One Week Until Trump’s Return: Crypto Investment Opportunities and Strategies for 2025 Under a Pro-Crypto Presidency
Key Takesaway
1. Pro-Crypto Presidency: An Investment Opportunity
With Trump’s return to the presidency, his pro-crypto stance presents a promising environment for crypto investments. Immediate pro-crypto signals and policy support are expected to boost market sentiment.
2. Opportunities for Promising Crypto Companies
The anticipated development of regulatory frameworks will create more opportunities for high-quality crypto companies. With improved compliance support, these companies could gain greater investor attention and deliver significant returns.
3. Inflation and Market Volatility Risks
While Trump’s policies may drive innovation, they could also exacerbate inflation concerns, leading to heightened market volatility. The uncertainty around inflation could disrupt the rate-cut cycle, influencing liquidity and the performance of risk assets, including crypto. As a result, having a well-thought-out investment strategy will be crucial—not only to survive periods of high volatility but also to seize potential opportunities and achieve substantial returns in this dynamic environment.
The Return of Trump and His Pathway with Crypto
With less than a week until Donald Trump resumes the presidency, the cryptocurrency market is abuzz with anticipation. Bitcoin's price has surged to unprecedented levels since his election victory in November 2024, reflecting investor optimism about his pro-crypto stance. In previous discussions, I've highlighted significant moves he's made and collaborations with key figures such as Brian Armstrong, Paul Atkins, David Sacks, and Elon Musk, underscoring his genuine support for the crypto industry.
However, Trump's characteristic decisiveness and unconventional approach suggest that his actions might outpace market expectations. Unlike traditional politicians, Trump favors prompt action, even if it requires subsequent adjustments, rather than waiting for "fully mature" plans. In light of this, two developments are anticipated in 2025, potentially occurring sooner than the market expects:
1. Immediate Pro-Crypto Signals: Trump has consistently expressed strong support for cryptocurrencies. During his visit to the New York Stock Exchange on December 12, 2024, he stated, "We’re gonna do something great with crypto... we want to be ahead." Reports indicate that Trump even plans to repeal the SEC's Staff Accounting Bulletin No. 121 (SAB 121) on his first day in office. SAB 121 has been criticized for precluding banks from offering digital asset custody at scale, thereby limiting bank adoption of Bitcoin ETFs and tokenization. While Federal Reserve Chair Jerome Powell has stated that the current Federal Reserve Act does not permit the inclusion of Bitcoin in national reserves—a change that would require a complex legislative process—Trump is expected to continue issuing strong pro-crypto signals from his first day back in the White House.
2. Advancement of Regulatory Frameworks:
Despite the complexities involved in significant initiatives, such as recognizing Bitcoin as a national reserve—which would require extensive legislative deliberation—Trump's administration is expected to take a proactive approach toward developing regulatory frameworks. This could include legislative reforms or the establishment of new departments focused on cryptocurrency oversight.
There are already numerous successful crypto companies that have built large-scale, relatively mature business models and generate substantial profits, even among publicly listed firms. However, many of these companies have opted for token-based models rather than traditional equity structures when engaging with investors. Over the past few years, such companies have faced regulatory challenges rather than support. For instance, Uniswap faced an SEC lawsuit after attempting to distribute dividends to token holders, highlighting the regulatory hurdles that stifle innovation.
The return of the Trump administration brings renewed hope for these companies. A forward-thinking regulatory framework that adapts to the pace of technological progress is essential for their continued growth. With clearer, innovation-friendly policies, crypto businesses can thrive without the constant threat of punitive actions. After all, it’s hard to imagine anyone doing worse than Gensler when it comes to regulatory enforcement.
Trump’s return to power is undoubtedly a significant boost for the crypto industry. Beyond the short-term speculative excitement, the two key factors mentioned above are likely to have a profound and lasting positive impact on the sector’s development. For investors, an emerging, high-potential, and rapidly evolving industry like crypto is an opportunity that cannot be overlooked.
Market Liquidity
On last Monday, January 6th, Bitcoin briefly surged past the 100,000 mark, but like other risk assets, it soon faced a pullback within a day due to stronger-than-expected economic and employment data. While Bitcoin is often touted as an inflation hedge, in the current market environment, it still exhibits a high sensitivity to liquidity conditions, much like other risk assets.
The release of the U.S. December Non-Manufacturing PMI and November’s JOLTS job openings data on January 7th, along with the looming debt ceiling deadline, prompted the market to revise its expectations for rate cuts. Instead of anticipating two rate cuts in 2025, as previously guided during the December FOMC meeting, the market now bets on no rate cuts at all. This shift was reflected in a sharp rise in the 10-year U.S. Treasury yield, which climbed to around 4.7% on the same day.
Adding to this uncertainty is also Trump’s influence. His stance on tariff-related policies has been a long-standing concern regarding inflation. Consequently, the Federal Reserve and other institutions are holding off on any definitive assessments of future inflation pressures or rate cut plans until Trump’s policies are officially enacted. The only area of consensus so far is the potential for a decline in oil prices, whether driven by expectations of a ceasefire in the Russia-Ukraine conflict or other factors related to Trump’s administration. However, beyond oil, there remains significant disagreement on inflation trends. Even Federal Reserve officials have increasingly signaled a more hawkish stance, suggesting fewer rate cuts than previously anticipated. Powell’s confidence in controlling inflation, which was evident in September 2024, now appears to have waned.
Despite concerns about U.S. inflation, the U.S. economy is expected to continue attracting global liquidity in 2025, given its relatively strong performance. Large-cap tech stocks and crypto assets, which remain highly appealing to investors, are likely to be key beneficiaries of this inflow.
For investors, staying on the sidelines in such an uncertain inflationary environment may not be the best strategy. In fact, persistently high inflation over an extended period could become the new normal. It may be time to shift our thinking toward coexisting with high inflation, rather than expecting it to subside anytime soon. In this scenario, Bitcoin, with its anti-inflationary properties, once again demonstrates its value.
In conclusion, unlike bonds, risk assets 's value hasn't fully reflect to every slight change in rate cut expectations yet. Over the next three months, macroeconomic data will likely continue to drive liquidity shifts, resulting in volatile price swings for risk assets. However, in a fundamentally sound environment, such volatility could present opportunities for savvy investors.
2025 Outlook
With Trump’s return to power, 2025 is shaping up to be a year full of opportunities for crypto investors. Progress in regulation could elevate this dynamic, innovative—yet still untamed—market to a new level. Bitcoin’s adoption among mainstream investors is likely to accelerate, and in an environment where prolonged high inflation remains a possibility, Bitcoin’s role as an inflation hedge could become increasingly clear, further boosting its appeal.
Additionally, other high-quality crypto companies are expected to gain more visibility among investors and institutions, potentially delivering impressive returns. Just as the launch of the Bitcoin Spot ETF last year expanded the pool of investors, this year could see a similar expansion in investor interest across promising crypto projects. For readers interested in diving deeper into these opportunities, SoSoValue has recently introduced several indices designed as excellent starting points for understanding key projects and sectors. With lower monitoring and decision-making costs, index investing offers a way to capture sector-wide beta returns—precisely the goal behind the design of such products.
(MAG7.ssi contains the top 7 cryptocurrencies by market capitalization, including Bitcoin.)
Most importantly, investors should aim to ride the wave of crypto investment in 2025. While market volatility may arise due to fluctuating liquidity, and high-risk leveraged products might not be the best choice, staying in the game and navigating the trends will likely yield satisfying returns. After all, the key is to move forward with the market, trusting that long-term participation will be rewarded.
One Week Until Trump’s Return: Crypto Investment Opportunities and Strategies for 2025 Under a Pro-Crypto Presidency
Key Takesaway
1. Pro-Crypto Presidency: An Investment Opportunity
With Trump’s return to the presidency, his pro-crypto stance presents a promising environment for crypto investments. Immediate pro-crypto signals and policy support are expected to boost market sentiment.
2. Opportunities for Promising Crypto Companies
The anticipated development of regulatory frameworks will create more opportunities for high-quality crypto companies. With improved compliance support, these companies could gain greater investor attention and deliver significant returns.
3. Inflation and Market Volatility Risks
While Trump’s policies may drive innovation, they could also exacerbate inflation concerns, leading to heightened market volatility. The uncertainty around inflation could disrupt the rate-cut cycle, influencing liquidity and the performance of risk assets, including crypto. As a result, having a well-thought-out investment strategy will be crucial—not only to survive periods of high volatility but also to seize potential opportunities and achieve substantial returns in this dynamic environment.
The Return of Trump and His Pathway with Crypto
With less than a week until Donald Trump resumes the presidency, the cryptocurrency market is abuzz with anticipation. Bitcoin's price has surged to unprecedented levels since his election victory in November 2024, reflecting investor optimism about his pro-crypto stance. In previous discussions, I've highlighted significant moves he's made and collaborations with key figures such as Brian Armstrong, Paul Atkins, David Sacks, and Elon Musk, underscoring his genuine support for the crypto industry.
However, Trump's characteristic decisiveness and unconventional approach suggest that his actions might outpace market expectations. Unlike traditional politicians, Trump favors prompt action, even if it requires subsequent adjustments, rather than waiting for "fully mature" plans. In light of this, two developments are anticipated in 2025, potentially occurring sooner than the market expects:
1. Immediate Pro-Crypto Signals: Trump has consistently expressed strong support for cryptocurrencies. During his visit to the New York Stock Exchange on December 12, 2024, he stated, "We’re gonna do something great with crypto... we want to be ahead." Reports indicate that Trump even plans to repeal the SEC's Staff Accounting Bulletin No. 121 (SAB 121) on his first day in office. SAB 121 has been criticized for precluding banks from offering digital asset custody at scale, thereby limiting bank adoption of Bitcoin ETFs and tokenization. While Federal Reserve Chair Jerome Powell has stated that the current Federal Reserve Act does not permit the inclusion of Bitcoin in national reserves—a change that would require a complex legislative process—Trump is expected to continue issuing strong pro-crypto signals from his first day back in the White House.
2. Advancement of Regulatory Frameworks:
Despite the complexities involved in significant initiatives, such as recognizing Bitcoin as a national reserve—which would require extensive legislative deliberation—Trump's administration is expected to take a proactive approach toward developing regulatory frameworks. This could include legislative reforms or the establishment of new departments focused on cryptocurrency oversight.
There are already numerous successful crypto companies that have built large-scale, relatively mature business models and generate substantial profits, even among publicly listed firms. However, many of these companies have opted for token-based models rather than traditional equity structures when engaging with investors. Over the past few years, such companies have faced regulatory challenges rather than support. For instance, Uniswap faced an SEC lawsuit after attempting to distribute dividends to token holders, highlighting the regulatory hurdles that stifle innovation.
The return of the Trump administration brings renewed hope for these companies. A forward-thinking regulatory framework that adapts to the pace of technological progress is essential for their continued growth. With clearer, innovation-friendly policies, crypto businesses can thrive without the constant threat of punitive actions. After all, it’s hard to imagine anyone doing worse than Gensler when it comes to regulatory enforcement.
Trump’s return to power is undoubtedly a significant boost for the crypto industry. Beyond the short-term speculative excitement, the two key factors mentioned above are likely to have a profound and lasting positive impact on the sector’s development. For investors, an emerging, high-potential, and rapidly evolving industry like crypto is an opportunity that cannot be overlooked.
Market Liquidity
On last Monday, January 6th, Bitcoin briefly surged past the 100,000 mark, but like other risk assets, it soon faced a pullback within a day due to stronger-than-expected economic and employment data. While Bitcoin is often touted as an inflation hedge, in the current market environment, it still exhibits a high sensitivity to liquidity conditions, much like other risk assets.
The release of the U.S. December Non-Manufacturing PMI and November’s JOLTS job openings data on January 7th, along with the looming debt ceiling deadline, prompted the market to revise its expectations for rate cuts. Instead of anticipating two rate cuts in 2025, as previously guided during the December FOMC meeting, the market now bets on no rate cuts at all. This shift was reflected in a sharp rise in the 10-year U.S. Treasury yield, which climbed to around 4.7% on the same day.
Adding to this uncertainty is also Trump’s influence. His stance on tariff-related policies has been a long-standing concern regarding inflation. Consequently, the Federal Reserve and other institutions are holding off on any definitive assessments of future inflation pressures or rate cut plans until Trump’s policies are officially enacted. The only area of consensus so far is the potential for a decline in oil prices, whether driven by expectations of a ceasefire in the Russia-Ukraine conflict or other factors related to Trump’s administration. However, beyond oil, there remains significant disagreement on inflation trends. Even Federal Reserve officials have increasingly signaled a more hawkish stance, suggesting fewer rate cuts than previously anticipated. Powell’s confidence in controlling inflation, which was evident in September 2024, now appears to have waned.
Despite concerns about U.S. inflation, the U.S. economy is expected to continue attracting global liquidity in 2025, given its relatively strong performance. Large-cap tech stocks and crypto assets, which remain highly appealing to investors, are likely to be key beneficiaries of this inflow.
For investors, staying on the sidelines in such an uncertain inflationary environment may not be the best strategy. In fact, persistently high inflation over an extended period could become the new normal. It may be time to shift our thinking toward coexisting with high inflation, rather than expecting it to subside anytime soon. In this scenario, Bitcoin, with its anti-inflationary properties, once again demonstrates its value.
In conclusion, unlike bonds, risk assets 's value hasn't fully reflect to every slight change in rate cut expectations yet. Over the next three months, macroeconomic data will likely continue to drive liquidity shifts, resulting in volatile price swings for risk assets. However, in a fundamentally sound environment, such volatility could present opportunities for savvy investors.
2025 Outlook
With Trump’s return to power, 2025 is shaping up to be a year full of opportunities for crypto investors. Progress in regulation could elevate this dynamic, innovative—yet still untamed—market to a new level. Bitcoin’s adoption among mainstream investors is likely to accelerate, and in an environment where prolonged high inflation remains a possibility, Bitcoin’s role as an inflation hedge could become increasingly clear, further boosting its appeal.
Additionally, other high-quality crypto companies are expected to gain more visibility among investors and institutions, potentially delivering impressive returns. Just as the launch of the Bitcoin Spot ETF last year expanded the pool of investors, this year could see a similar expansion in investor interest across promising crypto projects. For readers interested in diving deeper into these opportunities, SoSoValue has recently introduced several indices designed as excellent starting points for understanding key projects and sectors. With lower monitoring and decision-making costs, index investing offers a way to capture sector-wide beta returns—precisely the goal behind the design of such products.
(MAG7.ssi contains the top 7 cryptocurrencies by market capitalization, including Bitcoin.)
Most importantly, investors should aim to ride the wave of crypto investment in 2025. While market volatility may arise due to fluctuating liquidity, and high-risk leveraged products might not be the best choice, staying in the game and navigating the trends will likely yield satisfying returns. After all, the key is to move forward with the market, trusting that long-term participation will be rewarded.
