How will Trump impact the digital assets market?

After a long and tedious battle, we finally know who has won the US Presidential election. For the upcoming four years, we will have Donald Trump as the President of the United States of America. Furthermore, Republicans won the majority in the Senate and are leading in the House of Representatives, potentially resulting in a clean sweep for the Republican Party. President-elect Trump will be inaugurated on the 20th of January 2025 but what does this election result mean for the digital assets industry?

Orange Man supports Orange Coin

In Trump’s first term, he was definitely not an advocate of digital assets as he voiced his negative opinions on various occasions, going so far as to call it based on thin air. However, in the past two years, his stance completely changed. Trump went on to sell three Non-Fungible token collections, stating that he would make the US the digital assets hub of the world, and has welcomed Bitcoin miners to the White House if he wins. 

As it became clear that Trump was winning the election, Bitcoin and the broader digital assets market experienced a surge. Many market participants and observers believe that Bitcoin can create enough momentum to end between $80,000 and $90,000 at year's end. And we believe that this is possible too. We published an article earlier this month in which we highlight that Bitcoin first needs to set higher highs before we can experience an optimal altcoin dominant phase. You can access this article here. So, we expect that Bitcoin will remain a dominant narrative for now, especially as most of Trump’s focus was on Bitcoin.

Nevertheless, as Bitcoin’s price gains upward momentum, more attention will be paid to the industry, potentially attracting new investors and capital. Furthermore, an upward trend of Bitcoin tends to lift the overall market with it, so we expect altcoins to follow Bitcoin but potentially outperform the orange coin at the end of 2024 or the beginning of 2025.

Trump is not the only one fighting for the industry

Most attention regarding digital assets and the election has centered on Trump, but he has built an entourage of crypto-supportive allies. His vice president, J.D. Vance, is a prominent advocate, having voiced positive views on digital assets multiple times. In the past, Vance supported pro-crypto legislation and received substantial campaign funding from crypto entrepreneur Peter Thiel during his Senate run. A 2021 filing also disclosed that he owns over $100,000 in Bitcoin.

Then there’s Elon Musk. Musk has made it his mission to support Trump’s presidential bid, amplifying his messages on X (formerly Twitter), as he believes Trump is well-positioned to reduce government spending and close budget deficits. Musk, often called the “Doge King” for his frequent mentions of the Dogecoin memecoin, also directed Tesla to acquire Bitcoin. Though he has expressed some skepticism about the industry, he remains an active supporter.

Though perhaps unfamiliar to some, Howard Lutnick has joined Trump’s transition team alongside Robert F. Kennedy Jr. Lutnick, a prominent American businessman, serves as Chairman and CEO of Cantor Fitzgerald, L.P., a leading global financial services firm. He is also a strong advocate for digital assets, particularly Bitcoin. Kennedy shares this enthusiasm, and with both assisting in selecting personnel for Trump’s new administration, they may prioritize finding fellow supporters of digital assets.

This highlights that we are not only dealing with a pro-digital asset President but also with a broader network of advocates. This means that Trump’s support for the industry isn’t isolated; it is backed by an entire team of allies, enhancing the likelihood of pro-crypto policies.

How will Trump affect the legal aspects of digital assets?

After many nights of hoping and wishing, the digital assets industry will finally be able to say goodbye to Gary Gensler, the current Chairman of the Securities and Exchange Commission (SEC). Under Gensler’s command, the SEC has been charging digital assets firms and projects into oblivion, which has created an incredibly hostile environment for the US. This has also caused various firms to leave the US. This hasn’t gone unnoticed by Trump and he voiced his opinion on this matter in a true Trump manner. The president-elect called Gensler unfit for the job and that he would fire him on day one. Although Trump doesn’t have the power to do this, the President must justify removing an agency official based on inefficiency, neglect of duty, or malfeasance in office. 

However, we find it unlikely that Gensler will remain in office, as Trump would likely make his role challenging. We anticipate that Gensler might step down on his terms. Beyond the SEC, we expect the U.S. to become more open to digital assets as Republicans take control of the Senate and likely the House. Historically, the strongest opposition to the industry has come from Democrats, and with a Republican majority, we foresee more favorable bills emerging. This doesn’t mean smooth sailing, as not every Republican supports the industry. Still, it’s likely to be far more supportive than the past four years under the Biden administration. 

Hodl’s takeaways 

With the first pro-digital asset President in the White House, we have high hopes for the next four years. We believe this term could create a more favorable environment for the industry, allowing businesses and projects to flourish while implementing regulations that protect investors without stifling market participants. While we can’t guarantee continuous price appreciation, we believe we’re on the cusp of significant growth—perhaps a once-in-a-lifetime opportunity.

If you’d like to explore these opportunities and learn how Hodl’s investment strategies leverage this growth through unique methods, download our free brochure. Inside, we delve into digital asset use cases, their role in a modern investment portfolio, and an in-depth look at how our various investment strategies operate.

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