Stephen here. I’m writing you this special note to talk through what Trump’s win means for crypto.
Whether or not you’ve ever invested in crypto (a sector that reminds me of a basketball held underwater), I hope you’ll read this short debriefing without delay. This is crypto’s biggest moment since Satoshi founded bitcoin (BTC).
To fully appreciate what just happened, let me give you a glimpse inside my premium crypto advisory, RiskHedge Venture. In the August issue, I was blunt with members, as I always aim to be. Here’s what I wrote when the election still looked like a tossup:
I expect uncertainty around November’s US presidential election to keep a lid on crypto.
Trump is far more pro-crypto than the current administration. He plans to end the regulatory crackdown against crypto… fire hostile SEC Chairman Gary Gensler… and encourage bitcoin mining in America.
But if Kamala Harris wins, we’re likely to see even more stifling regulation lobbed at crypto. Remember, lack of regulatory clarity has been the #1 thing holding us back.
Trump wins = crypto up.
Harris wins = crypto down.
Crypto will likely stay in this range until we know who the next president is.
I went on to predict Trump would win because I trusted betting markets far more than polls.
Well, we have our winner—and crypto prices are responding as expected. Bitcoin surpassed $80,000 in less than a week. I think it hits at least $250,000 this cycle.
It will be a volatile ride—crypto always is. And just like every crypto upcycle, the right small cryptos will return many multiples of what bitcoin gains.
Let me show you why Trump’s win is the ultimate gamechanger for crypto.
The US government has stifled crypto for 4 years
The most frustrating part of the government’s assault on crypto was that it was undemocratic. Congress didn’t act. No laws were passed. Instead, bureaucrats—the vast majority of whom are unelected—refused to clarify the laws around crypto.
The industry asked for rules, and the regulators said, “No.” Instead, they sued innovators, “debanked” crypto companies and their founders, and terrorized the industry in many other ways.
One of the most damaging aspects of this was ruining what’s called “tokenomics.” I’ll talk more about this in a future issue and inside my Venture advisory. But in short, tokenomics describes what your ownership of a crypto entitles you to.
For example, when you’re buying equities, you’re entitled to a slice of the profits of the underlying business. When you buy a bond, you get a promise that the company will pay you interest plus the principal back.
When you’re buying crypto, what are you getting? The most promising cryptos had great answers to this. Hivemapper (HONEY), for example, pays users to buy and install a dashcam in their car and then drive around with it to create a real-time, constantly updated map to disrupt Google Maps. It pays the users in crypto.
Great idea, right? Not allowed. Although my Venture members made good money on Hivemapper by buying at $0.01 and taking profits at $0.12, its huge potential has been capped. The fact it’s been able to somewhat flourish anyway is a huge testament to its team.
There are dozens of Hivemappers out there—phenomenal teams with great ideas that were just waiting for regulatory clarity. You’ll see a burst of them now that the dominoes are starting to fall.
3 dominoes that must fall for bitcoin to surpass $250,000
For crypto to thrive in America, three dominos need to fall. The good news is they're already tipping.
- Clear rules: As I’ve said all along, we need clear rules. One of the many ways the government has held crypto hostage is by refusing to say who regulates it. Is a given crypto a security, which would put it under the Securities and Exchange Commission (SEC)? Or is it a commodity, which would put it under the Commodity Futures Trading Commission (CFTC)?
No one knows, which means multiple regulatory bodies claim jurisdiction. This will be fixed, and soon.
Earlier this year, the House passed the Financial Innovation and Technology for the 21st Century Act (FIT21). Now that Republicans also control the Senate, expect this bill to get signed into law in the first half of 2025.
Think of this as crypto's "legalization day"—the moment Wall Street can finally touch this asset class without worry they’re inadvertently breaking some law.
- End Operation Choke Point 2.0: This is the government’s primary tool to strangle crypto. It essentially made it illegal, or very risky, for banks to associate with crypto companies.
Sherrod Brown, a senator from Ohio, was the architect behind Operation Choke Point 2.0. He just lost his Senate seat.
Expect banks to be “open for business” once the new administration takes power.
- Fire Gary Gensler: The SEC chairman who’s ultra-hostile to crypto.
Gensler’s term isn’t up until 2026, but expect him to resign once Trump takes office. It's tradition. SEC chairs typically leave when their president loses.
If you’re interested in crypto, I caution you against waiting for these three catalysts. Markets are forward-looking. The price surges in bitcoin, Ethereum (ETH), and many other cryptos have made that clear.
This is not a time to wait and see. It’s time to act.
Stephen McBride
Chief Analyst, RiskHedge
P.S. In my Jolt investing letter—free to join—I write about the biggest disruptive trends like AI, biotech, and crypto... and what it means for you as an investor. Click here to join today.
