The Cryptocurrency Industry Expects Better Days Ahead as Donald Trump Returns to the White House

The cryptocurrency industry expects better days ahead. Specifically, Donald Trump's return to the White House is seen as a positive development for crypto

Key Points

The cryptocurrency industry is largely optimistic about the upcoming years.

In particular, Donald Trump's return to the White House is seen as a positive development for crypto regulation and the potential development of a strategic bitcoin stockpile. Those prospects lifted bitcoin (BTCUSD) today, with the leading cryptocurrency touching an all-time high above $75,000 late Tuesday and, more recently, holding just below that level.

Regulatory Clarity for Crypto?

One of the biggest concerns for the crypto industry in recent years has been the Securities and Exchange Commission's approach to enforcement. The SEC has been criticized by crypto backers for perceived jurisdictional overstepping, bringing cases against crypto exchanges Binance, Coinbase, Kraken, and others.

During his speech at the Bitcoin 2024 conference in July, Trump promised to end the current administration's "anti-crypto crusade" and to replace SEC chair Gary Gensler on "day one." At the same event, he proposed creation of a bitcoin stockpile.

This election has also brought more crypto-friendly lawmakers into the Congress, making industry backers more optimistic. The results could mean rapid progress on bills related to stablecoins and clarification on when a crypto asset is a security, analysts at Bernstein said, according to a CoinDesk report.

They could also presage new crypto exchange-traded funds, such as the one recently proposed by crypto asset manager Bitwise for XRP.

What's Next For Bitcoin?

Trump previously vowed to push for the development of a strategic bitcoin stockpile if re-elected. While such a stockpile may not necessarily involve the purchasing of additional bitcoin on top of what the country already owns, it could have second-order effects in how the cryptocurrency is viewed by other world governments.

Moreover, Trump spoke of further developing the bitcoin mining industry in the U.S., claiming that he'd like to see every bitcoin mined in America. Bitcoin mining stocks such as Marathon Digital (MARA), Riot Platforms (RIOT), Hut8 (HUT) and CleanSpark (CLSK) rose Wednesday.

Bitwise CIO Matt Hougan expects bitcoin's price to rise above $100,000 before the end of the year. Still, he said, crypto investors should be discerning.

"Not all crypto projects are good, and not all of them will succeed," Hougan wrote in a note Wednesday. "All a regulatory reset will do is place crypto on a fair and even playing field, where it can succeed or fail on its own merits. It will be incumbent on investors to separate the wheat from the chaff, and to take a disciplined approach to evaluating risk."