In a significant shift from his earlier criticism, former President Donald Trump has recently taken a more favorable stance about cryptocurrencies. If he returns to office, this change could have a significant impact on the cryptocurrency industry. After previously labeling digital currencies as a threat to the US dollar and dismissing their volatility, Trump has now recognized their potential benefits. His new stance was highlighted in recent public speeches, where he discussed the innovation and opportunities that digital currencies can bring to the financial system. The change of heart has been remarkable since Trump spoke at a Bitcoin conference in Nashville, TN last week.
Should Trump re-enter the White House, the cryptocurrency industry could enjoy a more supportive regulatory environment. This may include policies aimed at promoting innovation while implementing safeguards against fraud and abuse. Such a shift would encourage further investment in blockchain technology and digital assets, potentially strengthening the United States' position in the global cryptocurrency market. Many billionaires are donating to Trump's campaign, in what Mark Cuban calls 'The Bitcoin Play'.
Trump's adoption of cryptocurrencies could also lead to the development of a clear regulatory framework that provides stability and predictability for businesses and investors. This could help further legitimize cryptocurrencies, integrating them more deeply into the mainstream financial system.
Additionally, Trump has acknowledged the sector's potential for job creation and economic growth. His administration could pursue policies that promote the expansion of the crypto industry, including initiatives to attract crypto-related businesses and talent to the United States, thus increasing the nation's competitive edge in this fast-growing sector.
Furthering this positive outlook is JD Vance, Trump's newly chosen Vice President, who is known for his pro-Bitcoin and pro-cryptocurrency stance. Vance, a vocal advocate of Bitcoin and blockchain technology, has highlighted their potential to democratize finance and challenge traditional banking systems. His views align with the growing belief that cryptocurrencies can increase financial inclusion and spur innovation. With Vance's support, the Trump administration can deepen its commitment to creating an environment conducive to the growth and development of the cryptocurrency industry.
Spot bitcoin and ethereum ETFs mixed earlier in the week to absorb digital investments buoyed by Republican presidential candidate Donald Trump's pro-crypto comments over the weekend, as macroeconomic uncertainties, including the timing of the US central bank's interest rate cuts.
BlackRock Bitcoin Trust (IBIT), Grayscale Bitcoin Trust (GBTC), and Fidelity Vice Origin Fund (FBTC) — the three largest bitcoin-based funds by assets under management — were down at least one percent in midday trading on Monday.
However, those issuers' six-day-old Ethereum funds rose yesterday, dovetailing with their respective underlying assets.
Bitcoin was down about one percentage point in the past 24 hours, while Ether, the Ethereum blockchain's token, rose about 1.5%.
Both assets jumped over the weekend after Trump told about 3,000 crypto enthusiasts at a bitcoin conference in Nashville that he would create a "strategic national bitcoin reserve." The former president also said he would welcome SEC Chair and crypto skeptic Gary Gensler.
"I didn't know he was so unpopular," Trump quipped about Gensler, whose concerns about fraud and investor protection have rankled the crypto industry.
The Federal Reserve begins its August two-day meeting today but is not expected to cut interest rates until at least September. Some market watchers, who fear the economy is headed for recession, have sharply criticized the Fed's inaction this summer.
Spot Bitcoin vs Ethereum ETF Flow
Spot bitcoin ETFs began trading on Jan. 11, a day after the SEC ended a nearly decade-long rejection saga, generating inflows of more than $120 million over the past three trading days, according to UK asset manager Farside Investors. Represents a cooldown from early July when the fund received more than $3 billion in net outflows over a roughly three-week period.
Nine Ethereum funds, which received much-anticipated SEC approval on July 22, lost nearly $341 million in outflows in their four full trading days. That total was skewed by an outflow of about $1.5 billion from the Grayscale Ethereum Trust (ETHE), a conversion from an existing trust that charges a 2.5% fee, the highest in the group.
"While we expect an eventual breakout, bitcoin will need 'macro' support in the form of a possible Fed rate cut or another dose of low inflation," crypto-focused 10X Research wrote in a note on Monday.
However, those issuers' six-day-old Ethereum funds rose yesterday, dovetailing with their respective underlying assets.
ReplyDelete