the trump era & crypto

Donald Trump’s return to the White House, backed by a wave of pro-crypto lawmakers, has sparked fresh excitement in the digital asset world. In the wake of the election, Bitcoin soared past not just $81,000, but now above $90,000 almost consistently,  signaling renewed confidence that a Trump-led administration could reshape the regulatory landscape for cryptocurrencies. The momentum could nudge key government bodies such as the Federal Reserve and the SEC for shifts that may bring a lighter, more innovation-focused approach to digital asset policies. 

As optimism mounts, investors and crypto enthusiasts alike are looking ahead with anticipation, wondering just how transformative this political shift might be for the future of crypto. This newsletter explores what these changes could mean for the industry and why the months ahead might mark a defining moment for digital assets.

The impact of Trump’s electoral win on the crypto market was immediate and impressive, sending Bitcoin surging to a historic high of over $81,800. This rally, which marked Bitcoin’s highest price to date, signaled a strong belief in a more favorable regulatory climate for digital assets. From a low of $38,505 in early 2024, Bitcoin’s value has more than doubled. By Monday morning, Bitcoin was trading at $81,417, only slightly below its session peak of $81,858, showing a steady upward trajectory.

Ethereum followed suit, climbing above $3,200 for the first time in several months and highlighting positive sentiment across the broader crypto market. With pro-crypto congressional candidates securing victories, many who received support from over $119 million in industry funding, the outlook for crypto-friendly legislation has grown brighter. The market’s optimism reflects the potential for reduced restrictions and increased support for blockchain innovation & for digital assets, in general.

The momentum extended beyond Bitcoin and Ethereum. Solana rose by 2%, while Dogecoin and Shiba Inu spiked by 30% and 15.8%, respectively. XRP also gained, rising by 3.6%, as market participants welcomed a political environment that seems poised to foster growth in the digital asset space.

As we send out this alpha unhashed 30th edition, BTC is knocking on the door of $100k and might just cross it by the time you read this!

digital assets - breaking through $3T

With key support levels now at ​​$85,657 and $75,715, and resistance levels at $99,313 and $98,991, Bitcoin’s bullish momentum appears well-supported in this evolving market. Market confidence is further underscored by a “Higher High, Higher Low” formation on the daily timeframe, signaling sustained strength and ongoing bullish sentiment across the crypto landscape.

Whilst a full scale altcoin rally hasn't started yet, and in fact crypto markets have been highly volatile, overall digital assets is now at 3.2T and the next level is really 5T - that pathy way is unlikely to be a straight smooth one, and will see significant swings, but it may be well within reason to expect crypto markets to ho past 3T within Trump’s term.

With Trump back in office, expectations are rising around a possible shift in the Federal Reserve’s approach. Known for his vocal criticism of restrictive Fed policies, Trump may push for more accommodating monetary strategies aimed at boosting economic growth. This shift could have several cascading effects on inflation rates, interest rates, and crypto asset valuations.

> influence on the Federal Reserve’s approach: Trump’s previous administration frequently criticized restrictive policies by the Federal Reserve, favoring a strategy that would encourage economic expansion. If his influence prompts the Fed to adopt looser policies, there may be an increase in fiscal stimulus or rate cuts, both of which would boost liquidity in the market. For the crypto industry, this could mean heightened investor interest, especially in assets such as Bitcoin, which are often viewed as protection against inflation.

> interest rates and inflation: A Trump-led influence on the Federal Reserve could lead to policies that are more tolerant of inflation, possibly prioritizing growth over strict inflation targets. Such an environment could prompt both retail and institutional investors to seek alternative stores of value, making cryptocurrencies a more attractive investment. If inflation persists under these looser monetary policies, Bitcoin and similar digital assets may experience increased demand as investors look for ways to preserve value in an environment where the purchasing power of traditional currency could erode.

Trump’s return to office, coupled with a pro-crypto Congress, has fueled expectations for a more favorable regulatory landscape from the SEC. Industry supporters are optimistic that a Trump administration will reduce restrictive measures and foster innovation in digital assets.

> leadership shifts at the SEC: A significant change anticipated is the potential replacement of SEC head Gary Gensler, known for his strict and biased approach to crypto regulation. Though Gensler’s term is set to end in 2026, analysts suggest he may step down, clearing the way for a successor with a pro-crypto outlook. This shift could prompt a more hands-off SEC stance, easing compliance burdens on crypto firms and allowing them to expand with less interference.

> implications for crypto regulations: Trump’s administration is expected to support pro-crypto legislation, with the potential approval of new financial products such as Exchange-Traded Funds (ETFs) for assets beyond Bitcoin & Ethereum, such as Solana or XRP. This move could drive broader institutional involvement and boost demand. Furthermore, DeFi projects may thrive under lighter regulation, positioning the U.S. as a competitive player in digital innovation.

> DeFi regulation: In recent years, DeFi has faced significant regulatory scrutiny from the SEC. Several DeFi founders and platforms have been targeted for allegedly misleading investors and operating without proper registration. For instance, in 2024, the SEC settled charges with Rari Capital and its co-founders for misleading investors and acting as unregistered brokers, with the platform managing over $1 billion at its peak. Similarly, in 2023, BarnBridge DAO and its founders faced SEC action for failing to register the sale of structured crypto asset securities. 

Critics argue that the SEC’s enforcement actions have been biased, often targeting DeFi projects under the guise of investor protection while potentially stifling innovation. The lack of clear regulatory guidelines has led to confusion and concern within the DeFi community. However, with the anticipated shift in the SEC’s leadership under a Trump administration, there is optimism that DeFi could emerge as a significant beneficiary. A more lenient regulatory approach may allow projects to develop without the constant threat of enforcement actions.

Trump’s return signals potential fiscal shifts that could favor the crypto market, particularly with his focus on tax cuts, economic growth, and support for innovative sectors like blockchain. 

> tax policies and capital gains: Trump’s economic philosophy has consistently leaned toward tax cuts to stimulate investment and economic growth. Under his administration, reduced capital gains taxes are likely to benefit high-return assets like cryptocurrencies, making them more attractive to both retail and institutional investors. Lower taxes on crypto gains could encourage more active participation in the market, potentially driving further price increases as demand for digital assets rises. However, while favorable tax conditions could bolster crypto investments, some analysts caution that trade tariffs or inflationary pressures from fiscal policies could inject volatility into the market.

> financial support for blockchain innovation: Trump’s emphasis on domestic economic growth and technological leadership could also lead to government incentives promoting blockchain and digital innovation. Encouraging blockchain startups and offering support for U.S.-based projects would not only advance the industry but also position the U.S. as a competitive leader in the global blockchain landscape.

Trump’s return to office and a pro-crypto Congress signal a promising era for digital assets in the U.S., with anticipated changes in policy, regulation, and innovation setting the stage for crypto’s expansion globally. Investors are closely watching for regulatory adjustments and financial incentives that could reinforce crypto as a mainstream asset class, potentially establishing the U.S. as a global leader in digital finance.

Building on this momentum, the Trump-backed project, World Liberty Financial, seeks to elevate U.S.-pegged stablecoins in global finance. With a mission to mainstream DeFi, the project aims to strengthen the U.S. dollar’s role internationally, promoting stablecoins as a foundation for global transactions.

Challenges may arise—policy shifts could face delays, inflationary pressures may stir volatility, and regulatory changes at the SEC might encounter resistance. Yet, with strategic policymaking, a solid regulatory framework, and support for blockchain innovation, these challenges can be navigated. For the crypto community, the months ahead offer unparalleled opportunities for growth and transformation, with the potential for the U.S. to lead a thriving global crypto ecosystem.

global implications > If the U.S. adopts a more pro-crypto stance, other countries may be encouraged to follow suit. By reducing restrictions and promoting blockchain innovation, the U.S. could create a model regulatory framework that inspires similar moves worldwide, fostering a more cohesive international approach to digital assets.

Moreover, with the U.S. as a leading hub for crypto, demand for USD-backed stablecoins and other dollar-linked crypto products could grow, strengthening the dollar’s position in global digital transactions, which is both good and bad. 

Standard Chartered issued a bullish forecast, predicting the crypto market cap could hit $10 trillion by 2026. The bank anticipates gains similar to 2021, driven by rising asset prices and mainstream adoption of real-world applications.

A study by Zellix shows higher crypto interest in Democratic-leaning states than Republican ones, posing challenges for Trump’s crypto project. States like New York and California lead in crypto engagement, while conservative regions show more skepticism.

Murad Mahmudov predicts meme coins will retain community and speculative value until 2025, while Arthur Hayes sees them as short-term trades. AI meme coins may lose appeal soon, with investors shifting focus amid rapid tech advancements.

reflections-

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