Hotcoin Research | The Spring of the Crypto World Has Arrived: Analysis of U.S. Crypto Policy and Market Trends Following Trump’s Election

I. Introduction

On November 6, the results of the U.S. Presidential election were finalized, with Donald Trump successfully elected as the President. This outcome has attracted widespread attention globally, especially in the cryptocurrency space. Over the past few years, the U.S. regulatory environment for cryptocurrencies has been relatively strict and uncertain, but Trump’s re-election is seen as a potential turning point in U.S. crypto policy. During his campaign, Trump repeatedly expressed his support for cryptocurrencies, promising to turn the U.S. into the “global capital of cryptocurrencies” and proposed policies like establishing a national strategic Bitcoin reserve.

Expectations for a series of favorable cryptocurrency policies after Trump’s election have fueled optimism among investors about the future of the crypto industry. The cryptocurrency market has surged significantly in a short period, with Bitcoin soaring and breaking the $90,000 mark this week, while other cryptocurrencies also saw widespread gains. This article aims to analyze the potential impact of Trump’s election on U.S. cryptocurrency policies, forecast market trends, and offer corresponding investment strategy recommendations.

II. Trump’s Cryptocurrency Policy Commitments

During the 2024 U.S. presidential election campaign, compared to Democratic candidate Kamala Harris, Trump displayed a more proactive and open attitude toward cryptocurrency and proposed a series of policies aimed at promoting the growth of the crypto sector.

1. Shift in Attitude: From Skepticism to Support

As early as 2019, Trump stated on Twitter that he was “not a fan of cryptocurrencies,” believing that they were “not money” and highlighting their volatile prices and lack of reliability. He also criticized Facebook’s Libra project, emphasizing its “lack of legitimacy and reliability,” and suggested that U.S. regulators would take action against it.

However, by 2024, Trump’s stance had clearly shifted. He began publicly expressing support for cryptocurrencies, emphasizing their potential role in the future financial system. This change may be influenced by several factors, including the rapid development of the cryptocurrency market, growing public acceptance of digital assets, and shifting political dynamics.

2. Supportive Statements and Positions During the Campaign

• May 9, 2024: Statement at the NFT Gala
  At an NFT gala held at Mar-a-Lago, Trump said, “If you support cryptocurrency, you should vote for Trump because they (the Biden administration) want to end it.” When asked about his views on central bank digital currencies (CBDCs) and “government blockchains,” Trump responded, “I think each of these has its place.” He continued, “We have some incredible things happening. I mean, look at cryptocurrency from a few years ago when people said it wouldn’t succeed, but now it’s breaking records. I guess you could call it a form of currency, and I think I support that, I increasingly support that.”
• May 28, 2024: Bitcoin and National Debt
  David Bailey, CEO of Bitcoin Magazine and a cryptocurrency advisor for Trump’s campaign, revealed that Trump had inquired whether Bitcoin could be used to address the U.S. national debt issue. This remark shows Trump’s growing interest in the potential macroeconomic role of cryptocurrencies.
• June 8, 2024: Fundraising Event Commitment
  At a fundraising event in San Francisco, Trump declared that he would become the “crypto president” and promised that within one hour of taking office in his second term, he would end the Biden administration’s and SEC Chairman Gary Gensler’s “crusade” against cryptocurrencies. He emphasized that his administration would adopt more favorable regulations to support the growth of the crypto industry.
• July 28, 2024: Bitcoin Conference Speech
  At a Bitcoin conference in Nashville, Trump declared his intent to turn the U.S. into the “crypto capital of the Earth” and a “Bitcoin superpower.” He also promised to fire SEC Chairman Gary Gensler on his first day in office, stating, “Bitcoin might be our last line of defense against CBDCs, and it will help us dominate the energy sector.”

3. Campaign Actions Related to the Crypto Industry

• Accepting Cryptocurrency Donations
  In May 2024, Trump’s campaign team announced that it would accept cryptocurrency donations, allowing supporters to donate through the Coinbase Commerce platform using various cryptocurrencies. This move reflects Trump’s openness to cryptocurrencies and his aim to attract more crypto supporters.
• Participating in Bitcoin Transactions
  In September 2024, Trump became the first U.S. president to use Bitcoin for a transaction, purchasing a hamburger and beer at a New York City bar that accepts Bitcoin payments. He described the payment process as “very simple” and praised Bitcoin for its convenience. This act was seen as a symbolic gesture of his support for cryptocurrencies.
• Launching an NFT Project
  During his campaign, Trump launched multiple NFT projects, including the “Trump Digital Trading Cards,” further showcasing his support for cryptocurrencies and blockchain technology. These NFTs received positive feedback in the market, highlighting his influence in the digital asset space.
• Engaging with the Crypto Community
  Trump actively participated in cryptocurrency community events, including attending Bitcoin conferences and meeting with crypto entrepreneurs. At these events, he emphasized the importance of cryptocurrencies and promised that under his leadership, the U.S. would become a global leader in the cryptocurrency space.

4. Key Cryptocurrency Policy Promises

• Establish a National Bitcoin Reserve
  Trump promised that if re-elected, he would establish a national Bitcoin reserve, holding all government-owned Bitcoin as part of the nation’s strategic reserves. He believes that Bitcoin has long-term appreciation potential, and the government should hold and leverage its value.
• Create a Cryptocurrency Advisory Council
  Trump has repeatedly stated that, if re-elected, he would fire the current SEC Chairman Gary Gensler and appoint regulators who are more friendly to cryptocurrencies. He also pledged to establish a Bitcoin and cryptocurrency advisory council to develop and implement policies that would benefit the growth of the cryptocurrency industry, ensuring that the U.S. remains a leader in this field.
• Oppose Central Bank Digital Currencies (CBDCs)
  Trump has made it clear that he opposes the issuance of a U.S. CBDC, believing that it would lead to excessive surveillance of citizens’ financial activities and violate personal privacy. He emphasized that the government should not control or monitor citizens’ financial transactions, advocating for individuals’ right to self-custody of their digital assets.
• Support Bitcoin Mining
  He pledged to defend the right to mine Bitcoin, viewing it not only as a way to support the cryptocurrency sector but also as a means to foster innovation and growth in the energy sector. Trump pointed out that Bitcoin mining could help stabilize energy grid supplies, bringing economic and environmental benefits.
• Develop a Comprehensive Cryptocurrency Policy
  Trump committed to developing a comprehensive cryptocurrency policy, covering everything from stablecoin regulation to Bitcoin self-custody rights, ensuring that the U.S. maintains its leadership in this space. He emphasized that the government should provide clear guidelines for the cryptocurrency industry to promote innovation while protecting consumer rights.
• Reduce the Sentence of Ross Ulbricht
  Trump also promised that, if re-elected, he would reduce the sentence of Ross Ulbricht, the founder of Silk Road, on his first day in office. He believes that Ulbricht’s case reflects the government’s overreach in suppressing cryptocurrency and committed to adopting a fairer approach in similar cases.

III. Current Status and Potential Changes in U.S. Cryptocurrency Regulation

1. Current Regulatory Bodies and Their Functions

The regulation of cryptocurrencies in the United States involves multiple agencies, primarily including:

• Securities and Exchange Commission (SEC): Responsible for overseeing projects that treat cryptocurrencies as securities, especially activities like Initial Coin Offerings (ICO). The SEC has classified many cryptocurrency projects as securities and requires them to comply with the relevant securities laws and regulations.
• Commodity Futures Trading Commission (CFTC): Views cryptocurrencies like Bitcoin and Ethereum as commodities and regulates their derivatives markets. The CFTC oversees cryptocurrency futures and options, ensuring market fairness and transparency.
• Financial Crimes Enforcement Network (FinCEN): An agency within the Department of Treasury, responsible for enforcing anti-money laundering (AML) and know-your-customer (KYC) policies. It requires cryptocurrency exchanges and wallet service providers to adhere to these rules to prevent illegal activities.
• Internal Revenue Service (IRS): Treats cryptocurrency as property and requires taxpayers to report their holdings and transactions, paying the corresponding taxes.

2. Issues with the Current Regulatory System

• Fragmented Regulation: The duties of different regulatory bodies are dispersed, leading to a fragmented approach to cryptocurrency regulation. There are disputes between the SEC and CFTC regarding whether cryptocurrencies should be classified as securities or commodities, which makes it difficult for businesses and investors to understand the regulatory boundaries for their assets.
• Lack of a Clear Legislative Framework: Although agencies like the SEC and CFTC regulate cryptocurrency within their respective domains, the U.S. lacks a comprehensive legislative framework for cryptocurrency. This absence of clear legal guidance forces many projects to spend significant resources to ensure compliance before launching in the U.S., causing some to relocate to countries with more favorable regulatory environments.
• Inhibiting Innovation and Market Competitiveness: The SEC’s strict securities regulations and the CFTC’s restrictions on commodities dampen innovation. Overly stringent regulations hinder the development of cryptocurrency companies and startup projects in the U.S.
• Tax Complexity: The IRS’s complex tax requirements for cryptocurrency transactions, especially when dealing with the frequent volatility of cryptocurrency prices, make it difficult for users to accurately report their taxes. For many regular users, this tax complexity increases the cost of trading, which limits market activity.

3. Potential Changes with a Trump Administration

If Donald Trump is elected, the U.S. cryptocurrency regulatory environment could change in the following ways:

• Relaxed Regulatory Environment: By firing the current SEC chairman and changing leadership, there may be a shift in the SEC’s stance on cryptocurrency, leading to more relaxed oversight and a greater encouragement of innovation within the crypto space.
• More Inclusive Policy-Making: The establishment of a cryptocurrency advisory board could make the policy-making process more inclusive, incorporating industry opinions and creating more market-friendly regulations.
• Increased Market Confidence: Establishing a national Bitcoin reserve could signal government approval of Bitcoin, potentially boosting market confidence and attracting more investors into the cryptocurrency market.
• Stronger Privacy Protection: Opposing the issuance of Central Bank Digital Currencies (CBDCs) might protect citizens’ financial privacy, preventing government overreach into individual financial activities.
• Accelerated Industry Development: Support for Bitcoin mining and cryptocurrency innovation could drive the development of related industries and enhance the U.S.’s competitiveness in the global cryptocurrency sector.

IV. Market Reaction to Trump’s Election

1. Cryptocurrency Prices Soar

Following Trump’s election, the cryptocurrency market reacted swiftly, especially with Bitcoin’s price reaching an all-time high of $75,000 on the day the results were announced, and surpassing $90,000 within a week. This surge reflects positive expectations regarding Trump’s cryptocurrency policies and investor optimism about future economic conditions. Other crypto assets like Ethereum, Solana, and meme coins also experienced price increases. The total market capitalization of cryptocurrencies grew by 26% within a week, reaching over $3 trillion by November 14.

2. Investor Sentiment Turns Positive

Investor sentiment has become largely optimistic, with many cryptocurrency industry leaders and investors expressing their support for Trump’s victory on social media. Michael Saylor, founder of MicroStrategy, even referred to Trump as the “Bitcoin President,” stating that the win marks the arrival of spring for the cryptocurrency industry. Brian Armstrong, CEO of Coinbase, also welcomed the “most crypto-friendly Congress in U.S. history.” This positive market atmosphere has undoubtedly boosted investor confidence. Market sentiment has shifted from neutral to extremely greedy.

3. Cryptocurrency-Related Stocks and ETFs Rise

Driven by expectations of Trump’s policies, cryptocurrency-related stocks and ETFs have performed well. Major exchanges like Coinbase and Robinhood saw notable gains. Bitcoin mining companies, such as Cipher Mining, Riot Platforms, and Canaan Technology (ADR), benefited from Trump’s support for domestic Bitcoin mining. Since November 6, the U.S. Bitcoin and Ethereum spot ETFs have experienced substantial net inflows.

MicroStrategy, a major Bitcoin holder, saw a 13.2% increase in its stock. On November 12, Michael Saylor announced that MicroStrategy had achieved a 26.4% return on BTC investments this year, resulting in a net gain of approximately 49,936 BTC for shareholders — equivalent to 157.5 BTC per day, without the usual operational costs or capital investment associated with Bitcoin mining.

Source:https://x.com/saylor/status/1856321148373393786?s=46&t=bcMyidYO0QkS5ajIW9CBdg

V. Analysis of Future Trends in the Cryptocurrency Market

1. Short-term Trends

• Market Response: After Trump’s election, the cryptocurrency market rebounded quickly, especially with significant price increases for mainstream digital assets such as Bitcoin and Ethereum. The market is full of expectations for Trump’s policy promises. This price fluctuation reflects investors’ optimism about future policies. It is expected that in the short term, the cryptocurrency market will continue to be driven by positive sentiment. According to forecasts, Bitcoin’s price could exceed $100,000 by the end of 2024, with some analysts even predicting a price of $150,000.
• Investor Sentiment: Investors generally believe that Trump’s election will lead to a more relaxed regulatory environment and favorable economic policies. This optimism may lead to more funds flowing into the cryptocurrency market, particularly an increase in speculative trading.
• Increased Trading Activity: As market sentiment rises, trading activity is also expected to increase significantly. Investors will become more active in cryptocurrency trading, especially as policy uncertainty grows, and speculative trading may dominate. This will result in greater market volatility, and short-term prices could experience sharp fluctuations.

2. Medium-to-Long-term Trends

• Policy Implementation and Industry Development: In the long run, whether Trump’s administration can fulfill its promises regarding cryptocurrency will directly impact the industry’s development. If Trump successfully implements related legislation, such as the “21st Century Financial Innovation and Technology Act” (FIT21) and the “Stablecoin Payments Act,” the U.S. could become a global leader in cryptocurrency. These policies will provide the industry with a clear regulatory framework, which will attract more businesses and investors into the market.
• Technological Innovation and Capital Inflow: The Trump administration is expected to support fintech innovation, including blockchain technology and the development of digital currencies. This may involve increasing R&D funding, strengthening patent protection, and collaborating with the private sector. With more capital inflows, cryptocurrency’s position as a safe-haven asset could also be enhanced, further driving market development.

3. Potential Risks and Challenges

• Policy Uncertainty: Although Trump has promised to support cryptocurrency, if he fails to effectively implement his promises or new regulatory measures are introduced, market confidence may decline. Additionally, there could be resistance in the process of policy implementation, creating uncertainty.
• Risk of Market Overheating: A rapid rise in the market in the short term could lead to bubble risks, and price corrections should be monitored.
• Global Regulatory Environment: Changes in regulatory policies in other countries could also affect global cryptocurrency market trends, requiring close attention.

VI. Investment Strategy Recommendations and Summary

1.Strategies for Different Types of Investors

• Conservative Investors: It is recommended to allocate funds primarily in mainstream cryptocurrencies such as Bitcoin and Ethereum, as they have large market capitalizations and relatively lower volatility. Additionally, maintain a moderate cash proportion to cope with market fluctuations.
• Moderate Investors: In addition to holding mainstream cryptocurrencies, moderate investors can allocate a portion of their portfolio to medium-cap tokens with potential. It’s important to focus on the project’s fundamentals and technological development.
• Aggressive Investors: Aggressive investors can allocate a portion of their portfolio to emerging project tokens beyond mainstream and medium-cap tokens. However, they should conduct in-depth research into the project’s background, assess risks, and implement stop-loss measures.

2. Risk Assessment and Management Recommendations

• Diversification: Avoid concentrating all funds in a single asset. Diversifying investments can reduce risk.
• Set Stop-Loss Points: Set stop-loss points for each investment to prevent losses from expanding.
• Continuous Learning: Stay updated on market trends and adjust investment strategies accordingly.
• Psychological Preparation: Given the high volatility in the cryptocurrency market, investors should remain calm and avoid emotional decision-making.

In conclusion, Trump’s election has had a positive impact on the cryptocurrency market, with market sentiment rising and prices increasing in the short term. The medium-to-long-term trends will depend on the effectiveness of policy implementation, changes in the regulatory environment, and the market’s own development. Investors should remain cautious, pay attention to policy developments and market risks, adopt investment strategies that match their risk tolerance, manage risks effectively, and make rational decisions.

About Us

Hotcoin Research, as the core investment research department of Hotcoin, is dedicated to providing comprehensive and professional analysis of the crypto market. Our goal is to offer clear market insights and practical operational guidance for investors at all levels. Our professional content includes “Play to Earn Web3” tutorial series, in-depth analysis of crypto market trends, detailed analysis of potential projects, and real-time market observations. Whether you are a newcomer exploring the crypto world or a seasoned investor seeking deep insights, Hotcoin is your reliable partner for understanding and seizing market opportunities.

Risk Disclaimer

The crypto market is highly volatile, and investment involves risks. We strongly advise investors to fully understand these risks and operate within a strict risk management framework to ensure the safety of their funds.

Website：https://www.hotcoin.com/

X：x.com/HotcoinAcademy

Mail：labs@hotcoin.com

Medium：medium.com/@hotcoinglobalofficial