Bitcoin
Cryptocurrency grows in political respect as Donald Trump courts bitcoin enthusiasts
Cryptocurrency is rising again on 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 surged more than 13% in the past month and surpassed $68,000 in the past 24 hours, putting the world’s largest cryptocurrency within striking distance of an all-time high set earlier this year.
This week, cryptocurrency investors are anticipating several reasons to get excited, including Securities and Exchange Commission Approvals for exchange-traded funds that hold ether (ETH-USD), the second largest cryptocurrency in the world.
These ETFs could make ether a potential staple in 401(k)s, IRAs and pension plans and ensure the digital asset gains more mainstream acceptance. Many of the same money managers hoping for approval already have ETFs that invest directly in bitcoin.
But the big event that is creating the most excitement in the cryptocurrency community will be this weekend, when Trump will speak at the Bitcoin 2024 conference in Nashville.
The Republican presidential candidate’s stamp of approval has many in the industry hoping for a friendlier regulatory approach from Washington, D.C., in 2025 and beyond.
Trump and many in his party have embraced digital assets in an attempt to create a contrast with the Biden administration, which has led a crackdown on many of the industry’s major players following the 2022 market crash.
The Republican Party said in its 16-page party platform last week that “Republicans will end Democrats’ illegal and un-American crackdown on cryptocurrencies.”
Trump, who has in the past called bitcoin a “fraud,” has referred to cryptocurrencies as “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)
“The Trump administration is likely to be more supportive of crypto 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 to cryptocurrencies and crypto stocks,” Bernstein analyst Gautam Chhugani added in a note on Monday.
Trump’s economic policies could also help digital assets surge in the coming years, according to some observers.
“What will drive the price of BTC is lower tax rates and tariffs, which, if history is any guide (and it isn’t always), will be inflationary,” Dallas Mavericks owner and manager Mark Cuban said last week.
Bitcoin is up more than 50% in 2024 so far, driven by a series of developments that have led many in the industry to bet on higher prices.
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These range from expectations of lower interest rates from the Federal Reserve to greater public acceptance of digital assets by some prominent Wall Street figures.
One such figure is BlackRock CEO Larry Fink, who last week in an interview with CNBC referred to bitcoin as a “bullish hedge” and a “legitimate financial instrument.”
“I firmly believe that bitcoin has a role 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 turned out to be a big boon for the first half of the year. Its iShares bitcoin ETF (I BITE) recorded $18 billion in net inflows in the first six months.
He is also expected to be among the money managers to win SEC approval this week to launch the first U.S.-regulated ether ETFs. The SEC has already approved exchanges to list such products.
Bitcoin was created in the wake of the 2008 financial crisis as a new type of money beyond the reach of governments. That led some in financial markets to view it as a type of digital gold or even a safe haven for storing value — though cryptocurrencies have traded more closely with volatile technology stocks in recent years.
Indeed, investors flocked to bitcoin during sudden changes in the monetary order, such as at the start of the war between Russia and Ukraine, when the US and its allies began imposing a series of sanctions on Russia.
The next chance for this to happen is when the Fed starts cutting interest rates, which investors expect to happen as early as September.
“Bitcoin hasn’t had the opportunity to really shine as a safe haven store of value asset,” said Joel Kruger, market strategist at LMAX, a London-based currency and cryptocurrency trading platform.
“It’s all been built around what’s been happening in the US stock market for years and I think there’s going to be a rotation. Typically what triggers that is [interest] rates changing.”
Correction: An earlier version of this article listed an incorrect spelling of Gautam Chhugani’s name. We regret the error.
David Hollerith is a senior reporter at Yahoo Finance covering banking, cryptocurrencies, and other areas of finance.
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