With the US presidential election results finalized, what changes will the crypto industry see after Donald Trump's victory?
In this year's campaign, Trump has displayed a brand-new pro-crypto stance, making crypto policy an important issue for the first time and proposing a series of commitments. His promises include firing SEC Chair Gary Gensler on "day one", commuting the sentence of Silk Road founder Ross Ulbricht, establishing a Presidential Crypto Advisory Council, repealing SAB 121, ending "Operation Choke Point 2.0", making the US a BTC mining "superpower", and establishing a national strategic BTC reserve.
With the presidency, Senate and House of Representatives potentially under full Republican control, the crypto community is growing increasingly optimistic that these promises can be quickly fulfilled.
1、New SEC Chair
Under the Biden administration, the Securities and Exchange Commission (SEC) has played a key role in crypto regulation. Current Chair Gary Gensler has argued that most cryptocurrencies are securities and has urged related agencies to register them accordingly. The agency has also engaged in multiple legal battles with industry heavyweights like Coinbase, BN, Kraken and Robinhood, as well as DeFi, Non-Fungible Token and stablecoin projects.
While Gensler may choose to continue serving as an SEC commissioner under the Trump administration, reports suggest he is likely to resign.
As for who will take over the chair position, the general speculation is that Trump may appoint current Republican SEC Commissioner Hester Peirce, who has been dubbed the "Crypto Mom" for her supportive stance in the crypto space. Peirce has long criticized the SEC's enforcement actions in the field and its failure to approve spot crypto ETPs before prosecutions. However, Peirce has previously stated that she is not interested in the chair role, making current Republican Commissioner Mark Uyeda a potential frontrunner, as he also holds a crypto-friendly attitude. Alternatively, Trump could nominate a new commissioner, with former CFTC Chair Chris Giancarlo being a considered candidate.
Variant Fund's Chief Legal Officer Jake Chervinsky says Peirce's chances of becoming chair are low, as she seems unwilling to take the position. He believes "Uyeda has a decent shot, but I expect Trump may lean towards appointing his own pick." He adds: "In reality, the chair role is an extremely difficult and thankless job. Some commissioners (like Uyeda) may be interested, but others may feel they've done their duty and want to pursue new opportunities."
However, with two and a half months until Trump's formal inauguration, crypto policy may still see changes before the new leadership takes over federal agencies. Chervinsky warns that during this period, the current administration may be "busy finalizing various rules and initiating enforcement actions."
He states: "Trump's top crypto policy priority must be to end Biden's attempts to suppress the industry through enforcement. This means rescinding unreasonable SEC enforcement actions and the DOJ's prosecution of Tornado Cash."
2、Pro-Crypto Regulation
Under Trump's leadership, advancing the "Bitcoin Bill" is one of the most anticipated policies, which aims to establish BTC as a strategic reserve asset, with plans for the US government to hold up to 5% of the total BTC supply (21 million). The official name of this bill is the "Promoting Innovation, Technology, and Competitiveness Act of 2024", or the "2024 Bitcoin Bill", introduced in July by Republican Senator Cynthia Lummis of Wyoming.
After the election results were announced, with Donald Trump winning the presidency and the Republicans regaining control of the Senate and likely maintaining control of the House, Lummis posted on X platform stating: "We will establish a strategic BTC reserve."
Presto analysts Peter Chung and Min Jung explain: "If the Republicans achieve full control of the presidency, Senate and House, the chances of many crypto-related bills, including Lummis' BTC strategic reserve bill, passing through Congress will significantly increase."
At the 2024 Bitcoin Conference held in Nashville this summer, Ikigai's Chief Investment Officer Travis Kling stated that he believed this plan was almost impossible to achieve. "This sounds like an insurmountable chasm, almost unbelievably optimistic. But with the Republicans' strong victory, the possibility of this plan has greatly increased. If it does happen, then we've really hit the jackpot (WAGMI)."
CoinShares Research Head James Butterfill wrote on Wednesday that this move would give BTC a status similar to gold, making it a component of national reserves, and mark a historic step towards legitimization. He stated: "If the Bitcoin Bill is implemented, it could greatly stimulate institutional and governmental interest in BTC, accelerating its growth and driving its value to new highs."
According to analysts at research and brokerage firm Bernstein, Trump's victory has turned the crypto regulatory environment from headwind to tailwind, and the Senate Banking Committee is expected to be more pro-crypto. This means other crypto legislation will progress faster, especially in areas like stablecoins and market structure bills, which will benefit US trading platforms and stablecoin issuers like Circle and Paxos.
According to Matt Hougan, Chief Investment Officer of Bitwise, among Trump's other policy promises, the end of "Operation Choke Point 2.0" will relax the restrictions on crypto assets' access to the traditional banking system. Additionally, the repeal of the controversial SEC bulletin SAB 121 may pave the way for traditional banks to onboard more crypto companies as clients and allow them to hold and custody Bitcoin themselves.
However, one unchanging factor after the election is the $36 trillion deficit in the US, which increases by $1 trillion every 100 days. Hougan points out that according to the Congressional Budget Office's projections, this trend may continue, or even worsen, under Trump's policies. With the Federal Reserve likely to cut interest rates and the uncertain economic environment, Bitcoin will become a "must-have" asset for investors.
3. Bitcoin mining incentives and the release of Ross Ulbricht (founder of the Dark Web marketplace "Silk Road")
Incentive measures for US Bitcoin miners may further expand the current dominance and consolidation trend of publicly listed operators in the country. This could impact the industry's diversification efforts towards AI data center hosting amid the challenging post-halving environment.
Lastly, one of the most popular promises of Trump within the crypto community and beyond may be the release of Ross Ulbricht after taking office. Ulbricht was sentenced to life in prison without parole for founding and operating the Dark Web marketplace "Silk Road", which was closely tied to Bitcoin's early history.
Early Bitcoin player Amir Taaki quickly reminded the President-elect Trump on Wednesday to fulfill his promise and commute Ulbricht's sentence, urging for his immediate release. Taaki stated: "I owe everything to Ross Ulbricht. Crypto changed my life. Crypto wouldn't be where it is without his contributions. He made the ultimate sacrifice, and we all benefit from his work."
4. Market Impact
CoinShares' Butterfill points out that Trump's proposal to appoint billionaire supporter Elon Musk to lead a new "Government Efficiency Office" to cut around $2 trillion in federal spending suggests a more accommodative monetary policy may be adopted to balance this plan. He states that historically, loose monetary policy and fiscal conservatism have been favorable for Bitcoin, enhancing its appeal as a hedge against currency devaluation and inflation, attracting investors seeking to avoid traditional economic risks.
BRN analyst Valentin Fournier says: "Trump's election provides a strong bullish case for the market, with the upcoming rate cuts and global stimulus measures expected to further boost the economy and support Bitcoin's performance. Although Trump won't officially take office until January, we expect Bitcoin to remain strong by the end of the year." He also mentioned: "Ethereum has risen 20% in the past three days, slightly narrowing the gap with Bitcoin after its previous underperformance. However, we believe this rally is temporary, and Bitcoin is likely to continue outperforming in the coming weeks."
According to The Block's price page, Bitcoin is currently trading at $74,967, up 1.7% in the past 24 hours and 77.4% year-to-date. In comparison, Ethereum is currently trading at $2,818, up 7.6% in the past 24 hours, but its year-to-date gain of 23.7% lags behind other crypto assets.
Bitget Research's Chief Analyst Ryan Lee states: "With Trump's re-election, the initial market reaction may be that off-chain capital is entering the market due to fear, driving Bitcoin to new highs. In the coming days, we may see net inflows into BTC ETFs, indicating Wall Street institutions' optimistic outlook on the market. The futures market's long-short ratio is below 1, meaning institutional investors in the crypto market are taking long positions through futures. The market is currently in a consensus bullish phase."
Analysts at Bernstein reiterated their forecast on Wednesday, predicting Bitcoin to approach $90,000 by the end of this year and reach a bull market target of $200,000 by 2025. Bitwise's Hougan also has similar target projections.
