From: allin
Since the Trump election victory, Bitcoin and the broader cryptocurrency market have experienced a significant bull run, with various related companies seeing substantial gains [08:02:02].
Market Performance Post-Election
Within ten days of the Trump election victory, Bitcoin peaked at 89,000 [08:09:41]. Since early August, companies like Robinhood, PayPal, and Coinbase have seen their stock prices rise by double-digits or even 50% [08:29:28]. This market reaction is attributed to the outlook based on Trump’s election [10:49:10].
The market views some of Trump’s policies as stimulatory, driven by anticipated lower tax rates and increased deregulation [10:59:09]. This deregulatory environment is expected to particularly benefit markets like crypto, finance, and fintech, enabling them to launch products and generate revenue more easily than under previous regulatory schemas [11:10:42].
Trump’s Pro-Crypto Stance
During his campaign, Trump actively courted the crypto industry [08:22:20]. Key promises included:
- Firing Gary Gensler: At a Bitcoin conference in July, Trump stated he would “fire Gary Gensler and appoint a new SEC chairman” on day one of his presidency [08:41:20]. While a president cannot directly fire the SEC chair, they can appoint a new one when the term ends in 2026, or the incumbent may resign [09:28:10]. Speculation arose that Gensler might step down, given a press release where he stated it was “a great honor to serve” [09:41:10].
- No Sale of Bitcoin Holdings: Trump pledged that the federal government would “never, never ever sell its Bitcoin holdings,” which are acquired through criminal asset forfeitures [09:59:00].
- Bitcoin and Crypto Presidential Advisory Council: He proposed creating such a council, stating that “the rules will be written by people who love your industry, not hate your industry” [10:11:53].
- Minting Bitcoin in America: Trump advocated for all future Bitcoins to be minted in America, though the feasibility of this choice is questioned [10:24:25].
Regulatory Outlook
The House Republicans already passed a framework for crypto regulation earlier in the year, known as the Financial Innovation and Technology for the 21st Century (FIT21) Act [19:23:44]. This bill would classify digital assets as commodities regulated by the CFTC if their underlying blockchain is “functional and decentralized” [19:37:05]. If a blockchain is functional but not decentralized, the assets would be considered securities under the SEC’s purview [19:50:00]. The crypto industry desires a clear distinction between commodities and securities, preferring CFTC regulation for commodities [19:57:33].
With Republicans now controlling the Senate, the prospects for FIT21, or similar legislation, are greatly improved [20:11:25]. This, combined with the uncertainty surrounding the SEC Chair’s tenure, suggests that the “days of Gensler terrorizing crypto companies by issuing Wells notices without clarifying what the rules are” may be over [20:33:04]. This expectation of clear rules is a key driver for the rallying crypto markets [20:58:39].
Bitcoin as an Asset Class
Currently, Bitcoin is largely viewed as a dollar-denominated asset and acts as a “very good gold proxy” [15:58:52]. Its price is “totally correlated” with other risk assets, meaning it tends to perform well when there’s optimism about the economy [16:19:15]. While some purists believe Bitcoin will eventually become an independent, non-speculative store of value, that day is not yet here [16:26:00].
The broader market optimism, driven by the Trump Administration’s projected policies, is leading to risk-seeking behavior and a “crushing” of risk spreads [17:55:00]. This positive sentiment, particularly concerning deregulation and potentially lower taxes, is expected to accelerate earnings for some businesses, leading investors to accept higher multiples today [26:50:00].
Broader Economic Implications
The Trump Administration is expected to end an era of “deceleration of regulatory capture and lawfare,” benefiting equities previously restrained by such pressures [34:00:20]. This is seen as a “disruptive force” aimed at testing federal agencies and bureaucratic systems, potentially making the government “stronger,” “harder,” and “more resilient” [14:50:00].
The overall sentiment is that the U.S. is on an unsustainable fiscal path, and shaking up the bureaucracy carries more upside than downside [17:09:00]. The biggest risk is perceived as inertia, leading to potential bankruptcy rather than the disruption itself [18:49:00].
Poly Market FBI Raid
The FBI raid on Poly Market CEO Shane Copeland’s home, eight days after the election, has been interpreted by Poly Market as “political retribution” [59:16:00]. Poly Market was investigated for allegedly accepting trades from US-based users, despite having settled a case with the CFTC in 2022 and taking measures to block US traders [58:28:00]. The timing of the raid, after the election, suggests the FBI avoided acting beforehand to prevent accusations of political interference [01:00:41].
The incident raises questions, with theories ranging from illegal domestic wagering (though a recent court ruling made it legal) to wash trading [01:02:02]. A more controversial theory suggests a potential manipulation of prediction markets on behalf of the Kamala Harris campaign to feed a media narrative of a late surge for Harris [01:03:31]. However, there is no evidence to support this [01:04:50].