What a Trump presidency could mean for crypto

The return of President Trump to the White House has already caused significant ripples on global markets, with Bitcoin emerging as a standout asset in the broader market rally.

Investors are sending a clear message: optimism for the future of crypto under Trump, especially given his public support for Bitcoin and digital assets.

President Trump’s administration is widely expected to create a more favourable environment for crypto’s growth, boosting market confidence and attracting new investment.

In this article, we explore how a Trump-led administration could offer several advantages for cryptocurrency. Deregulation, pro-crypto appointments, and clearer regulatory frameworks are expected shifts that would benefit both users and investors.

Institutional adoption and Federal support

Prominent figures such as Wyoming Senator Cynthia Lummis have voiced strong support for Bitcoin. Lummis has led proposed legislation to allow the US government to purchase 200,000 BTC annually for the next five years. This would mark a major step toward federal adoption of crypto and pave the way for greater institutional involvement.

Alongside these political shifts, institutional adoption of crypto continues to grow. The launch of Bitcoin ETFs in early 2024 made it easier for institutional investors to gain exposure to Bitcoin. As Trump’s administration embraces digital assets, it could further fuel this trend, encouraging more institutional players to enter the market.

While the specifics remain uncertain, the mere perception of such moves is enough to drive prices upward in a market as narrative driven as crypto.

Deregulation and pro-crypto appointments

One of the key policy shifts under a Trump presidency is likely to be deregulation. Trump has publicly stated his intention to replace SEC Chair Gary Gensler, a figure criticised by the crypto community for his enforcement-heavy regulatory approach.

Under Gensler’s leadership, the SEC has targeted major crypto firms like Coinbase, Uniswap, and most recently, Australia-founded Immutable, a blockchain technology company focused on NFTs and Web3 gaming. The SEC has issued Wells Notices to these entities (formal warnings of potential legal action for suspected securities law violations.) This "regulation by enforcement" approach has led many in the crypto sector to push for clearer, more consistent regulatory guidelines.

A new, potentially pro-crypto SEC chair could shift the regulatory landscape dramatically. Moving from enforcement to a more transparent, predictable framework that would foster the practical use of digital currencies.

This change would reduce regulatory uncertainty and encourage businesses and investors to enter the market.

Market reactions: Bitcoin's all-time high

The crypto market has already begun reacting to these anticipated policy shifts. As Trump gained momentum in the polls, Bitcoin surged to a new all-time high (ATH) of $81,500, surpassing its previous ATH of $73,777 in March 2024, marking a 17% gain in the past week. This price surge reflects growing investor optimism about the anticipated regulatory changes expected.

This latest rally coincided with a significant increase in trading volumes on platforms like BTC Markets, particularly for trades over $50K, which reached their highest levels since May 2024. This suggests that non-retail investors are positioning themselves for the potential benefits of a Trump presidency.

While Bitcoin led the charge, altcoins have also experienced significant volatility. For example, during the week, Ethereum and Solana have surged by 30%, and some decentralised finance (DeFi) tokens saw price jumps of over 30-40%. Major DeFi protocols like Aave and Uniswap, which had announced fundamental changes in anticipation of the election, have already seen one of the largest price surges. The easing of regulatory uncertainty acting as a key catalyst.

The return of the retail investor

Recent data from BTC Markets shows that retail investors are returning to the crypto market. In the past week, platform logins are up 216% week-on-week, and distinct users have increased by 115%. Additionally, Bitcoin trading volume is up 30% week-on-week, reflecting a significant jump in activity compared to the past three months.

While the initial surge in trading volume was likely driven by institutional players and larger traders, the increasing involvement of retail investors is evident. This uptick in retail activity suggests that more individuals are looking to capitalise on the current market momentum and the expected favourable regulatory landscape.

While the full impact of a Trump presidency on crypto remains to be seen, the early signs suggest that the future of digital assets is bright, and investors are positioning themselves to capitalise on this opportunity.