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 about 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 method taken by the US Securities and Trade Fee (SEC) and different regulators towards the business.
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’ method by making use of lawsuits to crypto companies, often alleging unregistered securities distribution, with out disclosing what guidelines these firms violated.
Many have mentioned that the regulator’s method has stifled the business’s progress. The criticism has been echoed internally, together with by Commissioner Hester Peirce, who informed lawmakers throughout a listening to that the SEC’s method towards crypto has been a catastrophe.
In the meantime, Coinbase CLO Paul Grewal lately revealed that the Federal Deposit Insurance coverage Company (FDIC) had instructed banks to abstain from providing crypto companies 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 business all through his marketing campaign. This transformation 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 business is primed for “higher institutional funding” and broader adoption if these shifts change 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 prior to now 24 hours, Hougan identified that crypto already displayed stable 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 instances, resembling 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 would additional strengthen Bitcoin’s enchantment as a “must-have” asset.
Nonetheless, a brand new pro-crypto authorities is a serious catalyst to additional enhance crypto costs.
Deciding on good investments
Whereas optimism is widespread, Hougan cautioned towards a blanket method to crypto investing. He emphasised that almost all initiatives will battle to thrive regardless of a extra supportive setting and will falter because the sector matures.
Hougan added that the regulatory reset will present a good taking part in discipline for initiatives to succeed or fail on their deserves. He suggested traders to take a disciplined method to distinguish promising initiatives from people who could underperform.
However, the Bitwise CIO mentioned the outlook is now brighter than ever for the early adopters who invested in crypto amid uncertainty.
