Markets
Is Trump Good for Bitcoin? Analysts Say So Despite Past ‘Coup’ Stance
Top line
The “Trump factor” is a positive catalyst for the world’s largest cryptocurrency, bitcoin, Bernstein analysts said in a note to clients on Tuesday, as Donald Trump’s selection of the crypto-friendly Ohio senator JD Vance while his running mate further fueled bitcoin investors’ optimism about the outlook for self-proclaimed “crypto president” Trump, despite Trump’s previous criticism of bitcoin.
Donald Trump, left, and JD Vance are presenting themselves as a pro-crypto ticket.
Los Angeles Times via Getty Images
Key facts
“The cryptocurrency market interprets a Trump victory scenario as more positive for cryptocurrencies” and the price of bitcoin is “positively correlated with the probability” of a Trump presidency, according to Bernstein analysts led by Gautam Chhugani.
Bitcoin has surged about 10% to nearly $65,000 since Saturday’s failed attempt on Trump’s life, which subsequently increased his likelihood of winning November’s presidential election. according to to betting markets, which are an imperfect real-time proxy for voter shifts, although majority Recent polls also suggest that Trump has a slight lead over Biden.
Bitcoin will remain “sensitive” to the election, predicted Chhugani, who has a highly optimistic price target of $200,000 for bitcoin by the end of 2025.
Chhugani, who noted that the Biden administration’s “strong regulatory crackdown on cryptocurrencies and Trump’s pro-Bitcoin statements” are fueling bitcoin optimism, is the latest analyst to view another Trump presidency as a tailwind for cryptocurrencies, joining Standard Chartered analyst Geoffrey Kendrick, who foreseen Bitcoin could surge to $150,000 in the event of a Trump victory, and Conotoxia analyst Grzegorz Dróżdż said he said this would have a “positive impact” on cryptocurrencies broadly.
Among the reasons Trump is seen as more pro-crypto is his support for home bitcoin mining, the energy-intensive process of extracting new bitcoins from the digital blockchain that Biden has proposed charging a significant tax on, and its opposition to digital currencies issued by central banks that could threaten the value of existing digital tokens such as bitcoin.
Monday’s nomination of longtime crypto ally Vance as Trump’s pick for vice president likely boosted Trump’s advance, as Vance owned at least $100,000 worth of bitcoin in his last financial disclosure and has repeatedly praised any less regulation of the sector.
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Main context
Prior to this election cycle, Trump has repeatedly attacked bitcoin and promoted more regulation. “I am not a fan of Bitcoin and other Cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air,” and “Unregulated Crypto Assets can facilitate illegal behavior,” Trump he wrote on X in 2019. Other reviews included saying Bitcoin “looks like a scam” in 2021. Trump soon changed his mind about cryptocurrencies, selling millions of dollars worth of its own branded non-fungible tokens (NFTs) starting in 2022, and its campaign has begun accepting cryptocurrency donations, bringing $1.8 million in bitcoin contributions during Q2 2024, declaring he is “very positive and open-minded towards cryptocurrency companies and all things related to this new and growing industry” in May. Several notable figures in the cryptocurrency industry have supported Trump, including billionaire twins Cameron and Tyler Winklevoss, who regretted that Biden “openly declared war on cryptocurrencies” in his June pledge to donate $1 million each in bitcoin to Trump’s election efforts.
Against
Despite the crypto market’s apparent support for a presidential regime change, there have been several big wins for bitcoin under Biden. Since Election Day 2020, bitcoin has surged nearly 400%, jumping from roughly under $14,000 to nearly $64,000. Most crucially, Biden-appointed financial regulators approved the first spot bitcoin exchange-traded funds in January, sparking billions of dollars in institutional investment in bitcoin. Much of the crypto community’s criticism of the Biden administration has focused on Securities and Exchange Commission Chairman Gary Gensler, who has often been critical of space. Part of Gensler’s regulatory crackdown includes unearthing bad actors like the failed cryptocurrency exchange FTX, whose founder Sam Bankman-Fried is in the middle a 25-year prison sentence and the Federal Bureau of Investigation found Americans lost an estimated $3.94 billion to cryptocurrency investment fraud schemes in 2023, a 53% increase from the previous year.