How President-Elect Trump Could Supercharge Your Crypto This Holiday!
Crypto enthusiasts, brace yourselves! The crypto wave is surging, and it’s all thanks to a familiar face—Donald Trump. As Bitcoin (BTC 6.45%), the titan of cryptocurrencies, continues to shine this year, the entire crypto landscape is buzzing with excitement. In the weeks leading up to the election, crypto prices started their climb, buoyed by the betting odds that favored Trump’s return.
But once Trump clinched victory, it unleashed a tidal wave of buying across the board—from Bitcoin to trending tokens like Dogecoin (DOGE 6.55%), and even tokens like XRP (XRP -8.35%) that have struggled recently. The momentum keeps building, with Trump ready to make this holiday season one for the crypto books. Let’s dive into why this is happening.
The Regulatory Environment is Shifting in Favor of Crypto
Trump made a promise during the campaign to support crypto stakeholders, and he seems poised to deliver. He even vowed to replace Gary Gensler, the SEC chair, on day one. However, it looks like Gensler may step down voluntarily, clearing the way for a pro-crypto environment.
The relationship between the crypto community and Gensler has been rocky. In 2020, the SEC took serious action against Ripple, the company behind XRP, launching a lawsuit over unregistered security sales. This marked a pivotal conflict between crypto advocates and the SEC, who aimed for regulatory control, while stakeholders pushed for a more lenient approach. Ripple’s founders initially saw success, but the SEC’s appeal kept the tension alive.
Fast forward to March 2022, Gensler and the SEC introduced Staff Accounting Bulletin (SAB) 121, requiring banks to treat crypto assets in custodial accounts as liabilities. This didn’t sit well with banks and created unnecessary obstacles. With Gensler likely out, it’s anticipated that SAB 121, and the Ripple lawsuit, might soon follow suit.
Additionally, buzz is building that the Trump administration may pass the reins of Bitcoin and Ethereum (ETH 5.22%) regulation to the Commodities Futures Trading Commission (CFTC). Crypto advocates have long preferred this route, as the SEC’s regulations can be daunting.
With a Republican majority in Congress, the winds of change are blowing favorably for crypto. Coinbase (COIN 6.98%) Chief Policy Officer Faryar Shirzad recently declared that a Trump administration could fast-track vital cryptocurrency legislation. “We have the most pro-crypto Congress in history,” Shirzad proclaimed.
Two critical bills are making their way through Congress. The first is the Financial Innovation and Technology for the 21st Century Act, which has already been approved by the House. This bill aims to create a clear legal framework for cryptocurrencies and digital assets, eliminating much of the confusion that has held back the industry.
The second bill, the Clarity for Payment Stablecoins Act, would establish a legal framework for stablecoin companies. Stablecoins are vital digital assets pegged to traditional currencies, enabling users to harness all the benefits without the rollercoaster volatility.
More Exciting Developments on the Horizon
Even before Trump officially resumes office, the crypto community is already feeling the positive effects. Expect even more exciting developments, like increased liquidity with spot exchange-traded funds (ETFs). The SEC’s recent approval of spot-Bitcoin and spot-Ethereum ETFs has set a precedent, and with a friendlier SEC, we could see spot ETFs for other tokens like XRP and Solana (SOL 2.47%) soon.
ETFs will make it easier for everyday investors to tap into crypto. Traditional brokerages are likely to expand their crypto offerings, as seen when popular retail platform Robinhood (HOOD 3.52%) added new tokens shortly after Trump’s victory. While many cryptocurrencies have already seen substantial gains, we could still be on the brink of further growth, with the rally poised to continue into 2025.
Bram Berkowitz holds positions in Bitcoin, Ethereum, and XRP. The Motley Fool has positions in and recommends Bitcoin, Coinbase Global, Ethereum, Solana, and XRP. For more insights, check out the disclosure policy.
