What's next for the crypto industry following Donald Trump's election victory?

With the uncertainty of the U.S. presidential election race now out of the way, what’s next for the crypto industry following Donald Trump’s victory?

Trump’s newfound pro-crypto stance adopted in this year’s campaign involved making a series of pledges to the industry as crypto policy became a serious election issue for the first time. His promises included dismissing Securities and Exchange Commission Chair Gary Gensler and commuting Silk Road founder Ross Ulbricht's life sentence "on day one," establishing a Crypto Presidential Advisory Council, repealing SAB 121 , ending “ Operation Choke Point 2.0 ,” turning the U.S. into a bitcoin mining “powerhouse” and creating a national strategic bitcoin reserve .

Amid a likely Republican sweep of the presidency, Senate and House of Representatives, optimism is growing in the crypto community that these pledges will be implemented swiftly.

A new SEC Chair

The SEC has played a key role in crypto regulation during the current Biden administration, with Gensler asserting that most cryptocurrencies are securities and urging entities to register under existing rules. The agency has embarked on several legal battles with key industry players, including Coinbase, Binance, Kraken and Robinhood, as well as against DeFi, NFT and stablecoin projects.

Gensler could decide to stay on at the SEC as a Commissioner under the Trump administration, though sources have said it is likely he will step down.

As for who may take over as Chair, many have speculated Trump could appoint Republican SEC Commissioner Hester Peirce, aka “Crypto Mom,” who has been consistently critical of many of the regulator's various enforcement actions in the space and lack of approval for spot crypto exchange-traded products until legal action was taken against the agency. However, Peirce has previously said she wouldn’t be interested in the position, leaving the only other Republican Commissioner, Mark Uyeda, who has also been friendly to crypto, as a prime candidate. Alternatively, Trump could nominate a new Commissioner, with names like former CFTC Chair Chris Giancarlo being floated, according to analysts at trading and financial services firm Presto.

Variant Fund Chief Legal Officer Jake Chervinsky described the odds of Peirce becoming Chair as low simply because she apparently doesn’t want the job. “I’d give decent odds to Uyeda, although I expect Trump may prefer to bring in someone new of his own,” he said. “Being Chair is a pretty hard, thankless, miserable job, to be honest. Some commissioners might want it (Uyeda) but others might feel they’ve done their time and are ready to move on to greener pastures.”

However, with two and a half months until Trump takes office and crypto policy can shift as new leaders take over the federal agencies, Chervinsky warned that, between now and then, the outgoing administration may be “busy finalizing rules and filing enforcement actions.”

“The top crypto policy priority for Trump must be ending Biden's attempt to destroy the industry via regulation by enforcement. This means dropping the SEC's unjustified enforcement actions and the DOJ's Tornado Cash prosecution,” he said .

Crypto-friendly regulation

Advancing the Bitcoin Act is another of the most anticipated developments under the Trump administration — establishing bitcoin as a strategic reserve asset — with the U.S. government acquiring up to 5% of bitcoin’s total 21 million supply. The “Boosting Innovation, Technology, and Competitiveness through Optimized Investment Nationwide Act of 2024” draft bill or shorthand, the "BITCOIN Act of 2024," was put forward by Wyoming’s Republican Senator Cynthia Lummis in July.

Following the election results, with Donald Trump winning the presidency, the Republicans taking back control of the Senate, and likely to retain control of the House, Lummis took to X to post : “We are going to build a strategic bitcoin reserve.”

“If the GOP achieves a trifecta, many crypto-related bills in Congress, including Lummis’ Bitcoin Strategic Reserve Bill, would stand a better chance of passing,” Presto analysts Peter Chung and Min Jung explained.

When the plan was announced at the Bitcoin 2024 conference in Nashville this summer, Ikigai CIO Travis Kling said he thought it was pretty unlikely. “Just felt like a bridge too far. Almost like it was too bullish to believe. With a red wave, the likelihood of this has drastically increased. If it does, legit WAGMI.”

CoinShares Head of Research James Butterfill wrote on Wednesday that such a move would position bitcoin like gold, granting it a place in the national reserve and marking a historic step toward legitimacy. “If implemented, the Bitcoin Act could drive considerable institutional and governmental interest in bitcoin, potentially accelerating its growth and pushing its value to new heights,” he said.

According to analysts at research and brokerage firm Bernstein, Trump's victory has shifted crypto's regulatory environment from a headwind to a tailwind more generally, with expectations of a more crypto-friendly Senate Banking Committee, too. This means faster progress on other crypto legislation, especially around stablecoin and market structure bills, benefiting U.S. exchanges and stablecoin issuers like Circle and Paxos, they said.

Among Trump’s other policy pledges, the end of “Operation Choke Point 2.0,” which restricted crypto’s ability to access the traditional banking system, according to Bitwise CIO Matt Hougan, and a potential repeal of the controversial Securities and Exchange Commission bulletin, SAB 121 , would pave the way for traditional banks to take on more crypto firms as clients, and enable them to own and custody bitcoin themselves.

However, one unchanged factor post-election is the U.S. deficit of $36 trillion, rising $1 trillion every 100 days, Hougan noted. The Congressional Budget Office expects this trend to persist under Trump's policies, possibly worsening, with likely Fed rate cuts and uncertain economic conditions meaning bitcoin becomes a "must-have" asset for investors, he said.

Bitcoin mining incentives and freeing Ross

Incentives for U.S.-based bitcoin miners could also expand the already increasing dominance and consolidation of publicly traded operators in the country, potentially impacting the current trend of diversification into AI data center hosting amid a challenging environment for the sector post-halving .

Finally, one of Trump’s most popular promises, across the crypto community and beyond, could see the release of Ross Ulbricht post-inauguration. Ulbricht is currently serving a life sentence without the possibility of parole for his role in creating and operating the dark web marketplace Silk Road , a site integrally tied to Bitcoin's early history. 

OG bitcoiner Amir Taaki was swift to remind the president-elect of his pledge to commute Ulbricht's sentence on Wednesday, urging his prompt release. “I owe everything to Ross Ulbricht. Crypto changed my life. Crypto became big because of him. He made the ultimate sacrifice. We all benefited from his work,” Taaki said .

Market impact

Trump’s proposed appointment of billionaire supporter Elon Musk to lead a new “Department of Government Efficiency,” tasked with cutting federal expenditures by approximately $2 trillion, means a looser monetary policy trajectory is likely to be pursued to balance this, CoinShares’ Butterfill argued. Historically, easy monetary policy and fiscal conservatism have benefited bitcoin, enhancing its appeal as a hedge against currency debasement and inflation and drawing investors seeking protection from traditional economic risks, he said.

“Trump’s election presents a strong bullish case, with expectations that incoming rate cuts and global stimulus will further lift the economy and support bitcoin’s performance. Although Trump will only be inaugurated in January, we anticipate bitcoin will stay strong through year-end,” BRN analyst Valentin Fournier said. “Ethereum has seen a 20% increase in the last three days, closing the gap somewhat after a period of underperformance relative to bitcoin. However, we believe this rally is temporary, with bitcoin likely to maintain its lead in the coming weeks.

Bitcoin is currently trading for $74,967, according to The Block’s Price Page , up 1.7% over the past 24 hours and 77.4% year-to-date. In contrast, Ethereum is changing hands for $2,818, having gained 7.6% in the last 24 hours. However, it has underperformed compared to other crypto assets this year with a 23.7% gain in 2024.

“With Trump re-elected as president, the initial response may involve sidelined funds entering the market out of fear, driving the BTC price to new highs,” Bitget Research chief analyst Ryan Lee said. “The BTC ETF may see net inflows in the coming trading days, indicating that Wall Street institutions are optimistic about the market’s outlook. The long-to-short ratio of accounts in the futures market is below 1, suggesting that institutional investors in the crypto market are taking long positions through futures. The market is currently in a consensus phase of going long.”

On Wednesday, the Bernstein analysts also reiterated their call for bitcoin to approach $90,000 by the end of this year and reach a bull cycle target of $200,000 in 2025 — targets mirrored by Bitwise’s Hougan.