Could a Trump Victory Spell Trouble for Crypto?

• Could a Trump Victory in 2024 be Favorable for Cryptocurrency?
• Pro-Crypto Policies Expected from Trump
• Regulatory Implications and Crypto Challenges
• Regulation and Crypto: A Necessary Balance
• The Future of Crypto and Politics
• The Impact of Open-Source Development
• Will Trump's Potential Reinstatement Positively Impact Crypto?

Could a Trump Victory in 2024 be Favorable for Cryptocurrency?

Politico recently published an article suggesting that a potential Trump victory in the 2024 elections may favorably impact the cryptocurrency market. The article identifies a stark contrast between Trump's potential approach to crypto and President Biden's current stance, which is generally characterized by skepticism due to perceived financial system risks and consumer protection concerns.

Pro-Crypto Policies Expected from Trump

Statements from key figures such as House Majority Whip Tom Emmer and former Comptroller of the Currency Brian Brooks, suggest that should Donald Trump triumph, his anti-establishment stance may lead to policies beneficial to cryptocurrency and a breakdown of current regulations. Trump, who has previously expressed skepticism concerning cryptocurrencies, now appears to be at ease with their proliferation, demonstrated by his embrace of NFTs for profit generation.

Assuming a Trump win, it's expected that his administration would provide a more favorable environment for cryptocurrencies than the current Biden administration, whose approach is seen as antagonistic towards the industry. This is particularly evident in the Securities and Exchange Commission's (SEC) multiple lawsuits against established crypto businesses such as Coinbase and Kraken, and Biden's comprehensive government approach to regulating the industry.

Regulatory Implications and Crypto Challenges

While a friendlier regulatory outlook seems advantageous, it could potentially pose more harm than good, considering the departure of Gary Gensler as the SEC chair. While many in the crypto industry call for clarity and denounce regulation, it's crucial to consider the necessity of these protocols undergoing rigorous scrutiny to establish themselves as truly borderless, decentralized, and stateless.

Despite the dampened opportunity for the industry to develop robust, widely used protocols capable of withstanding threats, the value of Bitcoin$42,260 -0.64% remains high. Nonetheless, the absence of useful tools that can withstand significant disruption has emphasized the need for regulation. The industry has witnessed numerous technical failures and scams, raising questions concerning the merit of unchecked crypto activity.

Regulation and Crypto: A Necessary Balance

While regulatory solutions may not entirely resolve systemic issues such as fraud, there is a correlation between the rise of scams and the capital invested in crypto. If the U.S. government eases crypto regulations, it could empower malicious actors and enable corporations to market risky financial products to consumers. Furthermore, it remains uncertain whether the crypto lending sector has addressed its shortcomings following the collapse of major crypto lenders.

Although regulation need not be a partisan issue, support for crypto is becoming increasingly politicized. For instance, Sen. J.D. Vance (R-Ohio), a Trump ally, has expressed interest in balancing consumer protection with the growth of the crypto industry.

The Future of Crypto and Politics

While it's uncertain how the election cycle will unfold, it's important to consider the various possible outcomes. For instance, if Biden retains his position, changes in administrative roles, such as the promotion of Gensler to Treasury Secretary, could have significant implications for the crypto industry.

Nevertheless, the ideal scenario would involve developers building protocols immune to regulatory enforcers, irrespective of political climate. However, instead of using regulatory challenges as a catalyst for building better protocols, some have capitulated to such pressures.

The Impact of Open-Source Development

Following the belief that open-source development is a collaborative process, it's possible that shared knowledge could catalyze industry-wide progression. Some even believe that after enough breaches, open protocols could eventually become impervious to hacking.

Will Trump's Potential Reinstatement Positively Impact Crypto?

As the 2024 election approaches, it's worth revisiting predictions made around Trump's 2016 win. While some viewed this as an opportunity for smart contract trials, others were concerned about Trump's negative views on Big Tech. However, with figures such as Peter Thiel potentially profiting from a Trump victory due to their Bitcoin investments, it's clear the upcoming election could have far-reaching implications for the crypto industry.

Edited by Jonathan Stoker