‘Almost’ all in crypto’s a winners in a second Trump administration

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• Bitcoin miners and crypto companies benefited from a potential second term for Donald Trump, as his pro-crypto stance gained momentum.
• Trump’s pro-crypto stance has significantly altered the competitive landscape, disadvantaging foreign companies and strengthening US-based firms.

OUR TAKE
Under a potential second Trump administration, there was a notable resurgence of interest in cryptocurrency and digital assets, reflecting a pivotal shift in regulatory and economic landscapes. Donald Trump’s growing endorsement of bitcoin mining and digital currencies had significant implications for the financial sector. This included the potential for a regulatory environment more conducive to innovation and investment within the United States, as observed in the market reactions and policy discussions surrounding crypto assets. Plus, Trump’ stance reflects broader global debates about the role of digital currencies in monetary policy and privacy rights, and could influence future regulatory frameworks and international standards in the digital asset space.
–Heidi Luo, BTW reporter

What happened

Bitcoin miners and crypto companies facing regulatory hurdles in their attempts to go public in the US could see significant gains under a potential second term for Donald Trump. This sentiment is gaining traction among market watchers as Trump’s increasing embrace of cryptocurrencies coincides with his rising re-election prospects.

Recent polling data from CBS News shows Trump leading with 52% of likely voters in a hypothetical rematch against President Joe Biden. However, uncertainty remains over the final line-up for the November election after Biden announced his decision not to seek re-election and endorsed vice president Kamala Harris for the Democratic nomination.

Market entities believe that Trump’s pro-crypto stance could disadvantage foreign companies, potentially leading to a loss of market share in the digital asset sector. The shift in regulatory attitudes under Trump’s administration is seen as favouring domestic crypto companies and those navigating the complexities of US securities laws. This policy environment has sparked optimism among industry players, who anticipate favourable conditions for expanded operations and investment in the US crypto market under a potential Trump presidency.

Also read: Trump pitches himself as ‘Crypto President’ at tech fundraiser

Also read: Cryptocurrency: Policy shifts and market trends

Why it’s important

During his campaign, Trump met with bitcoin miners and stated on social media his preference for all bitcoin operations to be “MADE IN THE USA!!!” This stance has coincided with notable price rises in bitcoin and related stocks, with Marathon Digital and Riot Platforms up around 30% and Cipher Mining exploring a sale amid takeover interest.

In addition to the bullish market reaction, there is renewed optimism for crypto IPOs in the US, with Circle, a leading issuer of the USDC stablecoin, has filed for an IPO after previously shelving similar plans due to regulatory uncertainties. Northern Data, which has moved from crypto mining to AI computing, is also considering a US listing with a potential valuation of $16 billion.

Trading digital assets in the US has been difficult due to regulatory hurdles at the SEC under chairman Gary Gensler. Many tokens are considered unregistered securities, which has been criticised by executives such as Coinbase’s Brian Armstrong. A second Trump term could bring a more crypto-friendly SEC chairman, potentially easing regulations for US crypto firms.

Trump’s re-election could also improve banking access for crypto firms. US platforms have struggled with limited banking options after banks such as Silvergate and Signature closed their doors. Meanwhile, overseas rivals like Binance are thriving by offering services that US firms can’t. Chinese giant Bitmain, a major bitcoin miner, faces tougher times amid Trump’s push to localise bitcoin production in the US.

Trump opposes central bank digital currencies (CBDCs), which are seen as tools for greater financial oversight. This stance also shapes the future of crypto regulation under his administration.