Topline
The “Trump factor” is a positive catalyst for the world’s largest cryptocurrency, bitcoin, Bernstein analysts asserted in a Tuesday note to clients, as Donald Trump’s selection of crypto-friendly Ohio Sen. JD Vance as his running mate further stoked bitcoin investors’ optimism about the prospect of the self-proclaimed “crypto president” Trump, despite Trump’s prior teardowns of bitcoin.
Donald Trump, left, and JD Vance are presenting themselves as a crypto-friendly ticket.
Key Facts
“The crypto market interprets a scenario of a Trump win as more positive for crypto” and bitcoin’s price is “positively correlated with the probability” of a Trump presidency, according to Bernstein analysts led by Gautam Chhugani.
Bitcoin is up about 10% to almost $65,000 since Saturday’s failed attempt on Trump’s life, which subsequently boosted his probability of prevailing in November’s presidential election according to betting markets, which are an imperfect real-time proxy of voter shifts, though most recent polls also suggest Trump has a narrow lead over Biden.
Bitcoin will continue to be “sensitive” to the election, predicted Chhugani, who has a highly optimistic $200,000 price target for bitcoin by the end of 2025.
Chhugani, who noted the Biden administration’s “strong regulatory crackdown on crypto and pro-Bitcoin statements by Trump” are fueling the bitcoin optimism, is the latest analyst to deem another Trump presidency as a tailwind for crypto, joining Standard Chartered analyst Geoffrey Kendrick, who predicted bitcoin could rise to $150,000 in the case of a Trump win, and Conotoxia analyst Grzegorz Dróżdż, who said it would “positively impact” crypto broadly.
Among the reasons Trump is seen as more pro-crypto is his support for domestic bitcoin mining, the energy-intensive process of extracting new bitcoins from the digital blockchain which Biden has proposed levying a major tax on, and his opposition to central bank-issued digital currencies which may threaten the value of extant digital tokens like bitcoin.
Monday appointment of the long-time crypto ally Vance as Trump’s vice presidential pick likely furthered Trump’s push, as Vance owned at least $100,000 worth of bitcoin as of his most recent financial disclosure and has repeatedly touted less regulation in the sector.
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Key Background
Prior to this election cycle, Trump repeatedly tore into bitcoin and promoted further regulation. “I am not a fan of Bitcoin and other Cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air” and “unregulated Crypto Assets can facilitate unlawful behavior,” Trump wrote on X in 2019. Other criticism included saying bitcoin “seems like a scam” in 2021. Trump soon flipped on crypto, selling millions of dollars worth of his own branded non-fungible tokens (NFTs) beginning in 2022, and his campaign began accepting crypto donations, bringing in $1.8 million worth of bitcoin contributions during 2024’s second quarter, declaring he is “very positive and open minded to cryptocurrency companies and all things related to this new and burgeoning industry” in May. Several notable figures in the crypto industry have backed Trump, including billionaire twins Cameron and Tyler Winklevoss, who bemoaned that Biden has “openly declared war against crypto” in their June pledge to donate $1 million apiece in bitcoin to Trump election efforts.
Contra
Despite the crypto market’s apparent support for a presidential regime change, there have been several big wins for bitcoin under Biden. Since Election Day 2020, bitcoin is up almost 400%, jumping from about under $14,000 to almost $64,000. Most crucially, Biden-appointed financial regulators approved the first-ever spot bitcoin exchange-traded funds in January, prompting billions of dollars of institutional investment into bitcoin. Much of the crypto community’s criticism of the Biden Administration has focused on Securities and Exchange Commission chairman Gary Gensler, who has often been critical of the space. Part of Gensler’s regulatory crackdown includes the unraveling of bad actors like the bankrupt crypto exchange FTX, whose founder Sam Bankman-Fried is amidst a 25-year prison sentence, and the Federal Bureau of Investigation found Americans lost some $3.94 billion in crypto investment fraud schemes in 2023, a 53% year-over-year increase.