Table of Contents
Post-Election Crypto Impact
The U.S. 2024 elections had a profound impact on the crypto-asset market, with significant price action driven by Donald Trump’s election victory. Bitcoin soared to a record-breaking all time high of $103,587, while the overall crypto market capitalisation surged back to $3 trillion. This post-election crypto impact highlighted the market’s sensitivity to political developments and the potential for policy changes to shape its trajectory.
🔥 JUST IN: #Bitcoin is back above $100,000! pic.twitter.com/jIy4hJ5a4g
— Cointelegraph (@Cointelegraph) December 6, 2024
In particular, the market’s response was fuelled by a combination of Mr. Trump’s pre-election promises and subsequent post-election policy directions, which signalled a potential shift toward legitimising and integrating crypto-assets into the broader financial system – a trend already gradually unfolding in other jurisdictions.
Mr. Trump’s campaign effectively resonated with a younger generation that has integrated digital assets into their financial strategies, as well as with prominent technology leaders in the crypto space. The resonance of the campaign’s nuanced approach further exemplified how the post-election crypto impact could be shaped by targeted messaging and policy alignment.
Notably, discussions around critical issues such as regulatory clarity and the societal integration of blockchain technology were particularly well-received – positions that the crypto community viewed as highly favourable.
Bitcoin Reserve & Advisory Council
In the lead-up to the election, Mr. Trump gained significant support from the crypto community by headlining the Bitcoin 2024 Conference in Nashville, Tennessee, where the creation of a United States Bitcoin reserve was proposed.
This idea was later formalised by Wyoming Republican Senator Cynthia Lummis through the introduction of the “Bitcoin Act”. The proposed legislation outlined plans to establish a strategic Bitcoin reserve aimed at bolstering the U.S. dollar and addressing national debt. Specifically, it suggested a phased program to purchase one million Bitcoins, representing approximately 5% of the total Bitcoin supply, aligning the reserve’s scale with the nation’s existing gold holdings.
Indeed, the U.S. government already holds a substantial amount of Bitcoin, part of a larger trove of crypto-assets valued at approximately $20 billion. These assets were primarily acquired through federal law enforcement efforts, including criminal investigations and asset seizures. Mr. Trump has similarly advocated against selling these holdings, emphasising their potential strategic value.
Explained: 🇺🇸 The Strategic Bitcoin Reserve
Breaking down the BITCOIN act — the bill introduced by Senator @CynthiaMLummis
– Buy 1m BTC over five years
– HODL for 20 years
– Proof of Reserves
– Protect Bitcoin property rightsTL;DR: 🚀🚀🚀 pic.twitter.com/snnWP59FBc
— Julian Fahrer (@Julian__Fahrer) November 19, 2024
Similarly, Mr. Trump has pledged to establish a crypto advisory council to provide input on his planned overhaul of U.S. policy. The team is currently deliberating on the structure and staffing of the council, as well as determining which companies should be involved. There is speculation that this council could operate under the White House’s National Economic Council, which is responsible for coordinating and implementing the President’s economic policies.
Ross Ulbricht Release
On the campaign trail, Mr. Trump also pledged to release Ross Ulbricht from prison, a move that garnered attention within the crypto-asset community. Mr. Ulbricht, the founder and administrator of the Silk Road marketplace, played a controversial role in the early days of Bitcoin adoption. Silk Road operated on the dark web, enabling transactions in Bitcoin for various goods and services, including illegal narcotics.
In 2015, Mr. Ulbricht was convicted on seven charges, including money laundering, computer hacking, and drug trafficking, and was sentenced to life in prison without parole. This case has since become a flashpoint in discussions about overreach in sentencing within the crypto space, with critics arguing that Mr. Ulbricht’s sentence was disproportionate and inconsistent with the sentences handed down to individuals involved in more recent crypto-related crimes.
For example, former FTX CEO Sam Bankman-Fried received a 25-year sentence, including three years of supervised release, prompting comparisons between the severity of Mr. Ulbricht’s punishment and those of more recent offenders involved in crimes of similar impact within the industry.
Gary Gensler & CFTC
Mr. Trump also promised to fire Gary Gensler, the current Chairman of the U.S. Securities and Exchange Commission (SEC), who has overseen more than 100 actions against crypto firms during his tenure. Mr. Gensler has argued that much of the crypto-assets industry falls under the SEC’s jurisdiction, with lawsuits aimed at bringing the sector into compliance. However, crypto firms contend that these legal battles have failed to provide the regulatory clarity the industry desperately needs. Instead, they view the actions as a gross overreach by the SEC.
Indeed, the regulatory uncertainty created by these actions became a defining factor in the post-election crypto impact, with industry leaders expressing optimism about potential reforms under the Trump administration. In particular, there is growing speculation that the Commodity Futures Trading Commission (CFTC) may take over regulatory oversight of crypto-assets, significantly diminishing the SEC’s authority. Interestingly, although Mr. Trump would not have the power to necessarily fire Mr. Gensler, as even an appointment of a new chairman would mean that Mr. Gensler would remain a commissioner of the SEC, the current SEC Chair has since stepped down from his role following Mr. Trump’s election victory and announced he would be departing from the agency entirely.
On January 20, 2025 I will be stepping down as @SECGov Chair.
A thread 🧵⬇️
— Gary Gensler (@GaryGensler) November 21, 2024
It has also been reported that Mr. Trump’s administration is considering placing the CFTC in charge of overseeing the crypto-assets industry, a move that would significantly reduce the regulatory authority of the SEC. This potential shift has been welcomed by the crypto community, which views the CFTC as a more balanced and fairer regulator, known for adopting a lighter touch in its oversight compared to the stricter enforcement approach of the SEC.
Political Elections & Appointments
The political U.S. landscape has similarly seen a notable shift toward crypto-asset advocacy following Mr. Trump’s recent election. With a slew of high-profile pro-crypto appointments and the election of numerous blockchain-friendly candidates to Congress, the industry appears poised for significant policy support at the federal level.
One of the most striking moves was Mr. Trump’s nomination of Scott Bessent, a hedge fund manager with a strong track record in crypto-asset investments, as Treasury Secretary. If approved by the Senate, Mr. Bessent’s appointment could signal a sea change in how the U.S. Treasury views digital assets, with many expecting a more favourable regulatory environment for crypto-assets.
In another notable nomination, Mr. Trump selected Matt Gaetz, a vocal advocate for Bitcoin, as Attorney General. As a former congressman, Mr. Gaetz has been a steadfast supporter of blockchain technology and crypto-assets, having previously proposed that the Internal Revenue Service (IRS) accept Bitcoin as a payment method for Americans filing their federal income taxes.
Similarly, Mr. Trump’s collaboration with Elon Musk to streamline government operations has attracted significant attention, especially given Mr. Musk’s well-known enthusiasm for Dogecoin and blockchain innovation. Notably, the establishment of the newly created Department of Government Efficiency (DOGE), tasked with reducing waste in U.S. government spending, has been viewed as both a nod to the Dogecoin crypto-asset and a positive development for the broader crypto industry.
The election of 298 pro-crypto members into the House of Representatives and Senate has likewise cemented a legislative landscape that is more inclined toward policies supporting innovation in blockchain technology. This growing alignment between Congress and the crypto industry represents a key post-election crypto impact, paving the way for new legislation that supports the adoption of crypto-assets and blockchain solutions.
Conclusion
The results of the November 5th elections and Donald Trump’s victory have undeniably galvanised the crypto-asset market and opened the door to potentially transformative changes in U.S. policy toward digital assets. The creation of a Bitcoin reserve, the potential restructuring of regulatory oversight, and the appointment of crypto-friendly leaders signal a profound shift in how the U.S. government might integrate crypto-assets into its economic and policy frameworks. These developments could accelerate innovation, promote greater financial inclusion, and position the United States as a leader in the global blockchain revolution.
However, the future remains uncertain. Implementing these ambitious proposals will involve complex political dynamics, regulatory hurdles, and economic realities. Whether these initiatives will materialise as intended – and if they do, whether they will achieve the desired outcomes without unintended consequences – remains to be seen. The next few years will be critical in determining whether this post-election crypto impact will become a lasting legacy or a momentary inflection point.
