Trump’s Election Win And The Cryptocurrency Markets

Bitcoin surged to a new record high Nov. 6, riding a wave of optimism from investors who view President-elect Donald Trump’s win as a boost for the crypto market.

In early trading, Bitcoin shot up 8 percent, notching a fresh all-time high at over $75,000, shattering its previous record from March. The cryptocurrency held onto most of its gains, reaching a new record high by late afternoon Wednesday, when it topped over $76,000. 

Other major cryptocurrencies joined in the rally, including Ethereum, the second-largest digital currency, which jumped 8 percent from Tuesday night through Wednesday morning before gaining another 8.5 percent from Wednesday morning through Thursday afternoon. Dogecoin — frequently touted by billionaire Elon Musk, a major Trump supporter — spiked by as much as 29 percent. However, the meme token gave up most of its gains Wednesday and Thursday. 

Trump’s stance on deregulation, tax cuts and a shift away from centralized financial institutions like the Federal Reserve has crypto enthusiasts seeing opportunities. Many believe his support for these risky assets fueled the recent crypto rally.

So what can crypto investors expect during a second Trump presidency?

Here’s where President-elect Donald Trump stands on cryptocurrency — and what it might mean for the markets moving forward. 

Trump embraced cryptocurrency ahead of election

Trump, who once voiced skepticism about cryptocurrency, spent much of 2024 positioning himself as the pro-crypto presidential candidate.

Trump’s current stance on crypto is a major departure from his last term as president. In the summer of 2019, Trump criticized cryptocurrency on social media, claiming it could be used to facilitate illegal activities. And during his presidency, the Trump administration’s regulatory actions included the SEC’s controversial lawsuit against Ripple.

But Trump changed his tune in 2024, aiming to win over a bloc of single-issue voters and — perhaps more crucially — big-ticket donors in the cryptocurrency world.

In July, at a major cryptocurrency conference in Nashville, Tennessee, Trump declared that he wants the U.S. to become the “crypto capital of the planet” and the Bitcoin “superpower of the world.”

Trump’s campaign accepted Bitcoin donations throughout the race, and in September, Trump made headlines after paying for a meal at a New York City tavern in Bitcoin.  His vice presidential running mate, Sen. J.D. Vance (R-Ohio), is also a longtime crypto advocate.

The Republican National Committee even included cryptocurrency in its official party platform released prior to the election, asserting that Trump would defend the right to mine Bitcoin and “ensure every American has the right to self-custody of their Digital Assets, and transact free from Government Surveillance and Control.”

Trump’s proposed crypto policies 

At the Bitcoin 2024 conference in Nashville, Trump detailed a set of crypto-friendly policies. He also claimed that Bitcoin’s price would soar under his administration.

Some of Trump’s crypto policy proposals include:

• Create a government stockpile of Bitcoin: During the conference, Trump noted that his administration would “keep 100 percent of all the Bitcoin the U.S. government currently holds or acquires into the future,” adding that the digital currency would act as the “core of the strategic national Bitcoin stockpile.” It’s estimated the U.S. government held more than $5 billion worth of Bitcoin as of October 2023, largely seized from criminal investigations. However, it’s unclear what the stockpile would be used for, whether it’s realistic or if it’s even welcomed by the broader crypto industry.
• Create a crypto advisory council: In Nashville, Trump proposed launching a group called the “Bitcoin and crypto presidential advisory council,” which would have rules “written by people who love your industry, not hate your industry.”
• Block the Federal Reserve from creating its own digital currency: Central bank digital currencies, known as CBDCs, are a growing trend around the rest of the world, but the idea has received significant pushback from the U.S. cryptoverse. The Fed hasn’t decided whether to make a fully digital version of the U.S. dollar, though it did release a long-awaited report in January 2022 detailing the potential costs and benefits. Trump has spoken out against the idea multiple times in 2024, including at a January campaign rally in New Hampshire, where he called it a “dangerous threat to freedom.” In May, the House passed a bill that would bar the Federal Reserve from creating a CBDC.

What a Trump presidency might actually mean for crypto

Unsurprisingly, many experts in the cryptocurrency world are optimistic about Trump’s upcoming return to the White House.

Adam Blumberg, co-founder of Interaxis, a firm that provides cryptocurrency and blockchain education for financial advisors, thinks the administration will bring clarity to the still-murky regulatory landscape of digital currency.

“I think we’ll see stablecoin legislation, which will lead to more people transacting on the blockchain,” says Blumberg, referring to the technology that underlies cryptocurrency. “We’ll also see projects where tokens aren’t considered a security, so teams won’t be worried about launching.”

Trump has also repeatedly pledged to fire Gary Gensler, current chair of the Securities and Exchange Commission (SEC), who presided over the outgoing administration’s push to regulate the crypto industry.

However, Trump’s recent alignment with cryptocurrency might prove ethically dubious.

Trump’s latest business venture, World Liberty Financial,  is a project that’s been described as a decentralized finance (DeFi) money market, or a platform where people can borrow, lend and earn interest on crypto.

An earlier white paper for the venture stated that it would feature a new cryptocurrency called $WLFI that would be sold to the public, according to The New York Times.

Trump announced the project on Sept. 16 during a livestream on X, accompanied by his son Donald Jr. and executives behind the venture, including Chase Herro and Zachary Folkman. World Liberty Financial officially launched the following month, mere weeks before the election.

Trump’s involvement in the crypto project raises concerns regarding ethics now that he’s been reelected president. Conflicts of interest, including his influence on crypto regulation and the potential for market manipulation, could directly impact cryptocurrency — and his financial stake in it.

“No one on the GOP side is willing to oppose Trump right now, so they’re going to propose and vote [for] the rules he wants,” says Blumberg.

Bottom line 

Trump’s embrace of digital currency may prove favorable for investors and industry leaders who covet looser regulations. But ethical concerns over the recent launch of his cryptocurrency project World Liberty Financial are likely to intensify after Trump takes office.