As Donald Trump’s prospects for a second presidency increase, significant shifts could be on the horizon for the cryptocurrency landscape, particularly benefiting U.S.-based firms and posing potential hurdles for foreign competitors. This shift is emerging as Trump demonstrates a growing alignment with the crypto sector, while the likelihood of his election gains traction. Recent polling data from CBS News indicates Trump holds a commanding 52% of support among likely voters in a potential rematch against President Joe Biden. However, Biden’s recent announcement that he will not seek re-election and his endorsement of Vice President Kamala Harris as the Democratic nominee leaves the final November ballot uncertain.
Market participants and analysts are increasingly optimistic about the positive impacts on American crypto entities under a second Trump administration. Christian Catalini, founder of the MIT Cryptoeconomics Lab, notes that “almost everyone in the U.S. would stand to benefit if they adhere to the new regulations once implemented.”
Bitcoin Miners Surge
Following Trump’s June meeting with Bitcoin miners and his subsequent remarks on Truth Social about Bitcoin being a “last line of defense against a CBDC,” there has been a notable market reaction. Trump’s call to ensure all remaining Bitcoin is “MADE IN THE USA!!!” has invigorated the market. Bitcoin’s price saw a nearly 10% increase since Biden’s poor debate performance and a failed assassination attempt against Trump. Concurrently, the stock prices of major Bitcoin mining firms like Marathon Digital and Riot Platforms have surged by about 30%, while Cipher Mining’s shares have jumped nearly 50%, partly due to interest in a potential sale.
Revived IPO Prospects
The collapse of the crypto market in 2022 seemed to stymie initial public offerings (IPOs) in the sector, but the landscape is changing. Circle, the issuer of the $33 billion USDC stablecoin, has refiled for an IPO after an earlier attempt fell through. Northern Data, which has transitioned from crypto mining to AI computing, is considering a U.S. listing valued up to $16 billion, and Kraken, the second-largest U.S.-based crypto exchange, is preparing for its IPO. The U.S. Securities and Exchange Commission (SEC) has previously posed hurdles with its classification of several tokens as unregistered securities, and criticism has been directed at SEC Chair Gary Gensler from prominent crypto figures like Coinbase’s Brian Armstrong. A Trump administration could potentially usher in a more crypto-friendly SEC chair, easing these regulatory obstacles.
Banking and Digital Exchanges
A Trump presidency might also lead to a more accommodating banking environment for digital-asset firms. The current banking system has seen a contraction in banks willing to facilitate fiat-to-crypto conversions, exacerbated by the failures of crypto-friendly banks such as Silvergate and Signature. This change could restore access to banking services for crypto firms.
Challenges for Offshore Rivals
While many in the industry anticipate gains from a Trump presidency, some foreign firms may face setbacks. Offshore crypto trading platforms like Binance, OKX, and Deribit have gained market share due to stringent U.S. regulations. However, a shift toward clearer legal frameworks and more crypto-friendly regulation in the U.S. could enable American companies to offer advanced trading services and a broader range of crypto options and futures contracts.
Chinese conglomerate Bitmain, a leading Bitcoin mining equipment manufacturer, might also encounter challenges. Trump’s trade rhetoric against China and his push to increase U.S. Bitcoin mining could intensify competition for Bitmain, particularly with U.S. competitors like Block and Auradine introducing new mining technology.
Central Bank Digital Currencies
Central Bank Digital Currencies (CBDCs) present another contentious issue under Trump. Many in the crypto community view CBDCs as tools for increased governmental surveillance. Trump has pledged to oppose the digitization of the dollar, aligning with the concerns of crypto advocates who view CBDCs with skepticism.
