Donald Trump’s win in the US presidential election has set the financial world abuzz and there is a visible surge in optimism across crypto markets. Trump has been a vocal advocate of crypto. His stance on making the US a crypto hub, coupled with the launch of his family’s token WLFI, marks a transformative period for both Bitcoin and the broader crypto ecosystem. That said, investors, traders, and crypto stake-holders are keeping an ear to the ground to embrace the changes that could come about as the new US president takes over.
Solidifying the crypto world’s trust in Trump, the Bitcoin (BTC) market cap has moved past $1.5 trillion after the results. BTC prices touched a new all-time high, marking its first breach of $81,000. The total crypto market cap is now around $2.7 trillion.
Let us examine, in detail, the factors driving the price surge and the key aspects that investors should understand to make the best of this bull run.
What is Driving BTC’s Price Surge?
Trump’s pro-crypto stance played a major role in his re-election campaign as he strategically placed digital assets on par with other pressing issues like immigration and healthcare. This could be more than just rhetoric. Trump’s administration is expected to introduce clear crypto regulations, pro-mining policies, and a supportive regulatory framework—factors that are crucial for sustained growth in the crypto space. His potential appointments to regulatory bodies, such as the SEC, are likely to favour innovation and push for frameworks that encourage crypto firms to thrive.
As the US embraces a crypto-friendly stance, it is expected to bring strong inflows into Bitcoin ETFs. The US could soon dominate global crypto transactions and set the tone for international crypto regulations. This is especially important for the US as it competes with China and other nations developing their own digital currencies.
Altcoins to Benefit from Bitcoin’s Surge
As Bitcoin continues its rally, it is expected to lift the altcoin market, as has historically happened in previous bull cycles. Altcoins generally perform well during Bitcoin bull runs with investor confidence and optimism spilling over. Major altcoins, particularly Ethereum (ETH), are poised to capitalise on the price momentum created by BTC. A rise in BTC often prompts investors to diversify into other crypto assets, amplifying the potential for gains across the board.
Key Advice for Prudent Investors
In times of market optimism, it is crucial for investors to remain grounded and focused on long-term strategies. Here are some actionable tips for making the most of this bull run:
- Consider a Balanced Portfolio: Bitcoin, often regarded as ‘digital gold,’ should hold a significant position in your portfolio due to its historical resilience and market leadership. However, altcoins like Ethereum and emerging projects with strong fundamentals can offer substantial returns during a bull market. That said, experts peg BTC prices to be between $85,000 and $90,000 soon. However, investors should also be ready for quick corrections and fallbacks.
- Watch for Regulatory Updates: Trump’s administration is expected to push for clear crypto regulations intended to create a favourable environment for US-based crypto firms. Pay attention to these developments, as these will influence the market’s trajectory. A more structured regulatory landscape can spur institutional investments and add legitimacy and stability to the crypto markets.
- Keep an Eye on ETFs and Institutional Inflows: Bitcoin ETFs are likely to see major inflows with Trump’s pro-crypto stance. This not only brings more capital into the market but also signals broader acceptance of digital assets as mainstream investments. Investors in India may not be able to invest in ETFs at this point but it is a valid indicator.
- Stay Alert to Global Trends: Trump’s approach could set an international standard for crypto regulation. This could impact markets worldwide. Other countries may feel compelled to align with this deregulatory approach to stay competitive. Indian investors, in particular, should advocate for clear, forward-looking regulations to avoid missing out on the economic potential that crypto offers.
- Practice Patience and Discipline: Bull runs are marked by periods of high volatility and the fear of missing out (FOMO). These should not drive impulsive decisions. Stick to your strategy, invest responsibly, and avoid making decisions based on market hype. Ensure that your investment decisions are driven by research and align with your risk tolerance.
- Secure Your Investments: Always use reputable exchanges, secure wallets, and two-factor authentication to protect your assets. The rising price of BTC will inevitably attract fraudsters and cybercriminals, making it essential to safeguard your investments.
With Trump’s pro-crypto stance, we are entering an exciting new chapter in the crypto market. His policies have the potential to bring clarity, drive innovation, and create a robust environment for digital assets to flourish.
As Bitcoin breaks new ground and the US moves toward a crypto-friendly future, the possibilities for growth are vast. However, remember that successful investing requires a combination of strategy, patience, and vigilance. Stay informed, make well-researched decisions, and you will be better positioned to navigate this transformative era for digital assets.
(The author is the CEO, Giottus Crypto Platform)
Disclaimer: The opinions, beliefs, and views expressed by the various authors and forum participants on this website are personal and do not reflect the opinions, beliefs, and views of ABP Network Pvt. Ltd. Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. Cryptocurrency is not a legal tender and is subject to market risks. Readers are advised to seek expert advice and read offer document(s) along with related important literature on the subject carefully before making any kind of investment whatsoever. Cryptocurrency market predictions are speculative and any investment made shall be at the sole cost and risk of the readers.