Donald Trump’s presidential victory has transformed the regulatory landscape for cryptocurrencies, shifting from a headwind to a tailwind, according to analysts at Bernstein, a leading research and brokerage firm. The market, they argue, has yet to fully price in this significant shift.
In a note to clients on Wednesday, Bernstein analysts led by Gautam Chhugani predicted the appointment of a “crypto-friendly” SEC Chair and the influence of a similarly inclined Senate Banking Committee will accelerate regulatory clarity for the industry. This marks a stark contrast to the current SEC under Gary Gensler, which has engaged in numerous legal battles with major crypto players like Coinbase, Binance, Kraken, and Robinhood, as well as DeFi, NFT, and stablecoin projects.
The crypto industry has long sought clearer regulations, particularly regarding the classification of digital assets (beyond simply as securities), the application of broker/dealer laws to crypto exchanges and DeFi, streamlined approvals for investment products like ETFs, and enabling banks to hold and custody cryptocurrencies.
Bernstein anticipates faster progress on stablecoin and market structure bills, benefiting stablecoin issuers like Circle and Paxos, as well as US-based crypto exchanges. They also foresee advancements in other crypto rules and definitions in the medium term, potentially leading to a re-evaluation of crypto assets beyond Bitcoin and Ether, whose valuations have been hampered by regulatory uncertainty and ambiguity surrounding their security status.
Trump’s pro-crypto stance, evident in his campaign promises to fire Gensler “on day one,” transform the US into a Bitcoin mining powerhouse, and establish a national strategic Bitcoin reserve, is expected to translate into positive action under his administration.
The anticipated Republican sweep of the presidency, House, and Senate, fueled in part by crypto-focused Super PACs, further reinforces the expectation of a new era of crypto-friendly rule-making. This “transformational shift,” Bernstein asserts, is not yet reflected in market valuations.
While acknowledging the possibility of an initial “sell the news” market reaction, the analysts view any resulting dip as a buying opportunity for cryptocurrencies and related stocks. They reiterate their prediction of Bitcoin reaching $90,000 by the end of the year and a bull cycle target of $200,000 by the end of 2025 under the Trump presidency.
