A Trump administration could be the turning point for crypto: expert

Trump’s recent appearance in an interview with Elon Musk was expected to be one of the biggest crypto-related discussions in 2024.

Given Trump’s recent overtures to the crypto space—ranging from public endorsements to campaign promises—the hopes were high. Polymarket odds suggested a 65% likelihood that Trump would use the term “crypto” during the discussion, mirroring the community’s optimism. 

Yet, the conversation unfolded with no mention of cryptocurrency—a surprising omission that echoed a similar silence during the first presidential debate in late June. 

Trump’s silence leaves room for interpretation. Could it have been a calculated effort to avoid controversy as the election nears, or might it indicate a shift in his focus?

Against this backdrop, the former president’s ambitious promises have left the crypto community largely skeptical. While a few hope that Trump’s rhetoric signals genuine support, others, like former D.C. insider Moe Vela, advise caution, suggesting Trump’s promises should be taken “with a grain of salt.”

However, Kadan Stadlemann, Komodo’s CTO and project lead, brings a different viewpoint to the table. According to him, Trump’s pro-crypto stance could have a profound impact on the industry on the regulatory front, potentially igniting the next bull run.

In an interview with crypto.news, Stadlemann explored the implications of a potential Trump presidency.

Do you think Trump’s support for cryptocurrencies is genuine?

Donald Trump’s relationship with cryptocurrencies is evolving. Prior to this election cycle, he expressed skepticism and even hostility towards Bitcoin (BTC) and other cryptocurrencies, calling them volatile and unregulated.

Political figures often adjust their positions based on emerging trends and voter interests, so it is plausible that Trump’s support is aimed at broadening his appeal to a new demographic of younger, tech-savvy voters.

It’s important to consider that his support might also be influenced by advisors or business interests that see potential in the cryptocurrency market. Ultimately, regardless of whether his support is genuine or more strategic, it reflects that he recognizes the growing importance of cryptocurrencies in the US economic and political landscape.

What changes in cryptocurrency policies and regulations can the industry expect under a Trump administration?

If Trump were to become the 47th US President, his administration’s approach to cryptocurrency regulations would likely focus on supporting tech innovation rather than deterring it as the Biden administration has. Trump’s pro-business stance could lead to policies that promote the growth of the cryptocurrency industry jobs by incentivizing investment and development within the United States. We can expect this to include reduced regulatory barriers and clearer guidelines for cryptocurrency companies.

Given the industry’s susceptibility to scams and market manipulation, Trump’s policies might also place an emphasis on implementing measures to prevent fraud and protect investors. It’s possible that Trump’s policies could aim to establish favorable tax treatments for crypto businesses and encourage collaboration with international partners to create a coherent global regulatory framework. 

Nonetheless, the extent of these changes would depend on the administration’s ability to navigate political opposition from Democrats and build consensus among lawmakers and regulatory agencies.

Trump claims that his Bitcoin accumulation strategy could help ease the US debt in the near future; how sound is this logic?

The idea of using Bitcoin to mitigate debt assumes that the asset will increase in value over time. It also assumes that the US government will decrease deficit spending. The scale of the US national debt, which recently passed $35 trillion, far exceeds the current market capitalization of Bitcoin. Even if the government were to accumulate significant Bitcoin reserves, the impact on the overall debt would likely be marginal unless Bitcoin’s value appreciates substantially. 

While cryptocurrency investments could potentially contribute to diversification and long-term asset growth, effective debt management requires a multifaceted approach that must include sound fiscal policies, economic growth, and responsible budgeting.

How do you expect his pro-crypto stance to impact the market in the immediate future and over the long run?

In the immediate future, Trump’s pro-crypto stance could lead to increased optimism in the market, with investors anticipating a more favorable regulatory environment that encourages the adoption of cryptocurrencies. This sentiment could lead to a surge in investment, driving up prices and market activity. However, the market’s response will also depend on various factors, including broader macroeconomic conditions, technological advancements, and the actions of other governments.

In the long run, if Trump’s policies successfully create a supportive ecosystem for cryptocurrencies, it could lead to broader acceptance and integration of digital assets into mainstream financial systems. Ultimately, we could also see major adoption of DeFi applications such as DEXs. We’re also likely to see a massive amount of new institutional investors, who might be more inclined to enter the space if they perceive a stable and supportive regulatory environment under Trump’s leadership.

Do you think Trump’s crypto advocacy can influence other presidential candidates or lawmakers to reconsider their positions on cryptocurrencies?

Trump’s advocacy for cryptocurrencies could potentially influence other presidential candidates and lawmakers to reevaluate their positions, especially if his stance resonates with voters and garners substantial support.

As cryptocurrencies continue to gain prominence in the financial sector, politicians may recognize the need to address the issue to remain relevant and appeal to a diverse electorate. He could encourage bipartisan efforts to establish a comprehensive regulatory framework that supports crypto innovation. However, the extent of Trump’s influence would depend on various factors, including the prevailing political climate and the stance of other influential political leaders.

Lastly, could a Trump presidency spark the next bull run?

A Trump presidency has a high probability of sparking the next bull run. To sustain a long-term bull run, a supportive regulatory environment under Trump would need to be accompanied by a surge of institutional adoption of blockchain technology and cryptocurrency.

A pro-crypto stance from the U.S. could influence other countries to adopt similar policies, creating a more favorable global environment for cryptocurrencies. This international alignment might reduce regulatory uncertainty, boosting market growth. With that being said, it’s crucial to understand that market dynamics are influenced by various factors, including macroeconomic conditions, geopolitical trends, and regulatory developments worldwide.