By Brett Munster
What the election means for crypto
On November 5th, the American people reelected Donald Trump as President. Additionally, the Republican Party, which has adopted a number of pro-crypto policies in its platform, secured a majority in both the Senate and the House, setting the stage for a much more favorable regulatory environment for digital assets in the coming years.
Before we delve into what the election results might mean for the crypto industry, I want to make it clear that this edition is not an endorsement of Trump or either political party. Crypto, like the internet, is a technology with characteristics that resonate with both Democratic and Republican values. In that sense, I truly believe crypto is non-partisan. Many members from both political parties have supported bitcoin and the broader crypto industry in Washington, D.C., for years.
It’s also important to acknowledge that the election has far-reaching implications beyond crypto. While a Trump victory may lead to policy shifts that benefit the crypto industry, this does not imply that his presidency will necessarily be positive or negative for other significant issues facing the country. My expertise is in crypto, and this is a crypto-focused newsletter. Therefore, this edition will center on the potential impact of Trump’s second term on the crypto industry. However, please don’t interpret this as a suggestion that a Trump presidency lacks broader consequences for other critical societal issues.
That said, Trump’s return to office is undeniably a positive development for the crypto industry. While Harris hinted at a potentially softer stance on crypto, Trump actively embraced the industry throughout his campaign. In July, he headlined Bitcoin 2024, the year’s largest Bitcoin conference. During his keynote speech, he unveiled several specific policy actions he would take and promised to position the United States as “the world’s cryptocurrency capital.”
The promise that drew the longest and loudest applause was Trump’s pledge to remove SEC Chair Gary Gensler. “On day one, I will fire Gary Gensler,” Trump declared. Although it’s unclear if the president has the legal authority to directly dismiss the SEC chair, it likely doesn’t matter. Traditionally, the SEC chair steps down after a change in administration, and Gensler has previously suggested he would resign if Trump were elected. Even if Gensler chose to stay, the president has the power to appoint a new chairperson, meaning Gensler could remain at the SEC but without leadership authority. In any case, whether Gensler steps down or Trump appoints a new chair, the crypto industry’s chief opponent at the SEC would no longer hold power. The list of potential candidates for SEC chair include industry-friendly figures such as Daniel Gallagher (a former SEC official now with Robinhood), Hester Peirce (aka Crypto Mom) and Mark Uyeda.
The anticipated shift in SEC leadership is expected to drive a thorough reevaluation of the agency’s stance on classifying cryptoassets as securities, refining registration requirements, and reassessing its enforcement strategies. This could mark the end of an era defined by regulatory ambiguity, aggressive legal actions, and “regulation through enforcement.” With new leadership, there is hope that the SEC will embrace good-faith rulemaking, creating clear, constructive guidelines that foster innovation rather than stifling it. This shift might even lead to the dismissal of several outstanding lawsuits and Wells Notices currently issued against a number of crypto companies.
Trump is also expected to appoint new leaders at the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC). With fresh leadership, these agencies could reverse restrictive policies, such as SAB 121, which has limited crypto firms’ access to banking services, and eliminate discriminatory targeting of specific industries, often referred to as “Chokepoint 2.0.” Notably, Trump took similar steps during his first term to counter the original Chokepoint initiative, and his former Comptroller, Brian Brooks, introduced more inclusive banking policies that fostered inclusion of the crypto industry—policies later rescinded under the Biden Administration.
Trump also proposed a groundbreaking shift in how the government views bitcoin, proposing that the U.S. government establish bitcoin as a “strategic reserve asset.” As one of the largest holders of bitcoin globally, with over 200,000 BTC, the U.S. government’s decision to formally designate bitcoin as a strategic reserve asset would not only benefit the U.S. financially but could signal to other nations that bitcoin is of growing importance in the global financial landscape. Such a shift could ignite a global competition among countries to secure as much of the asset as possible, further cementing bitcoin’s place in the global financial landscape.
Another key promise from Trump was the passage of comprehensive cryptocurrency regulation, likely encompassing a stablecoin bill and a market structure bill. Both bills have been proposed in Congress over the past year, with FIT21 passing the House by a large bipartisan margin but stalling in the Senate. With Republicans now controlling the Senate, it seems almost certain that the regulatory clarity the crypto industry has been waiting for will finally come to fruition. To ensure the legislation’s success, Trump pledged to create a Bitcoin and Crypto Presidential Advisory Council, promising that “the rules will be written by people who love your industry, not hate your industry.”
Trump also committed to halting the development of a central bank digital currency (CBDC) and ending the U.S. government’s aggressive crackdown on the crypto sector. In a recent interview, he went as far as suggesting that there should be no capital gains tax on bitcoin, further aligning himself with the interests of the crypto community.
Trump’s campaign has also emphasized strong support for the bitcoin mining industry. In June, he met privately with about a dozen bitcoin mining executives and experts. This closed-door meeting, which included representatives from major mining companies, was followed by Trump publicly praising the industry on social media. Just a few weeks later, during his speech at Bitcoin 2024, he voiced his ambition for the United States to become the global leader in bitcoin mining.
These are ambitious promises, and if even a single one materializes—let alone several—it could mark a pivotal shift in how the U.S. government engages with the crypto industry. That said, I’m realistic: Trump is known for making bold promises, some of which go unfulfilled. While I remain cautiously optimistic, I have reservations about whether he will fully follow through on these commitments. However, focusing solely on whether he will deliver misses the larger point.
The past few years have been marked by an administration led by Elizabeth Warren and her “anti-crypto army,” which has been openly antagonistic toward the crypto industry. Under the leadership of SEC Chairman Gary Gensler, appointed by President Biden in 2021, the SEC has consistently overstepped its authority, failed to provide regulatory clarity, and initiated more than 100 enforcement actions against crypto firms. Meanwhile, the administration has led a systematic campaign of de-banking against the crypto industry, with the FDIC playing a key role. Known as Operation Chokepoint 2.0, this initiative saw the FDIC instruct banks to cease providing services to crypto companies on at least 23 occasions in 2022 and illegally pressured the two most crypto-friendly banks—Silvergate and Signature—to shut down. The White House also vetoed the repeal of SAB 121, which had bipartisan support in both the House and Senate and would have allowed banks to custody crypto. Additionally, the administration has sanctioned crypto privacy tools and mixers, warned of digital assets potentially posing systemic risks to the economy, and proposed a 30% tax on crypto mining—an action that could drive the mining industry out of the U.S. Over the past few years, the administration has actively targeted the crypto sector, creating a hostile environment.
Even if Trump’s promises ultimately prove to be little more than political posturing, the crypto industry would still find itself in a far more favorable regulatory position under his leadership than under Biden. In the worst-case scenario, where Trump does nothing and simply ignores the crypto industry, it would still be a substantial improvement over the current administration’s aggressive stance. Having a president who is neutral on crypto would be a major step forward compared to the constant attacks and vilification the industry has faced in recent years.
On the other hand, the best-case scenario is that these promises are not empty, and while I remain cautiously optimistic, there is reason to believe Trump may follow through on at least some of his commitments. Trump’s vice-presidential pick, JD Vance, has publicly expressed his support for bitcoin and confirmed that he owns the cryptocurrency. Additionally, Howard Lutnick, who is leading Trump’s transition team and will play a significant role in staffing key positions, is a major proponent of crypto. Lutnick personally holds hundreds of millions of dollars in bitcoin and serves as CEO of Cantor Fitzgerald, which operates a bitcoin lending business. Lutnick is also one of the leading candidates for U.S. Treasury Secretary, alongside Scott Bessent, another crypto-friendly figure. Bessent has expressed excitement about Trump’s embrace of cryptocurrency. RFK Jr., who is expected to have a role in Trump’s administration, is also a long-time bitcoin advocate. Furthermore, both Elon Musk and Vivek Ramaswamy, two influential advisors to Trump, are outspoken supporters of bitcoin and crypto. Trump himself owns Ethereum, and his sons hold bitcoin. With such a strong network of crypto advocates in key positions, it’s hard to imagine that the regulatory environment won’t improve under a Trump presidency.
Think about that for a second. Bitcoin has grown from nothing to nearly $2 trillion in market cap during a period when the U.S. government has been indifferent or, in the case of the last couple of years, outright hostile. The crypto industry has never operated in a world in which the U.S. government is actively supportive. Imagine what happens if we get that for the first time.
A more favorable regulatory environment could spark renewed growth in the U.S. crypto sector, potentially creating thousands of new jobs. This shift could also encourage companies that previously left the U.S. to reconsider returning, reinforcing the country’s position as a leader in the global crypto market. Trump’s push for broader crypto adoption could have a ripple effect, inspiring other nations to adopt similarly favorable regulatory frameworks, which might unlock a surge of liquidity into the crypto ecosystem. With increased government support, both institutional and retail investors would gain greater confidence, fueling further expansion in the industry.
With a Republican-controlled Senate and House, Trump faces minimal barriers to enacting a more crypto-friendly agenda. His promises suggest a potential shift in how the federal government will engage with digital currencies and the blockchain sector moving forward. Speaking of the Senate…
The crypto industry scored a major victory when Bernie Moreno defeated incumbent Sherrod Brown in Ohio. Aside from Elizabeth Warren, Brown has been one of the Senate’s most vocal critics of crypto, wielding significant influence as Chair of the Senate Banking Committee, which oversees the SEC and enabled Gary Gensler’s unchecked actions. Brown’s antagonism toward the industry was evident in his repeated dissemination of factually incorrect statements and his staunch opposition to any crypto-related legislation, often blocking progress in the Senate. In contrast, Moreno is a strong supporter of crypto and even founded a blockchain-based company focused on putting car titles on the blockchain. This victory also positions Tim Scott, the current ranking member of the Senate Banking Committee, to potentially take the chairmanship. Scott has been a vocal advocate for crypto, notably speaking at Bitcoin 2024, further strengthening the industry’s allies in the Senate.
Another key race saw strong crypto advocate Tim Sheehy defeat anti-crypto incumbent Jon Tester in Montana. Overall, 19 pro-crypto candidates were elected to the Senate, compared to 12 opponents, marking a significant shift in the balance of power. Perhaps most notably, with Senate leadership positions up for grabs, all the leading candidates—John Cornyn, John Thune, and Rick Scott—have received “A” ratings from Stand With Crypto for their pro-crypto stances. This represents a major shift in favor of the crypto industry within the Senate.
The pro-crypto momentum extends beyond the Senate. In the House, 273 representatives with pro crypto positions were elected, far outpacing the 122 anti-crypto candidates, with a few races still ongoing. In total, 292 pro-crypto candidates will serve in both the House and Senate, meaning over 60% of elected officials in Congress are publicly pro-crypto. Notably, pro-crypto candidates were elected in 45 out of 50 states—a historic achievement, especially considering this was the first election cycle where crypto was prominently on the ballot.
The growing political influence of the crypto industry is becoming increasingly evident, and Fairshake, its leading political action committee, is a prime example of this shift. In this year’s election, Fairshake supported 56 pro-crypto candidates in House and Senate races, achieving remarkable success. Of these, at least 50 candidates emerged victorious, with a few results still pending. Fairshake’s bipartisan strategy is particularly noteworthy, as the PAC distributed nearly equal funding to both Republican and Democratic candidates in the House. This approach highlights Fairshake’s commitment to fostering broad support for the crypto industry and demonstrates that pro-crypto policies resonate across party lines.
The bottom line is that, regardless of Trump’s actions, the recent shakeup in Congress significantly increases the likelihood of passing both a stablecoin bill and a market structure bill. Additionally, it’s highly probable that the U.S. will retain its existing bitcoin holdings, with the possibility that the government may even begin acquiring more bitcoin in the future.
At the Bitcoin 2024 conference, Senator Cynthia Lummis introduced a groundbreaking bill that not only designates the 200,000 BTC currently held by the U.S. government as a strategic reserve asset but also mandates the purchase of an additional 1 million bitcoins over the next five years. Following Trump’s victory on November 5th, Lummis reaffirmed her commitment to expanding the U.S. bitcoin stockpile and pledged to have the bill signed within the first 100 days of the new administration. While Trump has proposed holding onto seized bitcoin, Lummis’ plan takes it a step further by positioning the U.S. as an active market participant. This shift would elevate bitcoin to a status akin to gold, integrating it into the national reserve and granting it unprecedented legitimacy. If successful, the bill could trigger a BTC supply shock as other nations follow the U.S.’s lead, acquiring bitcoin for their own reserves. While the bill’s passage remains uncertain, it underscores the dramatic shift in the U.S. government’s approach to bitcoin over the next four years.
Not only are Trump’s crypto-specific policies likely to benefit the industry, but his broader economic policies could also drive prices higher. In August, Trump announced that, if elected, he would work to lower interest rates. Lower interest rates typically push bitcoin’s price upward for several reasons. First, as bond and debt yields decline, investors often seek higher returns in alternative assets like bitcoin, driving up demand. Additionally, lower interest rates make borrowing cheaper, stimulating credit growth and potentially expanding the money supply. In this environment, bitcoin’s fixed supply and “hard money” characteristics make it especially appealing as a hedge against inflation and currency devaluation. Furthermore, in a prolonged low-rate environment, bitcoin’s decentralized nature stands in contrast to traditional assets more directly impacted by central bank policies, enhancing its attractiveness as a store of value.
Trump’s proposed tariffs and deportation policies are likely to be inflationary as well, by raising the cost of goods and services domestically. Tariffs increase the price of imported goods, which, in turn, raises costs for consumers and businesses, leading to higher prices across various sectors. Similarly, deportation policies that reduce the labor force—particularly in industries like agriculture and construction—could push up wages as employers compete for a smaller pool of workers. Both policies contribute to rising production costs, which are typically passed on to consumers, exerting further inflationary pressure on the economy. Rising inflation erodes the value of fiat currencies, which in turn makes bitcoin’s fixed supply and decentralized nature more attractive as a hedge, driving increased demand and likely pushing its price higher.
Finally, Trump has yet to articulate a clear plan to address the nation’s mounting debt. Trump advocates for tax cuts, which could boost disposable income for Americans, but may also further reduce tax revenue, worsening the deficit. Under Trump’s presidency, expanding government deficits and increased spending are likely to fuel inflationary pressures. As debt levels rise, interest rates remain low, and inflation accelerates, the value of traditional currencies may erode, prompting investors to seek out scarce assets like bitcoin, reinforcing its role as a store of value.
After years of regulatory challenges and an adversarial stance by the government towards the crypto industry, the sector may finally find a clearer path to a more favorable environment under new leadership. The incoming administration is poised to appoint leaders at key government agencies—such as the SEC, OCC, FDIC, and Treasury—who are more supportive of crypto. With the overwhelming majority of members in both the Senate and the House now pro-crypto, there is a real opportunity for much-needed, thoughtful regulation that allows crypto assets to integrate with and enhance the existing financial system. Furthermore, as the deficit, inflation, and currency debasement continue to worsen, the case for store-of-value assets like gold and bitcoin grows stronger, accelerating the shift away from reliance on the dollar. This election may prove to be a watershed moment for crypto, not just in the U.S. but on the global stage, with implications that could shape the industry for years to come.
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First U.K. pension fund invests in bitcoin.
Michigan State Pension Fund buys $10M Ethereum becoming the first U.S. pension fund to publicly buy spot Ethereum ETF shares.
BlackRock’s spot bitcoin ETF sets record-breaking volume following election.
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18 U.S. states and DeFi lobby sue SEC over crypto enforcement actions.
Disclaimer: This is not investment advice. The content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. Nothing contained constitutes a solicitation, recommendation, endorsement, or offer to buy or sell any securities or other financial instruments in this or in any other jurisdiction in which such solicitation or offer would be unlawful under the securities laws of such jurisdiction. All Content is information of a general nature and does not address the circumstances of any particular individual or entity. Opinions expressed are solely my own and do not express the views or opinions of Blockforce Capital.
Disclaimer: This is not investment advice. The content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. Nothing contained constitutes a solicitation, recommendation, endorsement, or offer to buy or sell any securities or other financial instruments in this or in any other jurisdiction in which such solicitation or offer would be unlawful under the securities laws of such jurisdiction. All Content is information of a general nature and does not address the circumstances of any particular individual or entity. Opinions expressed are solely my own and do not express the views or opinions of Blockforce Capital or Onramp Invest.
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