Nothing has impacted the crypto industry quite like Trump’s campaign promises. Let’s break down why the U.S. election has had such an influence on cryptocurrencies.
The U.S. elections have shifted not only the global political landscape but also the tech world, particularly the cryptocurrency market. We’ve all seen Bitcoin climbing daily, hitting new records with each passing week. Crypto investors and enthusiasts were celebrating, feeling as though the market was catching fire once again. Experts and analysts, however, have been working to understand what exactly happened and why.
There was widespread speculation that Kamala Harris winning the U.S. presidential election would lead to stagnation and declining cryptocurrency prices, while a Trump victory would trigger a dramatic price surge. Trump stated, “If I am elected, my administration’s policy will be to hold 100% of all Bitcoin currently owned or acquired by the U.S. government.” This promise, in the end, was fulfilled. But what can we expect next in the cryptocurrency market?
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Is cryptocurrency the new gold?
It’s worth noting that cryptocurrencies are no longer a niche product. If you haven’t kept up with recent developments in the cryptocurrency world, you’ve missed some key changes. A few years ago, cryptocurrency mining was a big trend. However, that trend largely ended, particularly after Ethereum shifted to a Proof of Stake model. Without diving into technical details, this change essentially made the process of Ethereum mining with GPUs unprofitable.
Bitcoin mining, on the other hand, has long relied exclusively on specialized ASIC systems, and only large-scale miners—now a small number—are involved. For the most part, Bitcoin is now bought and sold on cryptocurrency exchanges. Mining itself is almost nonexistent, as nearly all Bitcoin has already been mined, with most of it extracted about five years ago. The remaining large miners are just scraping the last bits of Bitcoin, aiming to complete its mining cycle entirely.
Many experts still wonder: do these virtual currencies hold any real value? The answer here is unequivocal: yes, absolutely. In fact, they’ve proven this quite effectively. As of this writing, a single Bitcoin (BTC) is priced at approximately $88,000, while one Ethereum (ETH) stands at around $3,300.
Among the general public, the term “cryptocurrency” still often stirs up unease. Many remain skeptical about investing in what some financiers call “modern gold.” Media coverage typically emphasizes stories of scams, Ponzi schemes, fraud, and the use of virtual currencies to fund international terrorism. We’re frequently told that the criminal world relies on cryptocurrency to finance illicit activities. This narrative, however, overlooks the fact that criminal enterprises thrived long before Bitcoin was even an idea in Satoshi Nakamoto’s mind.
What might those who don’t follow the cryptocurrency market have missed? Well, less than a year ago, BlackRock—one of the world’s largest investment firms, managing over $11 trillion in assets by the end of 2023—launched a Bitcoin-based ETF.
A few words about this fund. An ETF, or Exchange Traded Fund, is a type of fund that trades on a stock exchange. The fund manager gathers stocks of various companies based on a certain criterion (for example, companies involved in telecommunications or cannabis) and creates the fund from them. Anyone can buy shares in the ETF, effectively becoming a partial owner of all the stocks in which the fund has invested. In other words, an ETF is one of the accessible investment tools available today.
So, just a few days ago, the fund surpassed a value of $30 billion, indicating a steady influx of capital into the Bitcoin network through funds of this type and an increasing share of cryptocurrencies in investment portfolios. If these numbers don’t convince you that Bitcoin is already being considered a legitimate financial asset, I’m not sure what else could.
Some countries have already started taxing the buying and selling of Bitcoin, creating a separate category for “Virtual Currencies.” In our country, more and more officials, lawmakers, and businesspeople are reporting their assets in cryptocurrency. The interesting question, however, is whether they purchase it on exchanges or are directly involved in the mining process.
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Cryptocurrency market grows
Trump’s campaign promises sparked enthusiasm among cryptocurrency enthusiasts. Bitcoin and other virtual currencies reacted positively to the U.S. election results.
It was no secret that Kamala Harris intended to support the Democrats’ strict stance on cryptocurrencies. While Biden’s administration allowed the introduction of Bitcoin and Ethereum-based ETFs, the SEC (U.S. Securities and Exchange Commission) maintained a highly critical approach toward virtual currencies, generally disapproving of every step the crypto industry took. Exchanges and funds faced various bans and restrictions as a result.
Donald Trump, for his part, wants to implement more liberal regulations for the crypto sector. This could significantly ease the rollout of new projects. One cryptocurrency exchange, Coinbase (which has been under scrutiny by the SEC for some time), donated nearly $100 million to Trump’s presidential campaign. This move indicates that the cryptocurrency market believes in the promises of the future 47th President of the United States.
The hopes and desires of market players include not only changes in the leadership of the SEC’s oversight committee but also the introduction of more ETFs based on other cryptocurrencies, halting the creation of issues for the Tether stablecoin (which is pegged to the U.S. dollar), and even the cancellation of the central bank digital currency (CBDC) project. The market is particularly awaiting the removal of Gary Gensler, who, during his tenure as Chairman of the SEC, consistently worked to hinder the development and legalization of virtual currencies in the U.S.
Moreover, Trump’s advisors, including notable figures like Elon Musk, also want the government to purchase cryptocurrencies for its currency reserves. In practice, this would make their hypothetical “illegalization” nearly impossible.
Will any of this work? Perhaps this is the moment when cryptocurrencies will surprise us once again.
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The aftermath of Trump’s victory has fired up cryptocurrency fans
At first, there were no signs of an explosion. Yes, the price increased, but then came dramatic fluctuations in the value of virtual currencies. So, what’s the situation today? Let’s start, of course, with the king—Bitcoin (BTC).
At the end of the chart, we can clearly see the sharp spike associated with Donald Trump’s victory. The “bulls” began pacing nervously, filled with excitement and anticipation. Holders can only rub their hands in expectation, but as always with cryptocurrencies, it’s important to be a cautious optimist.
Ethereum is also rising, but what’s happening with altcoins? The popular PIESEL (DOGE) saw an impressive growth of 245% in just one month, but… it still has a long way to go to reach its historical highs.
The same applies to Cardano. While the chart might look impressive, less than half a dollar for ADA is not a remarkable result when you consider that one of these coins was once worth three dollars.
Meanwhile, NEAR gained only 10% in a month, but the recent decline likely also influenced its price.
It’s important to remember that the election results are just the beginning. The official presidential inauguration will take place at the end of January, and there’s still a long way to go before the first decisions from the U.S. President. Until then, the major cryptocurrencies could theoretically continue to rise—or perhaps not.
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Digital Eldorado and FOMO syndrome
What lies ahead for cryptocurrencies under Trump’s leadership? On one hand, we hear that we are facing a historic opportunity, akin to the California Gold Rush. Such opportunities come once in a lifetime. Will we want to tell our children that we lived through the era of digital Eldorado but were too afraid of the risks associated with entering the world of cryptocurrencies? This evokes the FOMO (Fear Of Missing Out) syndrome— the fear of stepping out of our comfort zone and missing the chance to make a profit.
On the other hand, it’s important to remember that during the California Gold Rush, it was mainly speculators who profited, selling equipment to gold prospectors at inflated prices. Many financial experts still hesitate to refer to purchasing cryptocurrency as an investment, preferring to frame it as speculation. It’s hard to argue against them, as they are (at least partially) right. However, recent moves by institutions like BlackRock indicate that BTC can no longer be entirely dismissed as a serious asset.
Volatility in cryptocurrency prices is much greater than that of stocks, and it’s far more difficult to predict. Many speculated that Bitcoin could be a good investment during tough times. However, after the escalation of the conflict in the Middle East, Bitcoin gave all investors a virtual but nonetheless symbolic middle finger. This highlights just how unpredictable and, at times, counterintuitive the crypto market can be.
Analysts believe that Trump’s increasing interest in cryptocurrencies during his presidential campaign, along with his involvement in crypto trading, has led investors to hope that his new administration will adopt a more crypto-friendly stance.
Some see Trump’s election as a particularly positive sign for Bitcoin and other cryptocurrencies. He has promised to reverse the aggressive stance of the current leadership of the Securities and Exchange Commission (SEC) against crypto firms and products, which they deem potentially harmful to investors.
When it comes to the price and the future of Bitcoin and other cryptocurrencies, it can only be said that they will remain unpredictable. The current “bullish” sentiment offers no guarantees of further growth. Bitcoin may surpass $100,000 or even $200,000, but no one knows if that will actually happen.
Despite the bold statements made by Donald Trump, long-term considerations should include the potential for further regulation of the market and attempts by governments and global financial institutions to gain control over cryptocurrencies. This could effectively end the era of “digital Eldorado,” a prospect that the crypto industry fears. However, the likelihood of such a scenario under Trump’s administration is significantly reduced. For now, we will have to wait for the first concrete actions from the Trump Administration before drawing further conclusions.
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