The outcome of the November 5th presidential election has sent shockwaves throughout the crypto community. With Donald Trump’s second White House win, market observers are predicting a significant shift in the regulatory landscape for digital assets. In this article, we’ll explore how a second Trump administration could impact the crypto sector, both in the United States and globally.
A Lighter Stance on Regulation
Boris Bohrer-Bilowitzki, CEO at Concordium, a layer-1 blockchain with offices in the UK and Europe, believes that Trump’s win will lead to a lighter stance on regulation. "I expect that he will do this by taking a lighter stance on the regulation of crypto, ensuring that bureaucratic policies do not slow down the progress of America’s crypto and digital assets companies." This shift in approach could lead to increased growth and adoption of digital assets.
Market Structure Legislation
Chiente Hsu, co-founder of ALEXGO, a Bitcoin bridge, is optimistic about the potential for market structure legislation. "The next 4 to 6 years could be highly favorable for the digital assets sector… We could see clearer regulations around staking and other forms of proof-of-stake, which would enable asset managers to safely incorporate staking into their ETH ETFs."
Stablecoin Legislation
The odds were already improving for enabling stablecoin legislation before the election. Stablecoins are easier for legislators to get their arms around than other crypto: It’s fairly clear what needs to be done, and stablecoins are also believed to be supportive of the US dollar.
The Importance of the United States
While some may argue that the US is just one country among 151 countries ranked by Chainalysis in a recent crypto adoption survey, Carol Alexander, professor of finance at the UK’s University of Sussex, believes that the US continues to be by far the most important influence on crypto trading. "The US continues to be by far the most important influence on crypto trading… This is seen in crypto’s time-of-day trading patterns, which are similar to traditional markets, like equities."
A Bull Run Ahead?
Alexander expects the price of Bitcoin, along with Ether and some other established altcoins, to rise even further now, at least until early next year. "This bull run will increase adoption by retail investors especially, but also institutions." However, she warns that this growth may be on the back of failing regulations – huge hidden risks will be swept under the carpet as the SEC ceases to take civil actions against unregulated exchanges.
A New Era for Crypto?
While some are optimistic about a second Trump administration’s impact on the crypto sector, others are more skeptical. "The challenge may come from more conservative Republican politicians who are skeptical of crypto and see it as a threat to traditional financial institutions," said Bohrer-Bilowitzki.
The Rule of Law
Massad emphasized that whatever happens, the rule of law has to be respected. "That’s of critical importance for every business, and also for the crypto industry." This is a crucial reminder that even in uncertain times, regulatory bodies must prioritize the protection of investors and maintain transparency.
Conclusion
A second Trump administration could bring significant changes to the crypto sector, both in terms of regulation and market trends. While some are optimistic about the potential for growth and adoption, others are more skeptical about the impact on small investors and the lack of clear regulations. As we move forward into this new era for crypto, it’s essential that regulators prioritize the protection of investors and maintain transparency.
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Note: This article is for informational purposes only and should not be considered as investment advice.
