What a Trump presidency means for crypto

Produced in partnership with Bitwise

Digital assets have soared significantly, with bitcoin nearing US $100,000, following Donald Trump’s victory in the US Presidential Election. Investors are expressing optimism about Trump’s pro-crypto stance creating a more supportive regulatory landscape for cryptocurrencies.

The CRYP Crypto Innovators ETF  provides ‘picks and shovels’ exposure to the companies building crypto mining equipment, crypto trading venues, and other key services that allow the crypto economy to thrive.

CRYP aims to track the performance of the Bitwise Crypto Innovators Index (before fees and expenses) that provides exposure to global companies at the forefront of the dynamic crypto economy such as Coinbase, Riot Blockchain, MicroStrategy and more¹.

The following article was written by Matt Hougan, CIO – Bitwise, discussing the implications of a second Trump administration for crypto assets.

What a Trump Presidency Means for Crypto

Bitwise CIO Matt Hougan shares the top three things crypto investors should take away from the US Presidential Election.

Make no mistake about it: Crypto won the election.

Markets have been rallying big-time on the news.

The GOP—which has pro-crypto policies written into its party platform—won the presidency decisively, taking control of the Senate and the House. It will enter power in January with a strong mandate to follow through on its campaign commitments to the crypto industry, including:

• A change of leadership at the SEC with current Chair Gary Gensler stepping down from the role on January 20, 2025 – the day of Trump’s inauguration;
• The end of Operation Choke Point 2.0, which restricted crypto’s ability to access the traditional banking system;
• Pro-crypto legislation on stablecoins, market structure, and more.

Bitcoin has been trading at all-time highs and other crypto assets are up sharply. In the short term, I don’t know if we will hold the highs or pull back. But in the medium to long term, I see us going much, much higher.

To be specific: I envisage Bitcoin approaching $100k this year and $200k in 2025. Other crypto assets (which previously faced more regulatory risk) may do even better.

I’ve never been more bullish than I am right now. Below, I thought I’d share three key thoughts on the outlook for crypto this morning.

Point 1: Crypto Unbound — We Can Finally See What Crypto Can Do

Crypto has been operating for the past four years with both hands tied behind its back.

It has faced countless lawsuits from the SEC and hostile actions from other regulators. Even basic rights—like the ability to access banking services or custody bitcoin in an institutional setting—have been constrained or under threat.

This hostile environment cast a massive shadow across the industry that precluded mainstream adoption and spooked institutional investors. It is one thing for a TradFi firm to invest in a disruptive new technology; it’s quite another to allocate to one that is under constant regulatory threat.

That is now gone, swept away in a momentous election that will install a pro-crypto Congress and president in Washington

I suspect the lifting of this veil will accelerate every aspect of crypto’s growth. It will drive greater institutional investment, spark widespread adoption of crypto technology by the financial services industry, and accelerate innovation and the development of mainstream applications.

Crypto has long promised that it can transform society in positive ways; now we get the chance to see it try.

In believe we are entering the Golden Age of Crypto.

Point 2: Remember the Context — We Were Going Up Even Before the Election

I was strongly bullish on crypto almost regardless of what happened in the election. The industry currently has multiple tailwinds, including:

• Rapidly Rising Institutional Demand: You can see this in the massive inflows into bitcoin ETFs (more than $23 billion), in the fact that 60% of the top 25 hedge funds own bitcoin, and in blue-chip institutions like Emory University now disclosing new positions in crypto. The potential upside is staggering: There are trillions of dollars of institutional assets that currently have 0% exposure to crypto; that was already beginning to change before the election result, and is expected to accelerate from here.
• Constrained Supply: We almost forget, but the bitcoin halving in April 2024 reduced the amount of new supply entering the market by billions of dollars’ worth per year. Limited supply will meet increased demand in the coming months.
• Debt, Deficits, and Interest Rate Cuts: One thing that the election has not changed, unfortunately: The U.S. deficit is now $36 trillion—and rising $1 trillion every 100 days. The Congressional Budget Office expects this to continue under Trump’s proposed policies; it may even get worse. Add in the likelihood of more rate cuts from the Fed and uneasy economic conditions, and you have the perfect macro setup to make bitcoin a “must have” asset for investors.
• Rising Real-World Use Cases: For evidence of crypto’s application in daily life, look no further than the massive success of Polymarket, the prediction market that correctly forecast the result of this election. Look also at areas ranging from stablecoins to gaming to decentralized finance. Crypto is going mainstream fast.

I could add more: Wall Street’s embrace of crypto; rapid improvements in blockchain technology; companies and governments allocating to crypto. If we were in a bull market before the election result; the outcome should only accelerate things.

Point 3: Selection Will Matter

I’ll close with a note of caution.

The crypto market is ebullient today and all assets have been rising. There is widespread expectation of a more supportive regulatory environment, and I think that’s well founded. That will likely mean more crypto ETFs, more institutional adoption, and more growth.

But it’s worth remembering that not all crypto projects are good, and not all of them will succeed. All a regulatory reset will do is place crypto on a fair and even playing field, where it can succeed or fail on its own merits. It will be incumbent on investors to separate the wheat from the chaff, and to take a disciplined approach to evaluating risk. Here at Bitwise we will continue to do our part.

We have exciting years ahead as an industry. Congratulations to all the investors who stuck their necks out on crypto when it was unpopular. You were the early adopters, who saw possibility when others saw only risk. We appreciate you being on this journey with us.

Risks and Important Information

An investment in CRYP should be considered very high risk and should only be considered by informed investors seeking a small allocation to a very high volatility investment. CRYP provides focused exposure to companies involved in servicing crypto-asset markets or which have material investments in crypto-assets. Risks associated with an investment in CRYP includes market risk, crypto-innovators risk, technology risk, international investment risk and concentration risk. CRYP will not invest in crypto assets directly and will not track price movements of any crypto assets. For more information on risks and other features of CRYP, please see the TMD and PDS, available at www.betashares.com.au.

No Advice on Investment; Risk of Loss: Prior to making any investment decision, each investor must undertake its own independent examination and investigation, including the merits and risks involved in an investment, and must base its investment decision—including a determination whether the investment would be a suitable investment for the investor—on such examination and investigation.

Crypto assets are digital representations of value that function as a medium of exchange, a unit of account, or a store of value, but they do not have legal tender status. Crypto assets are sometimes exchanged for U.S. dollars or other currencies around the world, but they are not currently backed nor supported by any government or central bank. Their value is completely derived by market forces of supply and demand, and they are more volatile than traditional currencies, stocks, or bonds.

Trading in crypto assets comes with significant risks, including volatile market price swings or flash crashes, market manipulation, and cybersecurity risks and risk of losing principal or all of your investment. In addition, crypto asset markets and exchanges are not regulated with the same controls or customer protections available in equity, option, futures, or foreign exchange investing.

Crypto asset trading requires knowledge of crypto asset markets. In attempting to profit through crypto asset trading, you must compete with traders worldwide. You should have appropriate knowledge and experience before engaging in substantial crypto asset trading. Crypto asset trading can lead to large and immediate financial losses. Under certain market conditions, you may find it difficult or impossible to liquidate a position quickly at a reasonable price.

The opinions expressed represent an assessment of the market environment at a specific time and are not intended to be a forecast of future events, or a guarantee of future results, and are subject to further discussion, completion and amendment. The information herein is not intended to provide, and should not be relied upon for, accounting, legal or tax advice, or investment recommendations. You should consult your accounting, legal, tax or other advisors about the matters discussed herein.

1. No guarantee these companies will remain holdings in CRYP ↑