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Cryptocurrencies gain popularity as Donald Trump’s political respect woos bitcoin enthusiasts
Cryptocurrency is enjoying a surge in popularity thanks to a new wave of political respect as former President Donald Trump is preparing to speak at a bitcoin conference this week in Nashville.
The price of bitcoin (BTC-USD) has risen more than 13% over the past month and surpassed $68,000 in the past 24 hours, putting the world’s largest cryptocurrency within reach of an all-time high set earlier this year.
This week, cryptocurrency investors anticipate several reasons to become more enthusiastic, including: The Securities and Exchange Commission (SEC) gives the green light to major Wall Street money managers to issue exchange-traded funds soon which retain the ether (ETH-USD), the world’s second largest cryptocurrency.
These ETFs could make ether a potential building block for 401(k)s, IRAs, and retirement plans and help the digital asset gain more mainstream acceptance. Many of these same fund managers already have ETFs that invest directly in bitcoin.
But the big event that has the crypto community most excited will take place this weekend when Trump speaks at the Bitcoin 2024 conference in Nashville.
The Republican presidential candidate’s seal of approval this year has many in the industry expecting a friendlier regulatory approach from Washington, D.C., in 2025 and beyond.
Trump and many in his party have embraced digital assets as they seek to draw contrast with the Biden administration, which has led a crackdown on many major players in the sector after the market crashed in 2022.
The GOP said in its 16-page platform last week that “Republicans will end the Democrats’ illegal and anti-American crackdown on cryptocurrencies.”
Trump, who has called bitcoin a “scam” in the past, called cryptocurrencies “incredible” in an interview with Bloomberg published last week.
Republican presidential candidate former President Donald Trump reacts after speaking at a campaign rally, Saturday, July 20, 2024, in Grand Rapids, Mich. (AP Photo/Evan Vucci) (ASSOCIATED PRESS)
“It’s more likely that a Trump administration will be more supportive of cryptocurrencies than the Democrats have been, I think that’s clear,” Ian Katz, managing director at Capital Alpha Partners, told Yahoo Finance.
“We believe the market has not priced in a positive change in the regulatory environment for cryptocurrencies, and we see significant room for institutional investors to allocate funds to cryptocurrencies and crypto stocks,” Bernstein analyst Guatam Chhugani added in a note Monday.
According to some observers, Trump’s economic policies could also contribute to the rise of digital assets in the years to come.
“What will drive the price of BTC up is lower tax rates and tariffs, which, if history is any guide (and it isn’t always), will be inflationary,” Dallas Mavericks owner and entrepreneur Mark Cuban said of X last week.
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Bitcoin is up more than 50% in 2024 so far, thanks to a series of developments that have led many in the industry to bet on higher prices.
They range from expectations of lower interest rates from the Federal Reserve to broader public acceptance of digital assets by some prominent Wall Street figures.
One such figure is BlackRock CEO Larry Fink, who said in a CNBC interview last week that bitcoin was a “hedge for optimism” and a “legitimate financial instrument.”
“I believe bitcoin has a role to play in portfolios,” Fink said.
Larry Fink, CEO of BlackRock. REUTERS/David “Dee” Delgado (REUTERS / Reuters)
BlackRock was among the companies that received approval in January to begin issuing a spot Bitcoin ETF, which proved to be a major boon for its first half of the year. Its iShares Bitcoin ETF (I BITE) recorded net inflows of $18 billion in its first six months.
The company is also expected to be among the fund managers that will get SEC approval this week to launch the first regulated ether ETFs in the U.S. The SEC has already authorized exchanges to list such products.
Bitcoin was created in the wake of the 2008 financial crisis as a new type of currency beyond the reach of governments. Some financial market participants therefore view it as a kind of digital gold, or even a safe haven, even as cryptocurrencies have moved closer to volatile tech stocks in recent years.
Investors have indeed flocked to bitcoin during periods of sudden changes in the monetary order, such as the outbreak of war between Russia and Ukraine, when the United States and its allies began imposing a number of sanctions on Russia.
The next chance for this to happen is when the Fed begins lowering interest rates, which investors expect to happen as early as September.
“Bitcoin hasn’t had a chance to really shine as a safe haven asset,” said Joel Kruger, market strategist at London-based currency and cryptocurrency trading platform LMAX.
“It’s all been built around what’s been happening in the US stock market for years now and I think there’s going to be a rotation. Usually what triggers that is [interest] “Rates are changing.”
David Hollerith is a senior reporter for Yahoo Finance covering banking, crypto, and other areas of finance.
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