- 12
- Nov.
- 2024
Cryptocurrency investors are buoyed by Donald Trump’s re-election and Republican control of the US Senate, given his support for digital assets. Many expect that the sector would benefit from a more favorable regulatory environment under a second Trump term. During the Bitcoin 202 conference, Trump pledged that, if he were to return to the White House, the United States would become the world’s cryptocurrency capital and a dominant force in Bitcoin. He criticized the Biden-Harris administration’s crackdown on cryptocurrency, calling it a mistake and a major disadvantage for the US.
Trump’s Victory Spurred the Markets
As the US election results were announced, Trump supporters celebrated their candidate’s return to the presidency, including cryptocurrency advocates who anticipated that his win would boost gains for digital currencies, especially Bitcoin. President-elect Donald Trump, who had once voiced skepticism toward cryptocurrencies, even labeling them as scams, later drew tens of millions of dollars in campaign support from industry backers. Rebranding himself as the “crypto president,” Trump vowed to make the United States the world’s cryptocurrency capital and a dominant force in Bitcoin globally.
Trump took it a step further by advocating for the creation of a government-owned Bitcoin reserve, modeled after the Strategic Petroleum Reserve. The Republican president also pledged to remove Gary Gensler, Chairman of the US Securities and Exchange Commission (SEC), who had been criticized for his anti-cryptocurrency stance, after he described digital currencies as "riddled with fraud, scams, and violations."
Meanwhile, the Democratic approach under President Joe Biden has been significantly different in its handling of the cryptocurrency world. During Biden’s term, the SEC sued several cryptocurrency companies and implemented regulations that some have criticized as excessive. Furthermore, the committee took additional steps by collaborating with other regulatory agencies, including the Department of Justice, to target some of the major figures in the cryptocurrency world. This included charging Sam Bankman-Fried, the CEO of FTX, with fraud and theft involving billions of dollars.
Bitcoin Nearing $90,000
Trump’s upcoming second term over the next four years, along with the Republicans’ victory in the Senate, set the stage for Bitcoin’s value to surge, pushing its market capitalization to over $1.7 trillion. Following Trump’s win, most cryptocurrencies followed an upward trajectory. In recent hours, Bitcoin continued its upward trend, breaking record levels to surpass $89,000 for the first time ever, reaching $89,165, and approaching the $90,000 threshold.
Bitcoin, the world’s largest cryptocurrency by market value, has surged by around 32% since the US election on November 5. The cryptocurrency has been on a path of price discovery, surpassing its all-time high. Meanwhile, both Ethereum, the second-largest cryptocurrency, and Ripple experienced declines, with Ethereum dropping to $3,334 and Ripple falling to 60.14 cents.
As for Dogecoin, backed by entrepreneur and Tesla CEO Elon Musk, a Trump supporter in the elections, it saw a 50% increase in value over the past five days, continuing its upward trajectory. Although Cardano, represented by the ADA symbol, saw a decline earlier in the week, it remains up by 60%, making it the top-performing low-market-cap cryptocurrency of the past week. This growth followed comments by the founder of the Cardano blockchain in a podcast in which he announced plans to collaborate with US lawmakers in Washington. According to a report by CoinTelegraph, Trump’s positive economic track record could boost confidence in Bitcoin as an alternative investment, particularly among investors seeking new opportunities in volatile markets.
Factors Affecting Cryptocurrency Performance
• Regulatory policies related to digital assets, with the market closely tracking any signs of shifts in regulations or restrictions on the cryptocurrency market.
• Economic policies, such as financial stimulus programs and interest rate cuts, which contribute to driving demand for digital assets.
• Monitoring inflation levels, as some investors consider cryptocurrencies a safe haven against inflation.
• The growing trend of central banks issuing official digital currencies.
• Geopolitical developments, such as tensions between the United States and China, which tend to increase demand for cryptocurrencies as a safe alternative amid the trade war.
Price Increase Projections
Standard Chartered Bank foresees a significant rise in the prices of Bitcoin and Ethereum in the coming years, with the overall market capitalization of cryptocurrencies set to increase by approximately four times, reaching $10 trillion by the 2026 US midterm elections. These projections are based on expected regulatory shifts following the Republican victory in the recent elections, particularly the expectation that the SEC will adopt a more flexible regulatory stance on digital assets. Furthermore, the regulatory clarity and adoption of policies expected under the Trump administration could drive growth across the entire asset class, creating a favorable environment for its expansion.
Standard Chartered predicts that Bitcoin will reach $200,000 by the end of 2025, while Ethereum is expected to hit $10,000. Ryan Li, Senior Analyst at Bitget Research, expects Bitcoin to continue breaking new records, potentially reaching $100,000 within the next three months. Meanwhile, Bernstein, a global investment firm, also forecasts Bitcoin's price to climb to $200,000 by 2025, driven by increased demand for cryptocurrencies amid inflation concerns.
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