The 2024 U.S. presidential election has come to a close, and while many are still processing the results, one clear winner has emerged from the fray: the cryptocurrency industry. With President Donald Trump securing a second term and surrounding himself with a cadre of crypto-friendly officials, the stage appears set for a new era of regulatory clarity and mainstream adoption for digital assets.
Trump’s Crypto Crew
Trump himself has long been a vocal proponent of Bitcoin and cryptocurrencies, even going so far as to launch his own DeFi protocol, World Liberty Financial. The official Republican platform explicitly embraces crypto, and Trump has made specific commitments to the industry, such as pardoning Ross Ulbricht, ending SEC Chair Gary Gensler’s tenure, allowing Bitcoin miners to operate unimpeded, terminating Operation Choke Point 2.0, and having the government hold seized BTC.
But it’s not just Trump. The President-elect has surrounded himself with a veritable “orange-pilled” group of crypto advocates. Vice President-elect JD Vance owns Bitcoin and has a lengthy history of crypto involvement. Vivek Ramaswamy, the new co-leader of the Department of Government Efficiency (DOGE), has been a crypto bull for some time. Trump’s transition team co-chair Howard Lutnick is a mega-bull on Bitcoin and stablecoins. Even Elon Musk, fast becoming a sort of right-wing George Soros, has been involved with crypto for years.
Crypto Flexes Its Lobbying Muscle
The election was also a spectacular success for the crypto lobby. Bloomberg reported that FairShake, the industry’s largest Super PAC, prevailed in 48 out of 48 races where it backed a candidate. The Coinbase-affiliated “Stand With Crypto” aggregator claims 273 pro-crypto and just 12 anti-crypto representatives were elected this cycle. In the Senate, the crypto lobby poured an avalanche of money into races, helping unseat crypto skeptics like Ohio’s Sherrod Brown and Montana’s Jon Tester.
While the exact size of the single-issue crypto voting bloc is unknown, it’s undoubtedly the case that crypto helped swing some of these contests, aiding Republicans in retaking the Senate and keeping the House.
– Crypto policy expert
Stablecoin Clarity on the Horizon
Stablecoins, and Tether specifically, emerged as unexpected winners. Tether’s close relationship with Cantor Fitzgerald CEO Howard Lutnick, who is both Trump’s transition co-chair and a rumored Treasury Secretary candidate, represents a significant political lifeline for the beleaguered stablecoin. While lingering questions about Tether’s reserves will likely persist, the threat of aggressive regulatory action appears greatly diminished.
More broadly, stablecoin legislation is expected to be a top priority in the new Congress. While details are still being negotiated, insiders anticipate a bill that provides a clear regulatory framework for these digital dollars, potentially even granting them some type of official sanction or blessing.
DeFi’s Regulatory Reckoning
Decentralized finance (DeFi) also stands to gain under the new administration. Currently, the industry suffers from a regulatory paradox: the very features that make tokens valuable to hold – like cash flows and governance rights – also make them more security-like from a legal perspective. This has forced founders to walk an impossible tightrope between making their tokens attractive and avoiding the dreaded security designation.
With Gensler’s anticipated departure, the SEC looks poised to install a regulatory framework that treats these tokens as a form of pseudo-equity, requiring light investor protections. This would level the playing field and make the DeFi space fairer for investors while allowing founders to treat tokens more like protocol equity. The market is already anticipating this shift, with DeFi names catching a bid. Expect this flight to quality to continue in the coming months as the SEC’s token agenda crystallizes.
Banks Freed to Embrace Crypto
Despite the perception of a crypto/bank rivalry, the reality is that banks have been trying to enter the crypto space for quite some time. However, they’ve been largely barred from servicing the industry due to regulations like the SEC’s SAB 121, warnings against stablecoin dealings, and discouragement from the FDIC, OCC, and Fed (dubbed “Operation Choke Point 2.0”). Even now, the FDIC is insisting that banks offer no more than 15% of their deposit base to crypto firms.
Many banks would like to bank crypto companies but simply can’t. Meanwhile, foreign banks are feasting on crypto custody, exchange, stablecoin/FX brokerage, and even issuing their own stablecoins. U.S. banks have been left out in the cold.
– Banking industry insider
Expect all of this to change under Trump. SAB 121 will almost certainly disappear once Gensler is pushed out. And with new leadership at the OCC and FDIC, banks will be unshackled to service crypto clients as they see fit. Whether banks will be permitted to issue or transact with stablecoins themselves remains an open question, but the overall crypto banking environment looks poised to thaw considerably.
Prediction Markets’ Star Turn
Finally, prediction markets emerged as unsung heroes of the election cycle, performing exceptionally well. Platforms like Polymarket were far more bullish on Trump’s prospects (and Republicans more generally) than most pollsters, correctly calling a series of key races well ahead of pundits and the mainstream media.
Alongside stablecoins, prediction markets appear to be crypto’s first major consumer breakout product. They outperform polls and pundits and will be a defining feature of political life for years to come. In an era of declining faith in traditional institutions and “expert” opinion, their rise feels both inevitable and essential.
The 2024 election represented a coming-of-age moment for the crypto industry, which flexed its political muscle like never before. With regulatory clarity on the horizon and a coterie of crypto advocates poised to assume key positions of power, the stage is set for the next phase of growth and adoption. Buckle up – the real show is about to begin.
