Will the crypto market usher in a historic policy dividend period? Let’s see what professionals say

Original | Odaily Planet Daily ( @OdailyChina )

Author | Fu Howe ( @vincent 31515173 )

With Trumps unexpected victory in the US election, the global cryptocurrency market is full of expectations for the future policy environment. The market generally believes that the Trump administration will bring new opportunities and development opportunities to the crypto industry, which may not only reduce regulatory pressure, but also provide a more open policy space. The Republican Partys consistent pro-business stance, combined with the Trump teams free market thinking, has made market investors and industry leaders optimistic that the US crypto regulatory attitude will gradually change, thereby injecting new momentum into the industry. Under such expectations, the price of Bitcoin quickly rose to $76,400, a record high.

So, how does Trumps election affect the cryptocurrency market? Next, Odaily Planet Daily analyzes from multiple angles, including regulatory trends, the future of Bitcoin, institutional investor expectations, market fluctuations, and DeFi promotion, and collects the views of professionals from all sides.

Changes in the regulatory environment and new policy trends

On the policy front, Trump’s victory has given the cryptocurrency market renewed hope.

The report led by Gautam Chhugani from the Bernstein analysis team pointed out that the Trump administrations inauguration will help accelerate the turnover of senior personnel at the U.S. Securities and Exchange Commission (SEC), and may introduce a crypto-friendly new chairman. Republican support for decentralized finance (DeFi), stablecoins and other fields may promote the passage of regulations such as the Digital Commodities Consumer Protection Act. Potential reforms to these policies will help legitimize the crypto market and bring clearer policy guidance to the industry.

Coinbase Chief Legal Officer Paul Grewal expects the SECs crypto caseload to undergo significant changes under the new chairman appointed by Trump, and believes the new administration will review all existing crypto cases filed by Gary Gensler and distinguish between which cases are clearly scams and frauds and which are not.

Coinbase CEO Brian Armstrong expressed optimism about this prospect, saying that the Republican-controlled Congress is the most crypto-friendly Congress ever, and pointed out that this is a great boon to the industrys compliance and security. The new governments policy reforms not only inject confidence into the market, but also accelerate the development of stablecoin issuers such as Circle and Paxos, accelerating their legalization process in the United States.

In addition, people familiar with the matter revealed that the 21st Century Financial Innovation and Technology Act (FIT21), which was passed by the House of Representatives earlier this year, may be aborted due to Trumps victory. FIT21 aims to create a federal framework for cryptocurrency regulation and determine the jurisdictional boundaries of the CFTC and the SEC. However, as the support of cryptocurrency lobbying groups has shifted to more favorable legislation, the promotion plan of FIT21 may be shelved. The source pointed out that since the Republicans control the White House, the Senate, and may even control the House of Representatives, it is a reasonable choice to support a more favorable alternative bill. It can be seen that the new regulatory environment may be more relaxed, providing a good development space for the market.

Bitcoin reserves and market prospects

The positive impact of Trumps election was quickly reflected in the price of Bitcoin. During the election, Bitcoin once exceeded $75,000, setting a new record high.

Bernstein predicts that the price of Bitcoin may rise further to $90,000 in the future and is expected to reach $200,000 in 2025. This expectation is generally recognized by market analysts, especially for institutional investors, the value attribute of Bitcoin as digital gold is increasingly valued.

Sun Yuchen pointed out that Trumps election may bring a 180-degree turn to the Web3 industry, and believes that Bitcoins market performance has not yet fully reflected the far-reaching impact of this policy change. Institutional allocation to Bitcoin will be significantly improved, becoming one of the mainstream financial assets, and this trend may accelerate further in the next few years.

Market volatility and trading opportunities

Analysts have a positive view on market volatility.

Rong Ren Goh, portfolio manager at Eastspring Investments in Singapore, believes that Trumps victory will bring short-term market volatility, which is a new opportunity for traders. These fluctuations mainly come from the markets expectations of whether Trump will fulfill his crypto-friendly promises. In the past four years, the crypto market has experienced many challenges due to regulatory pressure, and external investors confidence in the crypto industry has gradually weakened. As policy tendencies gradually become clear, market fluctuations may drive investors to re-evaluate their investment strategies in the crypto market, bringing new trading opportunities.

Institutional Investors’ Attitudes and Market Inflows

As Trumps policies shift toward being more friendly to the crypto market, institutional investors interest in the market is also increasing.

James Butterfill, head of research at CoinShares, said the Trump administrations policy shift will bring a new round of capital inflows to digital assets such as Bitcoin, especially among institutional investors. Although the crypto market has attracted about $29 billion in inflows this year, he believes that this growth still has great potential. In particular, with the improvement of the regulatory environment and policy support, the interest of institutional investors will be further enhanced. Market participants generally expect that with the legalization of the crypto market, digital assets will be more widely accepted and further integrated into the traditional financial system in the next few years.

Bitfinex analysts expect the crypto market to usher in a new wave of hope after Trumps election as US president. As the industry expects federal agencies to take a less hostile attitude towards cryptocurrencies, this trend is expected to promote more capital inflows into the Web3 space. We expect that in the short term, a large amount of capital will be released for use in the crypto space, the analysts said.

The rise of the DeFi sector and market vitality

Trumps victory may also promote the rise of the native sector of the crypto industry, especially DeFi. The reason is that before Trumps election, his family launched the DeFi project WIFI, which is currently in pre-sale, indicating his attention to the native sector of crypto. Although Trumps victory did not improve the pre-sale of the project, it shows his attention to the DeFi sector.

Rune Christensen, founder of Sky (formerly MakerDAO), posted on social media that Trumps victory will promote the real and sustained renaissance of DeFi, and the possibility of a 10-fold increase in the number of users in the DeFi field will increase significantly. Christensen pointed out that DeFi can benefit more from the reduction of regulatory uncertainty in the United States than other areas of the crypto industry because its decentralized nature is more in line with the free market principles supported by the Republican Party.