Donald Trump’s re-election as US President has fuelled major enthusiasm in the crypto markets. Bitcoin, which was already on an upward trajectory, has been soaring since November 7. In fact, the Trump-fuelled euphoria drove the global crypto market cap beyond $3 trillion for the first time since 2021 on November 14. Of this, Bitcoin accounted for $1.74 trillion. Bitcoin touched an all-time high of $93,445 on November 13, rallying almost 34% since election day. However, BTC had declined close to $88,000 by November 15. As a financial services marketing agency, we have always been bullish on BTC. Here’s our take on Trump’s re-election, Bitcoin and cryptocurrency marketing.
Cryptocurrencies on a Roll
Bitcoin isn’t the only cryptocurrency to benefit from Trump-led optimism. Dogecoin has also had a good run, given the key role Elon Musk played as a Trump supporter and expectations that he would continue to play a dominant part in the new administration. DOGE had soared 310.13% YTD by November 15, reaching $0.36983.
Here’s a lowdown on the promising crypto performance in 2024:
- Solana contributed most of the increased activity in cryptos in 2024, rising over 106% YTD by November 25.
- Almost one-third of all crypto use so far this year is accounted for by stablecoins, at 32%.
- The launch of BTC and ETH ETFs was also a positive for the crypto market, with ETF inflows reaching record highs as institutional investors raised their crypto exposure.
The market sentiment is reflected in the Crypto Fear & Greed Index, which reached 77 on November 7, signalling “Extreme Greed.” Historically, when the index lies between 75 and 100, it indicates high greed levels, indicating potential for an upcoming market correction. However, the historical trend did not pan out this time around, with the crypto markets continuing to surge. In fact, analysts expect Bitcoin to witness further upside in the run-up to Trump’s inauguration as President on January 20, 2025.
Why is the Trump Win Positive for Cryptos?
Donald Trump’s stance on cryptocurrencies during his election campaign was a radical change from his earlier position. He was never a fan of digital currencies, going so far as stating that their “value is highly volatile and based on thin air” on X (then Twitter) in 2019.
Come 2024 and perhaps buoyed up by his BFF Elon Musk, Trump has embraced the asset class with open arms, promising to make the US a “Bitcoin superpower” and the “crypto capital of the planet.” He aims to create a “strategic reserve” of BTC, using the Bitcoin that the government already holds.
“We will have regulations, but from now on the rules will be written by people who love your industry, not hate your industry,” he went on to say.
In late September 2024, Trump and his sons unveiled their latest entrepreneurial venture, a DeFi money market platform, named World Liberty Financial. The platform launched a new proprietary coin, $WLFI. Analysts state that Trump’s pro-crypto stance, coupled with his own investments in the crypto platform, will continue to attract investors on expectations that the second Trump administration will be crypto-friendly.
However, Trump has also been very verbal about his disdain for CBDCs. He supports the CBDC Anti-Surveillance State Act and believes that government-controlled crypto will undermine the privacy and financial freedom that the crypto community values so dearly. Trump’s anti-CBDC stance could impact global crypto trends even as numerous central banks, including the ECB, are moving forward in developing their own digital currencies.
What Analysts Expect
Analysts expect the ongoing euphoria in the crypto community to support the bullish run in the near future. So much so that Bernstein analysts are “confident” that BTC could reach $200,000 by end-2025. Economist and visiting fellow at the Heritage Foundation, Peter St. Onge is also optimistic about Bitcoin’s prospects.
Bitcoin at $100,000 has been a rallying cry for bitcoiners, and it’s now in sight with Powell’s pivot on interest rates. Bitcoin jumped several thousand on the announcement — with gold jumping over $2500 as well — because it signals more inflation from a Fed that’s now trapped by a failing jobs market.
Co-founder of wevr.ai, Matthew Webb, also expects 2025 to be a year of “mostly prosperity for Bitcoin.” However, Webb also warns that the pioneering cryptocurrency could see high volatility, especially if the US slips into recession. If a recession occurs, “I could well see Bitcoin going as low as $30,000,” he said. On the other hand, if the new government manages to steer the country out of recession, Webb sees BTC hitting $100,000.
What Brokers Should Know
Financial watchdogs worldwide are looking to establish clear regulatory frameworks for cryptocurrencies and cryptocurrency marketing. The EU has been especially proactive regarding crypto regulations, having passed the Markets in Crypto Act (MiCA), which is set to come into full effect by December 30, 2024. The US Congress has also passed the Financial Innovation and Technology for the 21st Century (FIT21) Act into law, calling it “a watershed moment for the US digital asset ecosystem.” These new laws are likely to create a pro-crypto environment, attracting traders, both beginners and veterans.
So, while this seems like a good time for brokers to go all out to focus on cryptocurrency marketing, it is important to also educate investors on the risks. The current greed sentiment is likely to fuel FOMO among investors, which will bring many new entrants to the markets. These may include vulnerable participants needing greater education regarding the high volatility of the digital assets market and the proliferation of bad actors. A rise in new entrants has historically been correlated with increased malicious activity.
Cryptocurrency marketing needs to strike a fine balance between compliance, promotion and education. Established in 2017, Contentworks Agency is the preferred marketing partner for cryptocurrency brokers and exchanges. Speak to us about cryptocurrency marketing.