This year has been a remarkable year for the cryptomarket with multiple significant macroeconomic events that will ultimately determine the course of the market in the next couple of years. Starting with The Spot Bitcoin ETF approvals, the Bitcoin halving, the Interest rate cut and now a Pro-Crypto US president. What a year!
I believe the world has changed in the favor of digital assets, a new financial landscape is being formed, new millionaires and new billionaires are on the horizon. It’s just a matter of time, the global financial fabric will be interwoven with digital assets technologies and perhaps we are about to see prices of digital currencies skyrocket.
As at the time of writing this article, it’s just 2 weeks after the elections, we have seen Bitcoin break its all time high multiple times. The crypto market cap moved from $2.4 Trillion to $3 Trillion, which means about $600 billion has just been transferred into the crypto market within these 2 weeks. Investors’ sentiments have turned super bullish.
You might want to ask, why is everyone bullish on Trump’s victory? What’s peculiar? can we trust these market reactions as the new trend or is this a temporary reaction? Is it safe to go all in? What are the fundamental pointers to base my sentiments on?
To address the above questions, we are going to look into some key areas of interest in the most recent U.S. presidential election outcome and its implications to investors.
- Regulatory Environment: Unlike the previous administration which had low interest and tight regulations for digital assets. The incoming Trump’s administration is pro-crypto which promises to be more lenient with regulations, fostering innovation, therby, inviting more institutional investments. These potential change in regulatory stance is too important for the market and will bring in a couple of new $trillion dollars into the crypto market.
- Tax Policies: Investors believe that we are going to see a significant change in capital gains tax, especially those targeted at digital assets, which will encourage individual and institutional participation.
- Global Acceptance: It is not news that the United States is a model for other countries all around the world. If the U.S. government is lenient with digital currencies, we will see several countries follow the same template, thereby leading to a mass adoption of cryptocurrencies and the blockchain technology.
- Innovation and Blockchain Policy: Trump’s administration could
support blockchain technology beyond crypto, potentially increasing investment and interest in Web3 technologies, decentralized finance (DeFi), and other blockchain applications, which would positively impact the broader web-3 ecosystem. - General Market Sentiment: This is the 4th Bitcoin cycle and it’s believed to be a supercycle. I had just outlined the four very important macro-economic events that happened this year alone. In fact investors just needed a Trump win as the final nail to the coffin. It is as if it has been signed and sealed that we have entered into the super cycle and no one would want to be left behind. So sentiment is extremely-bullish!
- Beyond the crypto market: A de-dollarization campaign is currently on-going, as a result we have seen gold break several all time highs in recent times. Gold and Bitcoin usually have a positive correlation. As countries are seeking alternative reserve assets they cling to gold and we believe that eventually Bitcoin will become the favorite alternative to the US dollar.
In summary, Trump’s era is expected to mark the supercycle for cryptocurrency adoption, and even beyond cryptocurrency, we are poised to see a massive adoption of the blockchain technology and a softer regulatory landscape for digital assets, which will be crucial in integrating digital assets into the fabrics of the global financial framework.
