The Path of Cryptocurrency after US Presidential Election

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Market Updates

06 Nov 2024

Donald Trump has won the majority electoral vote with 277 votes over Kamala Harris's 226 in the 2024 U.S. presidential election, securing the victory after a decisive win in Pennsylvania, according to Fox News. Media outlets also report that Trump held a strong lead across all seven swing states, paving his way to the presidency. Additionally, the U.S. Senate appears to have been secured by the Republican Party, gaining a majority with 51 seats. With Republicans also leading in the House (currently at 189 seats versus the Democrats' 163), the legislative landscape now favors pro-crypto policies, as Republican lawmakers have historically shown support for the industry.

Trump’s victory is anticipated to benefit the cryptocurrency sector, as the first "crypto president", particularly if he follows through on commitments to establish Bitcoin as a reserve asset, pardon Silk Road founder Ross Ulbricht, and replace SEC Chair Gary Gensler. The crypto sector could expect a more favorable regulatory landscape, particularly if Hester Peirce, a known advocate for crypto-friendly policies, assumes the SEC chair position. This shift may support the approval of ETFs for major tokens like Solana, Ripple, and Dogecoin, broaden Real-World Asset (RWA) applications, and drive institutional activity in decentralized finance (DeFi), given Trump’s previous support for DeFi via initiatives like WLFI.

On the fiscal front, Trump's policies could push the U.S. debt-to-GDP ratio to 116%, according to Bloomberg, creating potential pressure on the Federal Reserve to expedite interest rate cuts. Attention will now shift to the Fed’s forthcoming decisions on rate adjustments and quantitative tightening. This macroeconomic environment could set a favorable stage for Bitcoin, with strong performance expected in Q4 and laying the groundwork for a potential bull cycle in 2025.

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