Author: Jack Inabinet, Bankless; Compiler: Deng Tong, Golden Finance
As crypto prices rise, BTC has performed very well this cycle!
Since the FTX bankruptcy in November 2022, Bitcoin's dominance (or its share of the total market value of the crypto industry) has steadily increased from 40% two years ago to 60%, but when investors initially pieced together the impact of Donald Trump's November 6 election, altcoins came to their minds.
Here's why you can expect Bitcoin to dominate under the Trump administration.
Bullish Fundamentals
Despite limited clarity from Donald Trump on the crypto-friendly policies he intends to adopt during his next presidency, we know that the bullish fundamentals are as follows.
First, at the Bitcoin 2024 conference, Trump made a bombastic promise on day one to fire SEC Chairman Gary Gensler, pledged to make the US the crypto capital of the world, and expressed his intention to accumulate a national BTC reserve.
Crypto may have been marginalized during the previous Trump administration, but Donald has since embraced the technology, launching his own line of NFT trading cards in December
More recently, Trump positioned himself as the founder of “World Liberty Financial” in September, a forthcoming (and yet to be deployed) DeFi project that is purportedly an Aave deposit front-end that is actively seeking investments from accredited U.S. financial institutions and non-sanctioned international investors in exchange for non-transferable WLFI tokens.
Putting aside concerns about the policy details of how the Trump administration could/would benefit crypto, given his family’s large stake in WLFI, the next president of the United States has an undeniable financial incentive to enact or remove regulations that benefit the industry.
While crypto tokens and blockchain applications have long been hampered by onerous financial regulation, many industry participants are optimistic about change over the next four years, with the Trump administration expected to create various mandatory exemptions specifically for crypto projects.
In addition, given that Republicans have secured majorities in Congress, a unified government could codify such non-enforcement policies into legislation, extending their benefits well beyond Trump’s term.
Assuming Trump keeps his campaign promises, a major thaw in the adversarial relationship between U.S. regulators and the crypto industry is on the horizon.
Such relief could enable many different types of crypto tokens to receive ETF listings on national stock exchanges, and the increased availability of digital assets could compel people to buy a wider variety of crypto tokens, not just Bitcoin.
Even more tantalizing, existing regulations prohibiting registered financial institutions (such as banks) from interacting with permissionless blockchain technology could be rolled back. While many crypto tokens appear overvalued from a fundamental cash flow perspective, the value of the industry rests on its growth prospects, and with proactive regulation, mass adoption could eventually materialize.
As we get closer to Trump’s inauguration, the expectation that some vague future policy change will spark demand for tokens or cryptocurrency usage rationalizes each token as a world-class purchase at any price.
If all countries, institutions, and individuals were to file suit against the U.S. and adopt Bitcoin reserves under a Trump administration, it’s reasonable to assume that Bitcoin’s market cap would soar to incredible highs.
But why stop there?
Wouldn’t investors start to follow suit with ETH, the second-largest cryptocurrency and deflationary alternative to BTC, powering the broadest on-chain economy in existence?
Wouldn’t the expected surge in retail investors migrate to L2 assets like Base, or even those long-tail assets that offer the prospect of higher returns driven by perpetual bonds? Did I mention Base also has a token in this scene?
What industry speculator wouldn’t throw a little cash in Elon Musk’s all-time favorite meme coin, DOGE, when it’s just one step away from the global casino tables?
Thanks to the Trump administration’s blind eye, cryptocurrencies appear to be on the verge of a blissful period reminiscent of the heyday of ICO mania in 2017, when BTC’s dominance fell as unbridled optimism indiscriminately drove up everything to irrational prices.
Explore the recent developments in the Indian cryptocurrency market, including the removal of major crypto exchange apps from Apple's App Store and the evolving regulatory landscape.
MiyukiUnraveling the impact of Elon Musk's X on the SEC Twitter hack: A critical look at how a lack of two-factor authentication led to a surge in Bitcoin values.
WeatherlyExplore the unexpected implications of the SEC X account hack on the approval process of Bitcoin Spot ETFs. This article delves into the interplay between cybersecurity and financial regulation, analyzing how this incident might reshape the future of cryptocurrency investment.
WeiliangDive into the captivating journey of the Spot Bitcoin ETF's approval. Explore a decade of challenges, regulatory milestones, and pivotal moments that led to this historic achievement in the crypto world.
AnaisExplore Circle Internet's landmark IPO and its impact on the crypto and financial worlds. Discover how this event symbolizes the fusion of digital currencies with traditional finance, paving the way for a new era in financial technology.
WeiliangExplore the latest developments in the complex legal and financial saga of Gemini Earn, Genesis, and DCG as of 2024, including restructuring plans, court rulings, and user reactions.
MiyukiExplore the intricate journey of Sam Altman and Elon Musk's relationship from early collaborations to a complex feud. Delve into the implications of their disagreement on leadership, innovation, and tech industry dynamics. Gain insights into the evolution of tech leadership and the broader impact of high-profile industry disputes.
BrianDiscover the inside story of JPMorgan Chase's account freezes. Uncover customer experiences, bank policies, legal implications, and resolution strategies in our comprehensive analysis.
WeiliangUS bitcoin ETFs, led by Grayscale, BlackRock, and Fidelity, garnered $4.6 billion in trading on their debut day post-SEC approval, triggering competitive fee reductions and varied predictions for future inflows. Divergent industry opinions highlight uncertainty about the long-term impact of these ETFs on the cryptocurrency market.
JoyThe timing of Circle's IPO hinges on the completion of the review process by the Securities and Exchange Commission, coupled with prevailing market conditions.
Alex