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Donald Trump has been elected the 47th President of the United States and will take office on January 6, 2025. This news is being commented on by everyone from traders and cryptocurrency enthusiasts to Ukrainian President Volodymyr Zelenskyy.
With Trump’s victory, the cryptocurrency market seems to have a promising future. Even before the Georgia and North Carolina victories were confirmed on election night, traders were already opening positions in Forex, bonds, and crypto assets.
Dollar and Bitcoin up, oil down
In short, recent developments in the US economic scenario, especially after the presidential elections, have generated important movements in several markets.
U.S. Treasuries are performing well, reflecting concerns about a possible increase in the U.S. deficit. Meanwhile, the dollar has strengthened after Donald Trump promised to impose tariffs on all imports. This is a policy that could have major implications for the global economy.
In the cryptocurrency market, Bitcoin reached new heights, surpassing 75,000 USD. This increase is attributed to the surprise at Trump’s recent pro-crypto stance, which contrasts with his previous more skeptical positions. Above all, the expectation that Trump may integrate policies that favor cryptocurrencies contributed to this appreciation.
the post US Presidential Election average return on $BTC from each cycle?
1-month +23%
3-month +105%
6-month +470%so regardless of the winner of the rat race, the market loves certainty and I don't expect this year to be any different
simply BET MORE pic.twitter.com/4a2NMY9DRB
— cuban 🍂 (@cubantobacco) November 3, 2024
The energy sector has also reacted to the election, with oil prices falling on fears that the United States may increase its supply on the global market. This move is in line with Trump’s “drill baby drill” mantra, which favors intensive energy exploration.
Bitcoin has historically responded positively to US election cycles. In the 2012, 2016, and 2020 elections, the cryptocurrency saw impressive returns over the following six months of 949%, 131%, and 328%, respectively. With the 2024/25 reelection coming up, analysts predict that Bitcoin could see its biggest post-election surge yet, with the potential to reach as high as $200,000.
Trump Plans to Make Bitcoin the US Reserve Asset
Furthermore, Donald Trump has ambitious plans for Bitcoin, envisioning the cryptocurrency as a reserve asset. As a result, this could mark a transformative moment for the crypto sector on a global scale.
This view was reinforced by his increasing involvement with the industry, investing millions in political lobbying through Political Action Committees such as Fairshake.
During his appearance at the Bitcoin 2024 conference in July, Trump managed to raise $25 million in contributions from attendees linked to the crypto industry.
Known for his previous NFT launches, Trump recently stepped up his engagement with the sector, launching a cryptocurrency exchange called World Liberty Financial. The platform’s native currency, WLFI, has been announced as a stablecoin, but details about it are still scarce.
While WLFI seems like an uncertain option for now, Trump has made bold statements about Bitcoin, even stating that he intends to include it in the US government reserves. If this does indeed happen, it would be a game-changing moment for Bitcoin, giving it the credibility of a reserve asset.
Finally, with the power he will soon regain, Trump has the opportunity to establish cryptocurrencies as an asset class worthy of investment by both governments and private investors.
Elon Musk could take on government role and influence electric vehicle policies
The possibility of Donald Trump getting closer to electric vehicle maker Tesla appears to have excited the market. While there is an apparent contradiction between Tesla’s sustainable mission and Trump’s skepticism about climate change and his disdain for electric vehicles, the future is still uncertain.
Elon Musk, the mogul behind Tesla, may soon take a position in the federal government as head of the newly created Office of Government Efficiency. In addition, Musk’s influence over Trump is already evident, and the closeness between the two was evident in Trump’s acceptance speech. In fact, they even watched the election results together at the Mar-a-Lago party, with Robert F. Kennedy Jr. also in attendance.
This rapprochement is reflected in the appreciation of Tesla shares after business hours, indicating that the market believes that Trump may adopt a more favorable stance towards electric vehicles, which could maintain or even increase subsidies for the sector.
However, there is a potential stumbling block: the conflict of interest that would require Musk to step down as CEO of his companies, including Tesla. Such a move may not be well received by shareholders.
Despite these concerns, Musk’s unprecedented proximity to the center of American power and his presidential influence are seen as a value-add for Tesla. Shares rose 13.2% in premarket trading to $251.4.
Trump Media & Technology Group shares soar
As investors adjust their portfolios to the new realities of a protectionist, pro-crypto Trump administration, there is a certain level of uncertainty about how to proceed in the market. However, it appears that there are some strategies that can be adopted to capitalize on the current trends.
One of the most popular bets is Trump Media & Technology Group (DJT), which has already appreciated 35.7% in pre-market trading to $33.94. TMTG’s main operation is the microblogging platform Truth Social.
Although the company’s financial fundamentals indicate that it is currently unprofitable, with a negative earnings per share of -$0.59, its shares have been behaving like a “meme stock.”
This means that the value of shares rises and falls according to Donald Trump’s political actions, which recently seem to be in a very positive phase.
Trump and Musk strengthen their influence on the cryptocurrency market, highlighting Dogecoin
Elon Musk, with his long association with Dogecoin, has frequently highlighted the cryptocurrency in statements and posts, contributing to its popularity in the sector. This connection is even more relevant considering Trump’s stated goal of making the United States the cryptocurrency capital of the world.
The cryptocurrency Dogecoin, known as the original meme coin and identified by the ticker $DOGE, saw a significant surge in value as the market reacted to the possibility of a Trump victory. At one point, it was up 26%.
Musk’s recent spotlight on Dogecoin and the curious reference to $DOGE as an acronym for Trump’s proposed Department of Government Efficiency show the connection between politics and cryptocurrencies. This phenomenon is likely to intensify, especially with Trump’s ambition to position the US as a global leader in the crypto sector.
"This election is the most important election of our lifetime. This is no ordinary election. The other side wants to take away your freedom. President Trump must win to preserve the Constitution. He must win to preserve Democracy in America."
一 Elon Musk pic.twitter.com/tnl0t9VVSf
— DogeDesigner (@cb_doge) November 5, 2024
In the current context of the “Trump era”, investing in cryptocurrencies seems to be one of the best strategies. Although it is still uncertain which policies proposed by Trump and Elon will be implemented, the possible resignation of Gary Gensler, chairman of the US Securities and Exchange Commission, points to the first step towards a more favorable regulatory environment for cryptocurrencies.
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