Donald Trump will run for president in 2024; Will Bitcoin be of any use?
Donald Trump wants a new dance with the US presidency. Last month he gave the strongest hint yet of his intentions. Bitcoin (BTC) and crypto may be prime-positioned in the event that one of America’s most divisive presidents in recent memory wins re-election.
“To make our country successful, safe and glorious again, I’m probably going to have to do it again,” Trump said at a campaign rally in Sioux City, Iowa. Americans vote in the midterm elections on November 8. They elect new members of Congress to lead them until 2024.
Some polls predict a Republican victory. An announcement about Trump’s bid for the presidency in 2024 will then be revealed. That is according to mainstream media citing the former’s president’s close associates and will reportedly be announced on November 14.
Trump remains very popular in the Republican Party, insiders say. The ramifications of a potential bid by Donald Trump may not yet be clear.
Donald Trump: the unconventional president who affects the markets
Trump served as the 45th President of the United States between 2017 and 2021. It was an eventful period. The real estate billionaire broke almost every convention of the straight American presidency. He used Twitter to communicate political positions.
Barack Obama left office with the Iran nuclear deal as one of his diplomatic masterstrokes and a peace effort for his otherwise war-weary tenure. Trump was not eager to inherit the deal, renewing sanctions on Tehran with a nod from Tel Aviv.
Trump canceled crucial climate agreements such as the Paris Agreement from 2015. He directly confronted those with whom he disagreed. The former president’s way of doing things outside the norm was criticized by many.
Except perhaps by those in cryptocurrency and traditional financial markets. During his reign, the Bitcoin market seemed to flourish. The price of BTC rose over 2,600% during Trump’s four years in office. It rose from around $1,100 to under $30,000, entering the mainstream.
Better markets under Trump?
Meanwhile, US stock markets hit record highs during this period, spurred in part by stimulus spending in the wake of the coronavirus pandemic. For example, the value of the S&P 500 rose 20% days after Trump’s surprise victory in November 2016.
Stock markets continued to rise after this. Disregarding “any pre-election fears about a Trump presidency [which were realized] – he [was] erratic and has promoted autarky,” according to Bryn Lim of the University of Melbourne’s Business and Economics department.
While Trump was unpredictable, the market found a way to make money within the sensitive environment, Lim said. This is a result of the second reading of market efficiency, which was used by capital, he added.
“The first interpretation says that if markets are efficient, prices in markets accurately reflect all available information. The second says that if markets are efficient, investors cannot make abnormal profits by trading on available information,” he argued in a previous blog post.
Trump’s complicated relationship with Bitcoin
Trump paid no heed to these perceptions. “All those millions of people with 401(k)s and pensions are doing far better than they ever did before with increases of 60, 70, 80, 90 and 100% and more,” he boasted in a speech to Congress in 2020, Reuters reported.
He was referring to the impact that rising stock prices during his presidency had on pensions and pension funds. But comparing the impact of policy on the broader financial market and specifically the crypto ecosystem is a very subtle exercise, experts say.
“Given his assumptions about implementing cash-based palliatives, the crypto ecosystem may have a better chance of targeted long-term growth under the former president,” Ben Sharon, CEO of gold-backed crypto platform Illumishare, told BeInCrypto.
Still, Trump has a complicated relationship with crypto. While he tended to influence the markets, he never pretended to like Bitcoin. “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,” he tweeted in 2019.
“Unregulated cryptoassets can facilitate illegal behavior, including drug trafficking and other illegal activity,” Trump added. The tweet has since been deleted, along with Trump’s account, which was suspended in January 2021. Later that year, he called BTC “very dangerous.”
On the campaign trail
More recently, Trump has appeared in political debates, helping celebrity doctor Mehmet Oz in his campaign by campaigning alongside him. Oz, like Donald Trump, is pushing a campaign narrative in which US supremacy is central.
He is competing against John Fetterman for the Pennsylvania Senate seat. Oz has had to resort to ad-hominem attacks, a trick straight out of Trump’s playbook. This could point to many things, including that the former president still feels eccentric.
In that sense, a Trump victory in 2024 could mark a return of unpredictable separatist politics, which seemed to positively affect Bitcoin and traditional financial markets during his first era. There are no clear answers as to why the markets behaved in this way.
“Given the first interpretation, were markets inefficient if at one point they feared a Trump presidency but soon after came to embrace it?” Bryn Lim, an expert from the University of Melbourne, asked.
“Maybe yes, maybe no, depending on whether you believe that ‘accurate’ requires investors’ beliefs to be consistent. What the Trump presidency has made clear is that the second interpretation of market efficiency is almost certainly true.”
Trump wins, Bitcoin wins
Presidents “have rarely had much influence on stock prices, given the limits of office,” Lim said. But, “for better or for worse, Donald Trump is no ordinary president.” In fact, Bitcoin reported some impressive growth during the Trump presidency.
However, it was during his successor, President Joe Biden’s tenure, that BTC rose to its all-time high of more than $69,000 in November 2021.
Ben Sharon, CEO of Illumishare, told BeInCrypto that there is speculation that some voters will favor “crypto-savvy politicians regardless of their party affiliation.”
“As investors realize the potential for Trump’s return, digital asset prices may reflect this news in the medium term, forcing some of the flagship cryptocurrencies to close this year marginally more positive than already anticipated,” he said.
“Should these projections come true, Bitcoin could close the year above $30,000 and Ethereum above $2,000,” Sharon predicted.
Crypto Politics: Democrats Vs. Republicans
Across the political divide, Bitcoin has won admirers from Democrats and Republicans alike. Representatives like Ritchie Torres and Jim Himes from the Democratic camp have often talked about crypto.
“Crypto is the future,” Rep. Torres stated in an opinion piece in March. “It could enable the poor to make payments and money transfers without long delays and high fees. It could enable artists and musicians to make a living. This could challenge the concentrated power of Big Tech and Wall Street,” he added.
The same party hails crypto-skeptics like Senator Elizabeth Warren. Warren has criticized Bitcoin’s volatility “compounded by its susceptibility to the whims of just a handful of influencers.”
She was speaking in reference to a decision by Fidelity that allowed retirees to invest a portion of their money in crypto. Democrats are generally considered to be Bitcoin opponents. This indicates the direction that cryptopolitics may follow under the Democrats, one of polarization.
Republicans friendly to crypto?
By comparison, Republicans are seen as crypto-friendly. In April, representatives Patrick McHenry and Bill Huizenga criticized the US Securities and Exchange Commission (SEC) for exceeding its mandate.
“We are particularly concerned that the proposed rules could be interpreted to expand the SEC’s jurisdiction beyond its existing statutory authority to regulate market participants in the digital asset ecosystem, including in DeFi,” they wrote in an open letter to SEC Chairman Gary Gensler.
On November 8, Americans will elect 435 House of Representatives and only 35 senators from the total of 100 available seats.
The Democrats currently have a barely 8-seat majority in the House of Representatives. The Senate, on the other hand, is divided along party lines. The Democrats have a narrow majority. Polls predict that Republicans will cruise to victory.
As inflation hit a 40-year high of 8.2%, President Joe Biden’s approval ratings have plummeted. About 55% of Americans disapprove of the president, according to a Reuters poll. It appears that Biden will lose the House of Representatives under the weight of mounting economic pressure.
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