How Long Can the "Trump Trade" in the Cryptocurrency Market Last?
TechFlow Selected TechFlow Selected
How Long Can the "Trump Trade" in the Cryptocurrency Market Last?
Now calls himself a "crypto president," but five years ago he was a crypto opponent.
Navigating Web3 tides with focused insightsAuthor: Mu Mu
Editor: Wen Dao
The attempted assassination of Trump and Biden's withdrawal from the presidential race have become catalysts for the rebound in the crypto market. Bitcoin briefly broke its slump, surging past $67,000 with over a 10% gain within a week, while meme coins related to both figures have proliferated.
Donald Trump, who calls himself the "crypto president," has received campaign funding in digital asset form and gained popularity following the assassination attempt and his opponent’s exit. His campaign moves have now become a barometer for the crypto market, and he is actively courting votes from the crypto community.
According to The Wall Street Journal, Trump will speak at the 2024 Bitcoin Conference in late July and hold a fundraising event prior to that. Teong Hng, CEO of Satori Research, predicts Bitcoin may soon return to its all-time highs, saying, “A strong rebound by year-end will be marked by Trump’s victory.”
However, Vitalik Buterin, co-founder of Ethereum, has voiced opposition. On July 18, he posted that people should not make political voting decisions based solely on whether a candidate supports cryptocurrencies, as friendliness toward crypto today does not guarantee the same stance five years later.
How long can the “Trump trade” in crypto last?
Trump Reinforces Pro-Crypto Stance
On July 21, Biden announced via an “open letter” that he would no longer seek re-election. Support for Trump surged immediately, amplified by the public sympathy generated from his earlier assassination attempt, significantly increasing his odds of winning. Data from decentralized prediction platform Polymarket shows Republican candidate Trump has a 61% chance of winning the 2024 election, far ahead of Kamala Harris at 37%.
Wall Street investors believe Trump has a high likelihood of returning to the presidency. Industries expected to benefit under a Trump administration—such as cryptocurrencies, fossil fuels, and banking—are already seeing what’s known as the “Trump trade” rally.
Nowhere is this more pronounced than in the crypto sector. Bitcoin’s price movements have recently correlated strongly with Trump’s campaign activities, which have also drawn public endorsements from influential figures in the crypto space, triggering broader market reactions.
Bitcoin (BTC) spiked after the assassination attempt, gaining 10% in a week and dispelling prior market gloom. Elon Musk, CEO of Tesla and a former Dogecoin promoter, joined the crypto community in adopting the “laser eyes” avatar—a symbol widely recognized in crypto circles. Prominent figures such as Marc Andreessen, founder of crypto venture firm a16z, and Ryan Selkis, founder of Messari, also changed their profile pictures in support of Trump’s pro-crypto stance. Shortly afterward, DMAGA, a token tied to the “laser eyes” meme culture, surged over 50x within hours, surpassing a $60 million market cap.
Crypto influencers adopt the laser eye avatar
How deep is Trump’s connection to crypto assets?
A report by The Wall Street Journal citing the latest Federal Election Commission (FEC) data reveals that out of approximately $331 million raised by Trump’s campaign team last quarter, about $3 million came in the form of cryptocurrencies, including BTC, ETH, and Dogecoin.
Recently, Trump has sent further signals of his pro-crypto position. Overseas media reports indicate he will deliver a speech at the 2024 Bitcoin Conference in late July and host a fundraising event beforehand.
Additionally, in a Bloomberg interview, Trump revealed plans to launch a fourth NFT series, citing the previous ones’ “tremendous success,” having sold out within a day. “I plan to release new collections because many people are expecting it,” he said.
Trump, self-proclaimed “crypto president,” has now deeply intertwined his campaign with the crypto market. Teong Hng of Satori Research notes that active options trading suggests Bitcoin could soon return to its all-time highs, predicting “a strong rebound by year-end, symbolized by Trump’s victory.”
Stephane Ouellette, CEO of FRNT Financial, echoed similar sentiments, stating that growing expectations of a Trump win are pushing up Bitcoin and other cryptocurrencies, as a second Trump administration could create a more favorable regulatory environment for the industry.
Ethereum Co-Founder Vitalik Pushes Back
Whether a Trump victory will spark another upward cycle in crypto markets has become a focal point for the community. Yet amid the enthusiastic support, dissenting voices have emerged.
On July 18, Vitalik Buterin, co-founder of the Ethereum network, wrote that he opposes making political voting decisions based on whether a candidate supports cryptocurrency, arguing that current friendliness does not ensure long-term commitment.
Vitalik opposes voting based on crypto support
In his post, Vitalik pointedly suggested, “If you find a politician friendly toward crypto, one thing you can do is check what they thought about crypto itself five years ago.”
This was clearly a jab at Trump himself, who five years ago held sharply different views. In 2019, while serving as U.S. President, Trump tweeted: “I am not a fan of Bitcoin and other cryptocurrencies, which are not money. Their value is highly volatile and based on air. Unregulated crypto assets can facilitate illegal behavior, including drug trafficking and other illicit activities.”
In 2021, during an interview on Fox Business, Trump called Bitcoin a scam against the U.S. dollar and said he wouldn’t be surprised if it fell below $6,000.
Now, five years later, Trump has reversed course, embracing a pro-crypto stance and criticizing the Biden administration’s tough policies on digital assets.
Adam Cochran, partner at Cinneamhain Ventures, argues that Trump’s promises to win voter support are highly unreliable. He noted Trump’s “decades-long history of flipping positions” and “betraying others for personal gain.” Fact-checking website PolitiFact analyzed that more than half of the 102 promises Trump made during his 2016 presidential campaign were later broken by him.
Some analysts argue that even if Trump wins re-election and fulfills his promises, the crypto market is increasingly correlated with the U.S. stock market. This implies that Federal Reserve interest rate policies will continue to heavily influence market dynamics. So how much impact would a Trump presidency actually have on Fed decisions?
In July this year, ahead of the first presidential debate, Trump stated in a media interview that he would not nominate Powell for a third term as Fed Chair but would allow him to complete his second term. He also argued the Fed should avoid cutting rates before the November election to prevent boosting the economy under Biden’s tenure.
Republicans, represented by Trump, generally favor looser monetary policy. During his presidency, Trump repeatedly criticized the Fed, urging Chair Powell to stop rate hikes and cut rates immediately. Recently, during his campaign, Trump reiterated his economic agenda, emphasizing “Trumpomics” = low interest rates + low taxes.
In reality, the Federal Reserve operates independently within the U.S. government structure, designed to remain insulated from political influence. The president cannot appoint or dismiss the Fed Chair at will, and major policy decisions depend significantly on Congress.
According to Wolfe Research, the most significant policy shifts over the past 15 years occurred when one party controlled both the White House and both chambers of Congress. Without Republican control of both congressional chambers, Democrats could place roadblocks in front of Trump’s agenda.
How long will Trump’s alignment with cryptocurrencies last? In the short term, until the November U.S. election results are finalized, Trump’s positions, actions, and voter support will continue to influence the crypto market. However, once the election outcome is settled, the “Trump trade” momentum may well fade.
Join TechFlow official community to stay tuned
Telegram:https://t.me/TechFlowDaily
X (Twitter):https://x.com/TechFlowPost
X (Twitter) EN:https://x.com/BlockFlow_News
