asset, "the genie is out of the bottle," and the latest push of the spot BTC ETF further enhances the value of this decentralized currency.
Geoff Kendrick, an analyst at Standard Chartered Bank, wrote in October that he expects BTC to reach $125,000 if Trump wins the election.
PlanB, the creator of the BTC Stock-to-Flow (S2F) model, predicted that after Trump wins the election, BTC will reach $100,000 in November. In December, with the influx of ETF funds, BTC will soar to $150,000. In January 2025, as the crypto industry returns to the US, BTC will rise to $200,000. In February 2025, BTC will fall back to $150,000 as investors take profits. PlanB believes that the profit-taking by investors will lead to a temporary pullback of BTC to $150,000 after reaching the high. From March to May 2025, BTC will show a global trend, with the price breaking through $500,000. 2026-2027 will be a market adjustment and bear market.
The prediction of the anonymous veteran investor The Giver is relatively conservative, believing that the election-driven BTC rise is more of a temporary phenomenon rather than a long-term trend. The Giver believes that the BTC price will soar in the short term, but due to the limited market capacity in the fourth quarter of 2024, it is unlikely to continue into the next year.
Alex Krüger, an economist, trader and consultant from Argentina, believes that with Trump's victory, the BTC target price by the end of the year will be $90,000.
Previous data shows that the election is one of the factors affecting the BTC price, and the trend of BTC is consistent with Trump's winning probability in the prediction market.
At the same time, according to the analysis of BloFin Academy, although for some meme stocks and meme coins, the "selling the truth" phenomenon may occur after the election, the best trading strategy for assets such as and seems to be "selling volatility". Usually, "selling the truth" is a common phenomenon after major events, and the reasons behind it are varied: as uncertainty disappears, investors and institutional traders often choose to take profits or cut losses, and the long-short strategies based on statistical arbitrage also lead to price corrections of outperforming assets.
With the development of the derivatives market, the position adjustment and hedging of market makers have become an important factor in "selling the truth", especially for assets with high volatility or low liquidity. For some meme stocks (such as DJT) and meme coins, the price returning to normal after the event is almost a "foregone conclusion". This return is usually driven by two main factors: the significant deviation of the return distribution from the normal level provides opportunities for statistical arbitrage, and the rapid decline in implied volatility after the event also accelerates this process.
For and , although the decline in volatility will lead to selling pressure, the extent of their price decline will be relatively limited compared to meme assets. More importantly, the returns of and have not deviated significantly from the normal distribution, so after a short-term adjustment, their upside potential is still greater than that of meme assets.
Unlike , has stronger price momentum, which is due to its higher negative Gamma. Negative Gamma means that the hedging behavior of market makers will exacerbate market volatility, driving prices to accelerate in both upward and downward movements. In contrast, 's higher positive Gamma means that during the price increase, the hedging behavior of market makers will actually add more resistance to the price increase, making the upward trend more gradual.
BloFin Academy believes that the situation of is similar to . Due to the Gamma peak in the strike price range of around $2500-$2600, as the price continues to rise, the selling behavior of market makers will create resistance to its upward trend. Considering that the Gamma peak comes from weekly options, the hedging behavior of market makers will continue to limit the upside space of price in the coming days.
BloFin Academy concludes that for most traders, the current best strategy is to sell volatility.
In general, the future development of the cryptocurrency market still needs to closely monitor the specific policies and legislative progress of the Trump administration in the cryptocurrency field. For investors, maintaining a flexible and responsive strategy is the key to gaining an advantage in this highly uncertain market.
