A supporter of Former US president and Republican presidential candidate Donald Trump waits by Milwaukee Mitchell International Airport, Wisconsin, on July 14, 2024.PATRICK T. FALLON/Getty Images
Dean Skurka is the president and chief executive officer of WonderFi Technologies Inc.
The past few years have seen many ups and downs for the evolving digital asset markets. Crypto, from its initial introduction as an alternative currency or a speculative investment for those “in the know,” has transformed into a viable option.
And it’s not just for the young, savvy or overly adventurous investor. With large publicly traded companies and exchange-traded funds in the field, crypto has also become an investment for the mainstream.
And now who better to bring it even more to the masses than Donald Trump?
Still the favoured U.S. presidential candidate despite rival Joe Biden’s dropping out as the Democratic candidate, Mr. Trump spoke on Saturday at the Bitcoin 2024 conference in Nashville. He has cast himself as friendly to the industry: he’s met with sector leaders, including bitcoin miners; his campaign currently accepts crypto donations; and he has reportedly met with Tesla founder Elon Musk to discuss digital asset policy.
The international shock over the attempted assassination of Mr. Trump this month, plus Mr. Biden’s subpar debate performance before that, had galvanized the already strong Republican support base. Political analysts have raised Trump’s chances of winning the U.S. presidency, and according to Polymarket, the world’s largest prediction market, Trump’s odds were at 72 per cent on July 13.
This makes the causes and investments Mr. Trump supports all the more important. The U.S. is the heart of global innovation and finance, and what happens there affects the world. Indeed, bitcoin was up by more than 10 per cent in the days after the assassination attempt.
Not even Mr. Biden’s dropping out of the presidential campaign could change that state of play. Prediction markets still show that Trump has a significant lead over presumptive Democratic nominee Kamala Harris, even though her current odds are marginally better than Mr. Biden prior to him dropping out. In the wake of his withdrawal, bitcoin’s price barely budged, and Mr. Trump’s election chances still remain higher.
The digital asset industry had already been making great strides in gaining legitimacy in recent months, with traditional institutions making significant investments, and regulatory agencies starting to introduce favourable legislation in jurisdictions globally.
Additionally, top-level financial institutions including BlackRock and Fidelity have recently introduced bitcoin ETFs and this week have launched ethereum ETFs in the U.S., making crypto markets even more accessible for retail and institutional investors. The bitcoin ETFs launched in January of this year have been some of the most successful ETF launches ever, with aggregate inflows exceeding US$16-billion.
Companies that pride themselves as being ahead of the curve, including Tesla, MicroStrategy and Block Inc. (formerly Square), have also added significant holdings of bitcoin to their corporate treasuries, endorsing crypto as what they view to be a viable hedge against traditional asset classes. The entry of such participants has increased the credibility of crypto as a viable and hard to ignore investment choice – and now the U.S. political landscape has made the continued rise of the digital asset industry even more probable.
Analysts and investors are now betting that a Trump-led federal government will translate to greater tax cuts, increased tariffs and fewer regulatory restrictions, potentially reversing recent actions by the U.S. Securities and Exchange Commissions to regulate the digital asset industry in what it deems to be a heavy-handed matter.
The announcement this month of first-term Ohio Senator J.D. Vance as Mr. Trump’s vice-presidential running mate has further fuelled such expectations. Mr. Vance is known as a pro-crypto candidate, having already introduced crypto legislation in the Senate and publicly disclosing that he holds more than US$100,000 in bitcoin.
Mr. Vance has also criticized the SEC’s approach to blockchain and crypto legislation. At only 39 years old and having direct experience in both the financial and tech industry, he is not only an appealing counterpart to Mr. Trump’s perceived lack of tech expertise, but he’s also likely to positively influence digital asset policy if elected as vice-president.
Recent movement in the market indicate that crypto will continue to gain popularity with an expected Trump presidency. Voters who support the move of crypto to the mainstream and want fewer – and what they view to be more rational – regulations within the digital asset industry may back his ticket.
But more importantly for crypto: Mr. Trump has repeatedly signalled a crypto-friendly U.S., and his endorsement may be enough to bring more skeptical buyers into the market and build an administration that supports long-term growth within the digital asset industry.