Trump's Pivot to Crypto

Regardless of the outcome of this week’s U.S. presidential election, former President Donald Trump’s pivot from crypto skeptic to cheerleader has significantly affected the cryptocurrency industry.

His embrace of the community has pushed bitcoin's price toward a new all-time high, bringing hundreds of millions of dollars into prediction markets and memecoins. In the battle between Republican candidate Donald Trump and Vice President Kamala Harris, the decentralized prediction platform Polymarket has generated over $3 billion in total betting volume on the winner alone.

“Trump’s presidency historically drives stronger bullish sentiment than Harris is likely to,” said Georgi Koreli, founder and CEO of Hinkal. “U.S. blockchain and crypto projects face scrutiny, deterring some from the market. With Harris as a Democrat, investors may be cautious, but both candidates’ likely policies on money supply expansion are expected to favor crypto adoption.”

Trump’s Crypto Pivot

Trump's stance on cryptocurrency changed in May when his campaign began accepting crypto donations—the first major U.S. presidential nominee to do so.

In June, Trump met with bitcoin mining executives, suggesting bitcoin mining could be the “last line of defense against” a central bank digital currency. He later chose Sen. JD Vance (R-Ohio) as his running mate in July; Vance is known for his favorable views on crypto.

In August, Trump announced that Cantor Fitzgerald’s Howard Lutnick would lead his transition team if elected again, further emphasizing his crypto-friendly stance. Trump also made headlines when he purchased bitcoin and promoted Bitcoin-themed sneakers.

His impactful moment occurred on July 27 during a keynote speech at Bitcoin 2024 in Nashville, where he promised to end anti-crypto policies and replace SEC Chair Gensler if elected. “It will be the policy of my administration…to keep 100% of all bitcoin the US government currently holds,” he stated.

Trump's Impact on Bitcoin and Crypto Markets

Trump’s embrace of crypto has led to the “Trump trade” narrative that a Trump win will increase bitcoin and cryptocurrency values.

The favorable Q4 seasonality combined with this narrative presents an exciting opportunity for bitcoin despite potential price volatility leading into the election, according to Bitfinex analysts.

CoinShares reported that global crypto funds registered inflows of $2.18 billion last week, indicating investor excitement about a potential Republican victory.

Analysts at Bernstein project bitcoin could break all-time highs and reach $80,000 to $90,000 if Trump wins before the inauguration on Jan. 20, 2025.

MAGA, Musk, and Memecoins

Numerous memecoins have emerged capitalizing on Trump’s popularity, such as MAGA (TRUMP) and Doland Tremp (TREMP). MAGA launched in September 2023 with a market cap of $166 million, peaking at over $17 in June.

The total PolitiFi market cap, composed of political-themed memecoins, sits at $691 million. The original memecoin, Dogecoin, has also gained from Trump’s campaign efforts.

Bitwise CIO Matt Hougan believes the influence of credible supporters in crypto is beneficial for the industry.

Trump Promotes World Liberty Financial

Trump’s direct entry into crypto came through the DeFi project World Liberty Financial, where he serves as the “chief crypto advocate.” Despite initial hype, the project’s public token sale generated just $10 million on the first day.

“Utility matters in DeFi,” Hougan noted, indicating that personality-driven DeFi projects often struggle.

What’s Next?

While Kamala Harris hasn't prioritized courting the crypto industry, experts believe it may not significantly impact the market.

“Bitcoin doesn’t need Washington to succeed,” Hougan argued, emphasizing rising institutional adoption irrespective of the election outcome.

Analysis from VanEck suggests that ongoing fiscal deficits and national debt will likely weaken the U.S. dollar, a scenario in which Bitcoin historically thrives.

Regardless of the presidential outcome, pro-crypto advocacy is expected to inflate in Congress, according to Alison Mangiero, executive director of Proof of Stake Alliance. “We will have the most pro-crypto Congress we've ever had,” she stated, asserting that the real work in education and advocacy is just beginning.