The Trump Effect: How the Upcoming US Presidential Election Could Impact Cryptocurrency ETFs
The US presidential election is just around the corner, and the cryptocurrency market is abuzz with speculation about how the outcome could impact the industry. According to Eric Balchunas, an ETF analyst at Bloomberg Intelligence, the recent flood of submissions to list alternative cryptocurrency exchange funds (ETFs) in the US is essentially a “call option for a Trump victory.” Balchunas made this statement at the Plan B Forum Conference in Lugano, Switzerland, suggesting that a Trump win could lead to a more libertarian approach to cryptocurrency regulation.
A More Libertarian Approach to Regulation
During his speech, Balchunas noted that if Trump wins the election, he will likely appoint a more libertarian chairman to the Securities and Exchange Commission (SEC). This could have significant implications for the cryptocurrency market, as a more relaxed regulatory approach could pave the way for the approval of more cryptocurrency ETFs. In contrast, a win for Democrat Kamala Harris could mean a more stringent regulatory environment, which could hinder the growth of the cryptocurrency market.
Bitcoin and Ether ETFs Pave the Way
In recent months, we’ve seen the listing of Bitcoin (BTC) and Ether (ETH) ETFs in the US, after years of resistance from the SEC. This has emboldened other issuers to submit proposals for ETFs tracking other tokens, such as Solana (SOL) and XRP (XRP). In July, the Securities Exchange CBOE called for regulatory approval of the planned Solana ETFs from Vaneck and 21shares, while in October, ETF issuers requested approval for proposed XRP ETFs.
Crypto Policy and the Election
The upcoming election has significant implications for the cryptocurrency market, with many investors taking a keen interest in the candidates’ crypto policies. According to a survey by Gemini, three out of four crypto owners said that a candidate’s crypto policy would influence their vote. Republican candidate Donald Trump has been vocal about his support for cryptocurrency, stating that he wants to make America “the crypto capital of the world.” In contrast, Democrat Kamala Harris has been relatively quiet on the issue, although her boss, President Joe Biden, has taken a more aggressive regulatory approach towards crypto.
A Changing Regulatory Landscape
Under the Biden administration, the SEC has taken a tough stance on cryptocurrency regulation, submitting over 100 regulatory measures against industry companies. However, if Trump wins the election, he has promised to “fire” current SEC chairman Gary Gensler, who has been a thorn in the side of the cryptocurrency industry. This could lead to a significant shift in the regulatory landscape, with potential implications for the growth and development of the cryptocurrency market.
ETF Trends in 2024
Despite the regulatory uncertainty, the ETF market has seen significant growth in 2024, with Bitcoin dominating the ETF landscape. According to Nate Geraci, president of the ETF Store, 13 of the 25 largest ETF launches in 2024 were crypto-related, with Bitcoin accounting for six of the top 10 most successful launches. As the election approaches, it will be interesting to see how the ETF market responds to the changing regulatory landscape and the potential implications for the cryptocurrency market.
