With Trump taking office soon, where is crypto regulation heading?

Written by: Gyro Finance

Trump effect continues, Bitcoin hits new highs.

Less than a week after the election results were announced, even though he has not yet been sworn in and the House of Representatives has not yet decided the winner, President-elect Trump has already had an all-round impact on the crypto field. In recent days, the crypto market has continued to rise, and BTC has accumulated strength to break through the $81,000 mark after breaking through the previous high on the day of the election, leaving a beautiful positive line on the K-line chart.

It is enough to see that Trump's appearance has greatly improved the sentiment of the crypto market, and all of this is naturally inseparable from the verbal checks promised by politicians. However, judging from the data, looking at the presidents' terms of office, the compliance rate does not seem optimistic.

Whether crypto regulation will be as the president said is still unclear, but what can be confirmed is that the crypto industry, which has spent $240 million, has officially come to the center of the political stage from the unknown behind the scenes.

After the US election, the most proud industry, in addition to local fossil energy, is the crypto industry.

Affected by the Trump effect and the subsequent interest rate cuts, the crypto market has risen dramatically, with Bitcoin being the first to bear the brunt. In just one week, it has risen from $67,000 to above $81,000. It reached a high of $81,500 in the early morning of today, with a 7-day increase of 17.79%. Mainstream currencies have generally risen, and the long-dormant Ethereum has also reached $3,200, and the market value of SOL has once exceeded $100 billion. MEME is not far behind, and is happy to get political MEME represents DOGE, which has a gratifying rise. In the past 24 hours today alone, it has risen by more than 33% to $0.292, with a market value of $42.3 billion, even surpassing the stablecoin USDC to become the sixth largest cryptocurrency by market value.

With such drastic fluctuations, liquidation is naturally the norm. According to Coinglass data, as of 14:54, the number of liquidations in the 24-hour crypto market reached 216,612, with a total liquidation amount of 650 million, long and short liquidations, long orders liquidated $365 million, and short orders liquidated $285 million.

Overall, despite the increased volatility, the crypto market is clearly developing in a positive direction. A typical example is that Wall Street institutions are continuing to bet on Bitcoin. Starting from November 6, Bitcoin ETF has a significant net inflow, and the single-day inflow on November 7 was as high as 1.359 billion US dollars, setting a record high. As of now, BlackRock's IBIT has a total asset management of 17.243 billion US dollars, and the asset management scale has reached 17.443 billion US dollars. The total asset scale exceeds the second largest gold fund IAU in the US stock market, which once again confirms the title of Bitcoin "digital gold".

Before Trump was elected, many market analysts predicted that the market would fall after the election because of selling facts, but in terms of actual effects, the positive effects of the crypto market are still strong and sustainable. This strong sustainability comes from a more relaxed macroeconomic environment. Although Wall Street predicts that interest rate cuts will slow down next year, interest rates will still be cut as scheduled in November. On the other hand, it comes from the industry's more favorable expectations for Trump.

If we look back at Trump's previous verbal promises, there are only two categories, one is the regulatory side, and the other is the currency price side. Trump made it clear in his speech at the Bitcoin Conference that the market value of Bitcoin will increase since its birth, and it will soon surpass silver and gold in the future. He also emphasized that after being elected, the United States will reserve Bitcoin as a strategic asset and will not sell any Bitcoin. It hopes that Bitcoin will be mined, minted and manufactured in the United States, rather than anywhere else, and will ensure that the United States will become the world's encryption center and Bitcoin superpower.

From the regulatory side, Trump has given more room for imagination. Trump said that there will never be a central bank digital currency CBDC. On the first day of his presidency, he will fire the well-known anti-crypto person, the current SEC Chairman Gray Gensler, and appoint a new chairman. At the same time, he will immediately appoint a Bitcoin and Cryptocurrency Presidential Advisory Committee to "design transparent regulatory guidance for the entire industry, which will be completed within 100 days. From now on, these rules will be made by people who love your industry, not those who hate your industry. These people want to make the rules clear, simple, direct and fair. These people want to see your industry thrive rather than wither."

In addition to verbal promises, Trump also set an example in person. Not only is he the first president to accept cryptocurrency donations, his family has also started the Defi project to operate, and the title of "America's First Bitcoin President" has been firmly added. He did not forget to mention it many times in his canvassing speeches. In addition to Trump, Vice President Vance and Trump's top aide Musk are also absolute supporters of encryption. SpaceX and Tesla both hold a lot of Bitcoin.

What is even more exciting is that the Republicans won a landslide victory in this election. After winning the Senate, there is a great probability that they will win the House of Representatives. By then, whether it is legislation, personnel appointments, or financial support, Trump will have stronger party support, rather than being constrained as in 2016.

It can be seen that the crypto industry seems to be about to usher in a new regulatory environment, and industry insiders are also excited about this. Today, the policy director of a16z wrote an article mentioning that on the basis of the bipartisan cooperation in the previous Congress, a clear regulatory framework will be advocated to promote and support innovation and decentralization, bringing higher regulatory clarity. The industry should all feel capable of exploring all breakthrough products and services supported by blockchain, especially in token issuance and community building. Many plans that were previously shelved due to concerns about regulation may now finally be restarted.

From the perspective of specific regulations, a research report by blockchain infrastructure company Blockdaemon pointed out that two key bills will be promoted. One is that the 21st Century Financial Innovation and Technology Act is expected to be passed by the Senate and eventually signed into law in 2025; the other is that the SAB 121 repeal proposal previously vetoed by Biden may take effect.

Paul Grewal, chief legal officer of cryptocurrency giant Coinbase, also bluntly stated that cryptocurrency has ushered in a watershed, and its CEO bluntly stated that next year, US congressmen will be very friendly to the crypto market, "It will be the most cryptocurrency-supportive Congress in history."

This is indeed true. Although the presidential candidate is indeed the key, in the actual formulation and implementation of regulations, the US Congress under the "separation of powers" model is the most important part. Against this background, the crypto industry has expanded its strategic vision. In addition to supporting the president, it also focuses on supporting more crypto-friendly people in Congress.

According to data from the Stand With Crypto website initiated by Coinbase,As of November 11, in this election, a total of 268 candidates who support cryptocurrency have won seats in the House of Representatives, while only 122 members of the House of Representatives who oppose cryptocurrency. At the same time, the new Senate is also more inclined to support cryptocurrency, with 19 supporters and 12 opponents.

And all this is the result of real money. Fairshake, a cryptocurrency super PAC funded by companies such as Coinbase, Ripple and Andreessen Horowitz, raised $245 million, becoming the largest single-period super PAC in U.S. history, surpassing traditional corporate donors and now second only to the fossil fuel industry in political spending since the Supreme Court's ruling on corporate political donations in 2010.

The action committee not only raises a lot of money, but also has a lot of experience in selecting people, following the principle of betting on both sides, focusing on funding the Republican Party's "defending American jobs" and supporting the Democratic Party's "protecting progress." It is reported that almost all of the 48 candidates supported by the crypto PAC won, with a winning rate of 98%, setting a record. In the key election seats, cryptocurrencies spent a huge amount of money, spending $40 million to successfully help Ohio auto dealer and blockchain entrepreneur, Republican Bernie Moreno, who was behind by 6%, to turn the tide and defeat Sherrod Brown, the well-known chairman of the Senate Banking Committee and a strong critic of cryptocurrency, and the Democratic Senator of Ohio, and further helped the Republican Party to lock in the Senate victory. 40 million has also become the largest amount of money invested by a group in Ohio elections so far.

In addition to this election, Fairshake has even considered the mid-term elections two years later. So far, it has accumulated more than $78 million for the 2026 mid-term elections, doing its best to eliminate the possible mid-term decentralization effect of the people.

The expectation of weak regulation and the return of small government are driving the growth of the industry, and altcoins are also rejuvenated. Even many industry insiders are looking forward to the mainstreaming of altcoins again.

But back to reality, in addition to relatively fast personnel appointments and dismissals, as long as it involves legislation and strategic direction, the chain involved is quite extensive, and the president's personal power cannot be exaggerated. In a federal country with a high degree of checks and balances among the three powers, the actual power of the president is far less than that of a centralized country. In the United States, where ideology is highly divided, the greater the political rift, the stronger the constraints of the opposition party on the ruling party. Voters will also take advantage of this and usually will not let one party dominate. Even if they win temporarily, they will check and balance in the mid-term elections. This is why Fairshake has made a first-hand layout. In the election, in order to obtain more votes, the president will also tend to make big promises or make more radical promises, but will return to reality after taking office.

According to the data of Zhibenshe, the presidents' promise fulfillment rate during their term of office is generally low. During Biden's term of office, the overall promise fulfillment rate was only 28%. Among them, the fulfillment rate of 19 medical issues was only 42%; only 2 of the 18 economic issues were fulfilled, 10 were completely unfulfilled, and the fulfillment rate was only 11%; the judicial fulfillment rate was 20%; the national security fulfillment rate was 21%; and the administrative improvement fulfillment rate was 33%. Among the remaining six or less issues, immigration was 50%, education was 0%, climate and environment was 75%, and trade was 33%.

During Trump's first term, the overall fulfillment rate of promises was 31%. Among them, 5 trade issues were fully fulfilled, with a fulfillment rate of 100%; in addition, the fulfillment rates of other major issues were low, 10 of the 13 economic issues were completely unfulfilled, with a fulfillment rate of only 7.6%; the immigration fulfillment rate was 27%; and the administrative improvement fulfillment rate was 20%. Among the remaining six or less topics, healthcare 10%, justice 50%, education 25%, national security 66%, and climate and environment 33%.

Therefore, the US president should watch his actions rather than his words, and pay attention to Trump's speech and subsequent actions after he officially took office on January 20. On the other hand, the market does not have to be overly pessimistic. Compared with Trump, who was extremely heretical in 2016, the Republican Party's victory after this election and its own strong prestige within the party will also greatly increase the term fulfillment rate. What is more noteworthy is that it is a foregone conclusion that cryptocurrency "buys" Congress. With a large number of voters, whether it is congressmen or presidents, they will not let go of this highly politicized ecological industry.

From now on, the encryption industry may really come to the forefront of history.