What Trump’s presidency might mean for bitcoin and crypto in the US and globally
Although Trump dismissed bitcoin technology during his first term and his administration proposed a controversial regulation to surveil crypto users, this time he has endorsed bitcoin, pledging to support this technology and foster growth in the US crypto industry.
As the US bitcoin (BTC) and crypto industry anticipate benefits from Donald Trump’s presidency – even if some in the industry voted against him – a second term for the Republican in the White House could also impact the global BTC and crypto markets.
The global crypto asset industry has gained at least its third bitcoin and crypto-friendly president (elect), and this time, it’s the leader of the world’s largest economy and military power, which is also a key player in the expanding crypto sector.
Although Trump dismissed bitcoin technology during his first term and his administration proposed a controversial regulation to surveil crypto users, this time he has endorsed bitcoin, pledging to support this technology and foster growth in the US crypto industry.
Even two weeks after the election, he is also still listed as the “Chief Crypto Advocate” for the newly launched and so far not very successful World Liberty Financial, a crypto project in which his sons are also involved.
However, it remains uncertain how many of these pre-election promises will be fulfilled.
A 2020 BBC report showed that Trump delivered on promises like tax cuts (which he’s promising again), the Paris climate deal withdrawal, judicial reshaping, regulatory cuts, and more, but fell short on others, such as constructing a border wall funded by Mexico, reducing national debt, deporting all illegal immigrants, rebuilding infrastructure, and leaving NATO.
During the recent election campaign, Trump said what “every bitcoiner knows by heart: Never sell your bitcoin,” but blockchain analysts claim they located a BTC wallet allegedly linked to Trump from which bitcoin was sold.
Pre-election promises
One of the most ambitious ideas proposed during the campaign was the creation of a bitcoin strategic reserve, with a plan to purchase 1 million BTC within five years. Though Trump didn’t directly endorse this idea – proposed by another Republican at a bitcoin event he attended last summer – he promised the US government would keep any confiscated bitcoin and refrain from selling it if it acquires more.
He also suggested that crypto assets could help address the national debt, though he did not specify how. Meanwhile, the draft bill advocating for BTC as a reserve asset has already been introduced.
Senator Cynthia Lummis is behind this effort.
WE ARE GOING TO BUILD A STRATEGIC BITCOIN RESERVE 🇺🇸 🇺🇸 🇺🇸
undefined Senator Cynthia Lummis (@SenLummis) November 6, 2024
However, opinions vary on whether this might be achieved under Trump.
Additionally, Trump, advised by some bitcoin advocates, pledged to defend the right to mine bitcoin and stated he wants “all remaining bitcoin to be mined in the USA.”
He also voiced support for self-custody of digital assets, the freedom to transact “free from government surveillance and control,” and opposition to central bank digital currencies (CBDCs) – a new type of money that could theoretically help government monitoring and control over citizens.
Further promises include firing the current head of the US Securities and Exchange Commission (SEC), Gary Gensler, due to his adversarial stance toward the crypto industry. Many in the industry hope this will also end "Operation Choke Point 2.0," through which regulators have reportedly restricted crypto companies' access to the traditional banking system.
With the Republican Party’s pro-crypto majority in the Senate and in the House of Representatives, Trump now stands a better chance of fulfilling his promises. The domestic crypto market may also see more favorable legislation and clearer regulations. Additionally, Trump’s vice president, JD Vance, a known Bitcoin advocate, will likely oversee crypto matters.
Global spotlight
Global leaders are likely observing these developments closely, as this election underscored the potential value of supporting the crypto industry. For instance, Senator Sherrod Brown, chair of the Senate Banking Committee and an anti-crypto regulator, lost his seat after significant industry donations were made to Republican Bernie Moreno.
However, another crypto industry-backed candidate was defeated by long-standing crypto critic Senator Elizabeth Warren.
American voters just sent a loud message to all politicians: standing against Bitcoin is political suicide.
undefined Sam Callahan (@samcallah) November 6, 2024
Regardless, according to the Stand With Crypto initiative, the new Senate and House of Representatives are expected to be pro-crypto majority bodies.
President Trump will take office on January 20.
undefined Jake Chervinsky (@jchervinsky) November 6, 2024
Crypto policy will immediately and significantly shift when new leaders take over the federal agencies.
Between now and then, the outgoing administration may be busy finalizing rules and filing enforcement actions.
Stay frosty 🥶
In response to US developments, politicians in other countries may begin incorporating pro-crypto ideas into their campaigns, and governments may feel pressured to act should bitcoin and the broader digital asset industry expand under Trump’s administration.
Reports in Chinese media suggest that Hong Kong – where bitcoin exchange-traded funds (ETFs) are already available – and even mainland China may adopt a softer stance toward the industry. Some commentators speculate that international organizations, such as the World Bank and the International Monetary Fund, where the US wields significant influence, could become more crypto-friendly as well.
Let’s be absolutely clear, the anti-Bitcoin movement died last night. The USA will be the most pro-Bitcoin nation in the world. We will have a Bitcoin Strategic Reserve. We will enshrine a national law to defend Bitcoin Rights. 🇺🇸
undefined Dennis Porter (@Dennis_Porter_) November 6, 2024
Should the US begin adding BTC to its reserves, other major economies, including China, might follow suit. China remains a major player in the bitcoin mining industry, and many Chinese investors are still active in the market, despite the government’s antagonistic stance on crypto assets. Meanwhile, this week, a presidential candidate in the Polish election, Sławomir Mentzen, has already embraced the idea of a BTC reserve and promised to make the country “a cryptocurrency haven.”
Poland should create a Strategic Bitcoin Reserve.
undefined Sławomir Mentzen (@SlawomirMentzen) November 17, 2024
If I become the President of Poland, our country will become a cryptocurrency haven, with very friendly regulations, low taxes, and a supportive approach from banks and regulators.
BTC to the Moon! pic.twitter.com/izKc4spkkV
Some bitcoin analysts suggest that bitcoin technology could serve as a geopolitical “weapon,” though this notion has been largely dismissed by other bitcoin experts.
In the global race for investments, financial and human capital typically flow to friendly jurisdictions. The US, already a leader in the tech industry, could attract even more investment with a pro-crypto environment.
Earlier this year, major crypto asset companies like stablecoin giant Circle returned to the US from Europe, hopeful of a more favorable regulatory climate and potential for an initial public offering.
Though the EU has received praise for its Markets in Crypto Assets (MiCA) regulation, which provides industry clarity, Trump’s administration may offer entrepreneurs a friendlier environment within a larger market. This comes as some EU politicians increasingly target cryptoasset privacy.
can you hear that? that’s the sound of thousands of crypto & blockchain founders booking tickets to the united states, looking up office space
undefined Alex Thorn (@intangiblecoins) November 6, 2024
“It is one thing for a TradFi firm to invest in a disruptive new technology; it’s quite another to allocate to one that is under constant regulatory threat,” noted Matt Hougan, Chief Investment Officer at Bitwise, a BTC exchange-traded fund operator, adding that “the lifting of this veil will accelerate every aspect of crypto’s growth.”
After the US election, Freddie New, Head of Policy at Bitcoin Policy UK (a branch of the Bitcoin Policy Institute), stated that the United Kingdom and its ruling Labour Party “now have no choice but to change course on bitcoin.”
Perhaps the most immediate effect of Trump’s presidency could be on BTC’s price, as a friendlier regulatory environment may encourage larger investments in this relatively new asset class, attracting even more attention and capital. In two weeks after the election, BTC jumped by around 33%, surpassing $93,000.
However, analysts agree that BTC’s value would likely rise regardless of who holds office in the US. The key difference lies in the rate of appreciation, given increasing investments from traditional finance institutions, including university endowments and pension funds.
Moreover, BTC’s appeal as a hedge against currency debasement is heightened by rising global debt and continued warnings from economists, which prompt central banks to print more money, eroding the value of savings. The Committee for a Responsible Federal Budget estimates that Trump’s policies could increase national debt by around $7 trillion, or almost 20% from current levels.
Meanwhile, some bitcoin advocates worry that governments and large corporations might co-opt bitcoin, deviating from its original cypherpunk vision of a global, neutral, censorship-resistant monetary network.
Ultimately, with so many factors at play on the global stage, it’s impossible to predict bitcoin’s future with certainty. These plans, hopes, and scenarios could look very different by the end of Trump’s second term.
"What if, in the end, Trump’s incoming administration turns out to be less pro-bitcoin than projected? After all, this is politics, where everything is fair game and often serves the ultimate purpose of gaining and maintaining power," analysts at Swissblock Insights concluded this week.