As someone who has been closely following the cryptocurrency market since its inception, I must admit that the recent developments are nothing short of intriguing. The prospect of a second Trump administration, as a crypto enthusiast, seems to hold both opportunities and challenges.
It’s expected that a potential second term for President Trump could boost the cryptocurrency industry, not just within the U.S., but globally, according to financial analysts who spoke with CryptoMoon following the November 5th election.
This development significantly increases the likelihood of regulations for the digital asset market structure, potentially including a Stablecoin Payment Act. With Republicans likely controlling both the Senate and House of Representatives, Trump may choose to appoint a pro-cryptocurrency chair for the Securities and Exchange Commission as soon as his new administration begins. The current SEC position is held by Gary Gensler, who is known as an adversary in the crypto industry.
Boris Bohrer-Bilowitzki, CEO of the UK and Europe-based Concordium blockchain company, expressed to CryptoMoon that he thinks Donald Trump’s second term as U.S. President could be a pivotal event for the crypto industry on a global scale.
“I expect that he will do this by taking a lighter stance on the regulation of crypto, ensuring that bureaucratic policies do not slow down the progress of America’s crypto and digital assets companies.”
Over the next 4 to 6 years, Chiente Hsu, co-founder of ALEXGO, a Bitcoin intermediary, predicts that the digital assets sector will experience significant growth. This forecast includes an increase in cryptocurrency-focused exchange-traded funds (ETFs) and derivatives, as well as a potential reduction in legal actions against the crypto industry by regulatory bodies.
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Still, there are potential downsides, even as the president-elect pledges to make the United States the “crypto capital of the planet.”
In a recent interview with CryptoMoon, Timothy Massad – a former chairman of the US Commodity Futures Trading Commission and now a research fellow at Harvard’s Kennedy School – posed the question: “Would a potential second Trump administration foster technological advancements that promote beneficial innovation?
Alternatively, could it be that the upcoming administration sets regulations which primarily inflate token costs, thus benefiting founders at the expense of unsuspecting individual investors who are left with the burden – essentially creating a second Initial Coin Offering bubble.
According to Massad, the newly elected president seems less focused on intricate policy matters, and there are hints that he might shift his stance on cryptocurrencies.
As a crypto investor, I’ve been wondering if Trump will dismiss Gary Gensler from his position as SEC Chair on his first day in office, as he has promised. However, it might not be that straightforward. The Securities and Exchange Commission (SEC) is an independent government agency, which means its board members serve for a term of five years. The president can only remove them under specific circumstances, such as if they are deemed inefficient, negligent in their duties, or guilty of misconduct while in office.
According to Massad, one action Trump could take right away is promoting a current commissioner who is favorable towards cryptocurrencies to head the agency. Two potential candidates for this role are Hester Pierce or Mark Uyeda.
Ohio is the ‘bigger story’
The election brought about a change in the presidency and shifted the Senate’s power from Democratic to Republican hands. Notably, among those who lost their seats for the Democrats was Ohio Senator Sherrod Brown, who was defeated by businessman Bernie Moreno.
Thank you, Ohio!
— Bernie Moreno (@berniemoreno) November 6, 2024
In terms of the influence of November 5th on cryptocurrency, “the more significant narrative revolves around the Ohio Senate race,” according to Aaron Klein, who holds the Miriam K. Carliner Chair and is a senior fellow in economic studies at the Brookings Institution, as he shared with CryptoMoon.
Brown, who served as the influential chairman of the Senate Banking Committee, was known for being skeptical about cryptocurrencies. Critics often viewed him as a significant hurdle in the pursuit of market structure reform. According to Klein, his defeat signifies a substantial step forward for favorable crypto legislation, provided that legislators can reach an agreement on the specifics, as reported to CryptoMoon.
Regardless of whether Brown survived Election Day, he wouldn’t have remained as chairman of the Senate Banking Committee due to his “oppositional” role within the minority party. However, since the Senate Banking Committee values consensus over many other committees, he might still have held some sway in the proceedings, according to Klein’s suggestion.
The enactment of legislation concerning the structure of digital asset markets would undoubtedly be a significant milestone. Such legislation would bring regulatory clarity, potentially reducing volatility within the cryptocurrency market, as pointed out by Hsu.
“We might see pension funds — both state and corporate — and similar institutional investors increase allocations to digital assets.”
According to Jesper Johansen, CEO and founder of Northstake A/S, the incoming U.S. President holds the potential to bring stability to the crypto market, as it requires immediate regulatory adjustments. The current situation has been unclear for far too long, causing uncertainty. For instance, Johansen poses the question: Is staked Ether considered a commodity or an investment security?
To ensure that the overall gains from Ethereum are accurately reflected in their ETFs, asset managers must understand how to properly implement staking securely,” he noted.
Regardless, there’s no certainty in the political landscape. As Bohrer-Bilowitzki pointed out, potential opposition could arise from more traditionalist Republican politicians who are critical of cryptocurrency and view it as a potential danger to established financial systems.
Before the election, prospects were looking up for passing legislation on stablecoins. Unlike other cryptocurrencies, stablecoins are more straightforward for lawmakers to grasp as they have clear requirements and are thought to reinforce the strength of the U.S. dollar, according to Massad.
Compared to the U.S. dollar, Bitcoin may appear to be a potential rival. However, it remains uncertain whether lawmakers can reach a consensus on the specifics of cryptocurrency regulations, even if they generally acknowledge the necessity for guidelines governing market structures.
Does the US really matter?
Could it be that the significance of the United States might not be as pivotal as some people think, regarding the worldwide future of cryptocurrencies and blockchain technology? After all, there are 151 other countries, according to the latest study by Chainalysis, that also have a role in crypto adoption.
Carol Alexander, a finance professor at the University of Sussex in the UK, stated to CryptoMoon that the United States has a significant impact on cryptocurrency trading. This is evident in the trading patterns of crypto, which mimic those of traditional markets such as equities, with the highest volumes occurring during the early hours of New York’s trading day, including on Binance.
According to Alexander, the cost of Bitcoin, together with Ether and several well-established alternative coins, is anticipated to climb higher still, at least up until the beginning of next year. He believes this bull run will foster greater adoption among individual investors as well as financial institutions due to its upward momentum.
Still, the new administration may be less interested than its predecessor in protecting small investors, which concerns her. “This growth will be on the back of failing regulations — huge hidden risks will be swept under the carpet as the SEC ceases to take civil actions against unregulated exchanges,” Alexander said.
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Others are generally more hopeful. Bobby Ong, co-founder and COO of CoinGecko, stated to CryptoMoon that Trump’s victory is advantageous for cryptocurrency due to his pro-crypto stance throughout his campaign. Furthermore, numerous American crypto companies have advocated for Donald Trump, which could potentially be beneficial for the crypto sector in the upcoming years.
Bohrer-Bilowitzki posited that Trump might consider cryptocurrencies significant from a geopolitical standpoint. He elaborated on this point by saying:
“Let’s also not forget Trump’s views of American adversaries like China: He will no doubt want to outflank Chinese crypto companies by making America the leader in this industry.”
A significant number of Democrats, along with others, consider another term for President Trump as stepping into uncharted dangerous waters. In a November 5 opinion piece published by The New York Times, historian Jon Meacham cautioned that it could lead to “an open invitation to disorder.
Massad stated, “There is much debate over the policies Trump might implement. However, no matter what transpires, it’s essential that the law is upheld. This principle is crucial for all businesses, including the crypto sector, according to him.
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2024-11-09 16:36