Bitwise CIO Matthew Hougan mentioned in a Nov. 6 memo that Donald Trump’s victory in the US presidential elections will catalyze a “Golden Age of Crypto” as the brand new administration is ready to enhance the regulatory panorama.
Crypto markets rallied considerably as Trump’s odds of successful the election climbed above 95% on prediction markets. Bitcoin (BTC) hit a brand new all-time excessive of roughly $75,650 after months of range-bound worth motion.
As of press time, the flagship crypto was buying and selling at $75,300, up 7.69% over the previous day, primarily based on CryptoSlate information.
Nonetheless, not all cryptocurrencies carried out equally over the previous 24 hours, with Hougan highlighting this disconnect to warn traders to be “extra selective” with their investments.
Regulatory limitations fall
In accordance with Hougan, the primary elementary change in a pro-crypto presidency time period could be a shift within the hostile strategy taken by the US Securities and Trade Fee (SEC) and different regulators towards the trade.
The Bitwise CIO mentioned:
“Crypto has been working for the previous 4 years with each arms tied behind its again.”
For the previous few years, the SEC has taken a ‘regulation by enforcement’ strategy by making use of lawsuits to crypto companies, normally alleging unregistered securities distribution, with out disclosing what guidelines these corporations violated.
Many have mentioned that the regulator’s strategy has stifled the trade’s progress. The criticism has been echoed internally, together with by Commissioner Hester Peirce, who advised lawmakers throughout a listening to that the SEC’s strategy towards crypto has been a catastrophe.
In the meantime, Coinbase CLO Paul Grewal just lately revealed that the Federal Deposit Insurance coverage Company (FDIC) had instructed banks to abstain from providing crypto providers in over 20 incidents.
Hougan believes the brand new administration is anticipated to be supportive, given Trump’s pleasant remarks in the direction of the crypto trade all through his marketing campaign. This modification in stance features a new management on the SEC and a possible finish to restrictive practices like Operation Choke Level 2.0.
Hougan believes the trade is primed for “higher institutional funding” and broader adoption if these shifts turn into concrete. The sector can now deal with innovation, unimpeded by regulatory hurdles, probably accelerating crypto’s mainstream integration.
Propelling costs
Regardless of the numerous worth leaps up to now 24 hours, Hougan identified that crypto already displayed strong fundamentals. He cited strong institutional demand, with over $23 billion in inflows into Bitcoin exchange-traded funds (ETF) and rising curiosity from prime hedge funds and blue-chip establishments.
Moreover, the April 2024 Bitcoin halving, alongside rising real-world use circumstances, reminiscent of stablecoins and the prediction market Polymarket, additionally supplied a powerful basis for progress.
In the meantime, rising US debt and potential rate of interest cuts create a macroeconomic backdrop that might additional strengthen Bitcoin’s enchantment as a “must-have” asset.
Nonetheless, a brand new pro-crypto authorities is a significant catalyst to additional increase crypto costs.
Deciding on good investments
Whereas optimism is widespread, Hougan cautioned in opposition to a blanket strategy to crypto investing. He emphasised that almost all initiatives will wrestle to thrive regardless of a extra supportive setting and should falter because the sector matures.
Hougan added that the regulatory reset will present a good enjoying subject for initiatives to succeed or fail on their deserves. He suggested traders to take a disciplined strategy to distinguish promising initiatives from those who might underperform.
Nonetheless, the Bitwise CIO mentioned the outlook is now brighter than ever for the early adopters who invested in crypto amid uncertainty.
