The New Wave of Cryptomania

Following the 2024 presidential election, the cryptocurrency market has reached a new milestone. Donald Trump’s victory appears to have been not only a personal comeback but also a turning point for the crypto world. On election night, as Trump’s win became evident, Bitcoin’s price surged by 10%. By November 11, with the possibility of Republicans gaining control of Congress, Bitcoin’s value reached $89,000—marking a 45% increase since mid-October. This growth reflects renewed public confidence in cryptocurrencies and optimism that the new political climate will favor crypto investors.

Bitcoin is not the only cryptocurrency benefiting from this momentum. Excluding stablecoins, which are designed to avoid price volatility, the market’s 20 leading cryptocurrencies have grown faster than Bitcoin. For instance, Dogecoin—often promoted by Elon Musk—doubled in price since election day. On November 12, the global cryptocurrency market valuation reached $3 trillion for the first time, signaling sustained interest and activity in this space.

This resurgence marks an impressive comeback for cryptocurrencies following the crisis of 2022-2023. During that period, the Federal Reserve’s aggressive interest rate hikes slowed speculative activity across markets, dealing a heavy blow to crypto assets, which lost significant value. Poor management and fraud at crypto firms such as FTX caused substantial financial losses, further damaging the industry. Increased scrutiny and strict actions by financial regulators exacerbated the situation, creating additional hurdles for the crypto sector.

However, the changing political climate in 2024 has filled the cryptocurrency recovery process with new hope. With closer ties between the crypto industry and political leadership, there is anticipation that new regulations will foster stability and growth in the market. This renewed optimism is energizing crypto investors who see long-term potential in the sector.

Toward the end of 2023, as the U.S. presidential primaries gained traction, the crypto industry saw an opportunity. Trump emerged as a strong supporter of cryptocurrencies, promoting platforms like World Liberty Financial, which has ties to his family, and promising to transform America into a “Bitcoin superpower.” His vocal support for crypto assets provided a significant boost to the industry, creating fresh political momentum for the crypto space. During the election cycle, crypto lobbyists spent over $100 million supporting favorable candidates, reflecting the industry’s serious efforts to strengthen its position in the political arena.

If Trump’s second administration adopts more lenient and consistent regulations for crypto assets, it could mark a crucial step in developing cryptocurrencies as a legitimate asset class for institutional investors. Institutional investors currently approach cryptocurrencies cautiously due to inconsistent and unclear regulations. Trump’s support and regulatory stabilization could instill confidence in these investors, encouraging their participation in the crypto market.

Nevertheless, uncertainty persists in the crypto world regarding the consistency of future regulations. Trump’s affection for cryptocurrencies is relatively new; in 2021, he referred to Bitcoin as a “scam against the dollar.” Therefore, the hope for improved crypto regulations under his second term might be overly optimistic. For investors, positive regulations must also be stable and predictable in the long term—a factor that remains unclear under Trump’s administration.

This new wave of cryptomania demonstrates how Donald Trump’s victory has significantly boosted cryptocurrency prices and market activity. Under his administration’s support, the crypto industry has gained new hope for more consistent and favorable regulations. However, uncertainty remains as to whether this support will be sufficient to normalize regulations and enhance market stability.

Meanwhile, the growth of the cryptocurrency market underscores a substantial interest in the sector. To sustain this growth and achieve stability, clear and predictable regulations are essential. For the crypto industry, the primary challenge will not only be halting unfavorable regulations but also developing frameworks that give investors confidence and a sense of security—critical for the market’s long-term success.

Sources:

1. The Economist – Data and analysis on Bitcoin’s growth (2024).
2. FTX and regulatory issues – Public financial reports, SEC documents (2023-2024).
3. World Liberty Financial – Public statements and online content (2023).
4. SEC regulatory changes – Government documents and reports (2024).