Why are cryptocurrencies seeing a boost after Trump’s victory?

Bitcoin jumped in value following the news that Donald Trump had won the US election, as investors in the digital currency supported a boom in so-called “Trump trading” that followed his victory.

Bitcoin hit a new record after the election, surpassing $75,000. Since then, the cryptocurrency has risen to $76,000.

But while Bitcoin is the one making headlines, it wasn’t the only cryptocurrency that was boosted by Trump’s lopsided election victory.

The rest of the cryptocurrency market also benefited from Trump’s arrival in the White House, with 18 of the top 20 cryptocurrencies by market capitalization rising in the days after the election.

How much have cryptocurrencies risen since Trump’s election?

Since November 5, the entire crypto market has risen from just under $2.4 trillion to just under $2.7 trillion, an increase of $300 billion.

The coin that gained the most during this time was Cardano, with an increase of 31.7 percent.

Solana was up 28.7 percent, ChainLink was up 26.2 percent, Dogecoin was up 25.5 percent, and Sui was up 25 percent.

Ethereum, which represents 13.7 percent of the market, Avalanche and Lido Staked Ether gained more than 20 percent.

Bitcoin, which is up 12.3 percent, represents 60.1 percent of the market, with thousands of other coins accounting for just over 26 percent.

Why has Trump boosted Bitcoin?

Certainly the more cryptocurrency-friendly of the two candidates, Trump made it clear during the campaign that he wants to take advantage of innovation in cryptocurrencies.

This could mean more crypto products, such as ETFs, entering mainstream financial markets.

So far, only 11 crypto ETFs are available in the US, and they were finally approved in January.

“If cryptocurrencies are going to define the future, I want them to be mined, minted and manufactured in the USA,” Trump said during the election campaign, laying out his intention to push cryptocurrencies even further into the financial establishment.

Glen Goodman, author of The cryptocurrency tradertold This is Money: ‘Trump is a late but apparently passionate convert to cryptocurrencies. In 2019 he said, “I’m not a fan of Bitcoin and other cryptocurrencies,” and in 2021, “It just seems like a scam,” shortly before launching his own collection of digital cryptocurrency trading cards, earning him millions of dollars.

Kris Marszalek, CEO of Crypto.com, tweeted after Trump’s victory: “Cryptocurrencies at their core are about the freedom of the individual and the future of cryptocurrencies has never looked brighter than today.”

The idea driving the current rise of cryptocurrencies is that with Trump’s election, the slow adoption of crypto technology could change.

Nick Jones, founder and CEO of digital asset platform Zumo, said: “Supporters will now expect a more innovation-friendly environment.”

“But this will require putting in place an appropriate regulatory framework that encourages innovation and allows the sector to grow, while discouraging bad actors.”

The UK and EU have been quicker than the US to integrate cryptocurrencies into their traditional financial structures, while the SEC has taken a hardline approach, focusing on law enforcement instead. to work with industry players to create a new set of regulations.

Simon Peters, market analyst at Etoro, said: “We are seeing clearer regulatory frameworks for crypto assets in markets such as the UK and Europe and we believe we will see something similar in the US in the near future.”

“We appreciate the importance of regulation in protecting consumers and believe that regulation will act as a positive catalyst for the price of major crypto assets and the continued growth of the crypto ecosystem.”

JJ Kinahan, CEO of IG North America and president of trading platform tastytrade, told This is Money that the SEC’s approach is stifling participation in cryptocurrencies and limiting market liquidity.

He said: “We have a very unique situation here in the US, when it comes to cryptocurrencies, because there is not a lot of clear regulation and there is a lot of uncertainty.”

“It has prevented many major institutions and players from participating in cryptocurrency, even though it is a global asset and retail investors are increasingly interested in buying and trading cryptocurrencies.”

Goodbye Gary Gensler?

A major change in the crypto landscape in the US following Trump’s victory could be the removal of Gary Gensler, chairman of the US Securities and Exchange Commission.

Speaking at a cryptocurrency conference in the summer, Trump said he would oust Gensler from the SEC “on day one” of his presidency.

Jones said: ‘At a conference earlier this year, Trump promised to build a government reserve of Bitcoin and also fire SEC Chairman Gary Gensler. Whether he can actually fire Gensler is up for debate, but he could certainly demote him and appoint a new president.’

While there is no clear successor to Gensler, it is likely that anyone who favors Trump will be willing to support the new president’s innovation policy. Gensler has proven to be one of the main obstacles to creating new regulation on crypto assets.

Speaking at New York University Law School earlier this year, Gensler said, “this is unlikely to become a currency.” It will have to demonstrate its value through disclosure, through use… In the same way that it is chosen among the thousands of securities listed on the stock market.’

David Morrison, senior market analyst at Trade Nation, said: ‘It wouldn’t be a surprise to see SEC chief Gary Gensler heading out the door soon. “His perceived negative attitude towards applying regulations to companies in the sector is considered very unhelpful, and Trump is a big fan of cryptocurrencies.”

Gensler is disliked by those in the crypto sphere for his approach to cryptocurrency enforcement, and SEC Commissioner Mark Uyeda even admitted that the SEC’s recent approach to cryptocurrencies has been a “disaster” for the entire the industry.

With Gensler out of the way, Trump could move forward and build a regulatory framework for cryptocurrencies.