Is Trump really so great for bitcoin?
Subscribe to enjoy similar stories. Bitcoin is now worth more than any U.S.-listed company other than the six biggest. Dogecoin, created as a joke and the first cryptocurrency to have agovernment departmentnamed after it, would make it to the top 200 stocks by value, larger than Johnson Controls International.
The election lit the rocket that crypto enthusiasts hope will take prices to the moon. They are anticipating that President-elect Donald Trump will follow through on his pledge to defenestrate the anti-crypto chief of Securities and Exchange Commission, Gary Gensler, ease regulations on crypto-company listings, exchanges, finance and mining, and create a national stash of bitcoin. Easier regulations should in principle push up prices by making it easier to attract buyers.
Because cryptocurrencies aren’t backed by income or an economy, in the absence of any fundamentals they are driven entirely by supply and sentiment-driven demand. More buyers means a higher price. Yet, dig deeper into the argument, and it is hard to see why bitcoin should benefit so much.
The mother of cryptocurrencies is different than most coins. Along with the No. 2 coin, ethereum, it has little in the way of regulatory pressure.
It is treated as a commodity, so it avoids direct SEC oversight, and has both futures and—thanks to lawsuits against the SEC—ETFs. Other crypto-coins could benefit a lot if they also were exempted from SEC rules on prospectuses, while ether could benefit from a more relaxed approach to decentralized finance, but neither change would help bitcoin. Indeed, more demand for other coins might, at the margin, take buyers and their money away from bitcoin, which is by far the largest.
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