Key Insights:
Donald Trump promised to include Bitcoin in the US Strategic Reserves.
He also promised fairer regulations and an end to the SEC's crusade against crypto.
The Department of Government Efficiency could also make a considerable difference.
Newer promises include tax cuts, fewer regulations, raising minimum wages, and boosting incomes.
Trump could also make pro-crypto announcements regarding energy policy and stablecoin regulations.
The most impactful among Trump's promises is the inclusion of Bitcoin in the US strategic reserves. This could revolutionize the crypto markets and easily push Bitcoin above $250k within this year. With Bitcoin reserves, US could easily lift the purchasing power of the Dollar by creating a supply shortage in Bitcoin squeezing its price.
Further, experts predict that the US could reduce its national debt by 36% in the next two and a half decades, leading to a substantial fallback in the fiscal deficit. This move also prevents a debt spiral in which new debt is created to repay the old debt.
The most lasting impact of Trump's presidency could be fairer crypto regulations that are expected to push the crypto market cap towards a $9 trillion market cap. This step could establish a framework for global markets, prompting other countries to follow pro-crypto policies.
Not so coincidentally, Trump enters office on the same day as the current SEC chief Gary Gensler leaves his, i.e., on 20 Jan 2024.
During the 2024 Bitcoin Nashville Conference, Donald Trump committed to fairer crypto policies by ending Joe Biden and his administration. In the same conference, Trump called the current SEC's tactics an anti-crypto crusade.
Further, Trump has also appointed former SEC Chief Paul Atkins, who served during George Bush Jr.'s era, as the next SEC Chief. Paul has been known to be a pro-business and pro-crypto candidate for the position.
The Financial Innovation and Technology for the 21st Century, abbreviated as the FIT-21 Act, seeks to provide fully transparent crypto regulations. The bipartisan act that now has been passed by the House of Representatives waits for Presidential assent.
Upon receiving the assent, the act would make the SEC the regulator for centralized cryptocurrencies (greater than 20% token supply with a single entity), and the CFTC will regulate non-centralized cryptocurrencies like Bitcoin, Ethereum, Dogecoin, and XRP. Further, crypto exchanges would be jointly regulated by both agencies.
Trump also promised fairer stablecoin regulations under his Presidency. A lack of clear regulations caused Binance's BUSD to demise. At its peak in 2022, BUSD was one of the top five cryptos by market cap and commanded a market cap of $25 billion.
The NYDFS's approval of RLUSD seems to be a step in that direction. NYDFS is the same department that caused the demise of BUSD.
There have also been several newer developments that could propel crypto markets to greater heights.
Among new post-election promises, Trump's announcement about lower taxes and boosting the average US income would ensure consistent inflows into the crypto markets, possibly making up for the low chances of a rate cut in 2025.
Trump's action on inflation could be the key to unlocking greater liquidity in the crypto markets. With inflation, the US Fed raises interest rates and keeps them at a higher level, which in turn results in higher costs of goods (due to inflation) and lower surplus money (due to higher interest rates). All of these create a bottleneck for liquidity to enter the crypto markets.
Trump's promise to beat inflation could result in more rate cuts in 2025. The Department of Government Efficiency (D.O.G.E.) could play a major role by cutting unnecessary government spending. Higher government spending creates a higher fiscal deficit, which then prompts the Fed to print more money, resulting in higher inflation.
Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information but will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.