“It’s time for Trump 2.0 to deliver on his promises,” says Uttam Dey.
A failure to fulfill Trump’s promises would generate volatility in the market.
A week ago Donald Trump won the presidential elections in the United States. The “Trump 2.0” mandate promises a boost for bitcoin (BTC) and cryptocurrencies. According to financial analyst Uttam Dey, bitcoin will very easily push towards $100,000 and beyond.
Trump’s return to power, this time with a favorable stance towards crypto assets, will inspire companies and investors to adjust their strategies to align with the incoming president’s policies and make the most of the “broader economic narrative” that his government seeks to establish, Dey explains.
The president-elect’s comments during his political campaign allow us to anticipate that bitcoin (BTC) will have a more prominent role in his second term.
Uttam Dey emphasizes in his analysis that promises of support for bitcoin could, at least in three key points, materialize next year, which could act as a catalyst for the rise in its value.
dey maintains an optimistic outlook on bitcoin and confirms its bullish recommendationthus suggesting a continuation of its rally.
The digital currency that is approaching $90,000 could get an extra push if the team of the president elected on November 5 implements some of his “pro-crypto” proposals.
Anyway, at the rate that bitcoin is rising, it wouldn’t be unusual for bitcoin to reach or exceed $100,000 this year (this month, perhaps?).
The 3 promises of “Trump 2.0” that could come true
Uttam Dey outlines three promises Trump could make to solidify his support for bitcoin:
1. Leadership change at the SEC
The current chairman of the Securities and Exchange Commission (SEC), Gary Gensler, has imposed more than 100 enforcement actions against the industry of cryptocurrencies, accumulating fines of more than $4.7 billion in one year, which generated an atmosphere of tension between regulators and investors.
“Gensler’s tenure was plagued by lawsuits, obscurity and an often comical vagueness that generated confusion among developers, innovators and investors in the cryptocurrency community,” says the analyst.
A recent example of the SEC’s comings and goings was when the commission again closed its investigation on his claim that ether (ETH), Ethereum’s native cryptocurrency, is a security (security) not registered.
Another that stands out is the lawsuit against Binance, the largest cryptocurrency exchange in the world, which led to Changpeng Zao, the company’s former CEO, being imprisoned for four months, as reported by CriptoNoticias.
Trump suggested on the campaign trail that he considers replacing Gensler with someone more friendly toward digital assets.
Although President Gensler’s term ends in June 2026, it is possible that he will resign before the end of the year.
Those who are emerging for the position are Heath Tarbert and Dan Gallagher, both were part of the SEC in the past and serve as chief legal officers of their respective cryptocurrency-related companies, Circle and Robinhood respectively.
“These are strong contenders and are viewed positively by the cryptocurrency community. For this reason, any change in the leadership of the SEC will surely cause a strong rally between bitcoin and other cryptocurrencies,” says the analyst.
2. Strategic bitcoin reserve
At the Bitcoin 2024 conference, Trump proposed the creation of an advisory council tasked with designing “transparent regulatory guidance for the benefit of the entire industry” and mentioned that He would do so within 100 days of being elected president..
“The inauguration of an advisory council would likely be another positive short-term catalyst for bitcoin, although the long-term policy framework remains to be seen.”
Uttam Dey, financial analyst.
One of the pillars of this proposal is the possible constitution of a Strategic Bitcoin Reserve (SBR), made up in part of bitcoin reserves that US authorities have seized from fraudulent entities.
However, it is still not entirely clear how the US government’s current bitcoin reserves can be absorbed by a reserve, as much of that BTC is likely to be held to be returned to scam victims.
“Any concrete step towards creating a reserve and at least codifying policies to create the SBR will be a great catalyst for the price of bitcoin,” explains the analyst.
In the following graph you can see that currently The BTC funds held by the US government are valued at 15 billion dollars.
3. Reduction of interest rates
For Dey, interest rate policy is the crucial element for the future of bitcoin.
Trump has expressed his support to a drastic reduction in interest rateswhich could spur demand for assets like bitcoin.
A rate cut usually means it is cheaper to borrow. When borrowing costs decrease, investors have more incentives to take money borrowed and place it in assets considered risky, such as bitcoin. This can drive demand for BTC, which tends to be reflected in an increase in its price.
Although the final decision on rates rests with the Federal Reserve (Fed), the new president will have an active role in influencing the economic context, a factor that could also be key for the cryptocurrency investor community.
The current administration of outgoing president, Joe Biden, has already made progress in this regard. The Fed cut interest rates by another 25 basis points last week, and they are now targeting the 4.50% to 4.75% range.
This should have a positive impact on the global money supply, which is positive for bitcoin.
Risks and precautions on the road
Although expectations are high, Dey warns that investors should be aware of the risks associated to the Trump administration.
Although Federal Reserve Chairman Powell has explicitly stated that he “would not resign,” SEC Chairman Genslerhas remained silent until now, which may indicate that he himself would resignpaving the way for the next SEC chairman appointed by Trump, the analyst says.
Trump has expressed his intention to replace key officials such as SEC Chairman and Fed Chairman Jerome Powell, but the ways in which this is done matter.
“Any unceremonious dismissal that does not follow due procedure could set a dangerous precedent and could be viewed as a risk by the investment community.”
Uttam Dey, financial analyst.
Additionally, Dey urges investors to evaluate the macroeconomic outlook, especially global money supply levels, which he believes remain one of the strongest indicators for assessing bitcoin’s future prospects.
Lastly, and most importantly, if Trump does not deliver on these promises, investors should expect some volatility in the short and medium term, especially if the “Trump 2.0” administration does not take concrete action within the first 100 days.
Clarification: This article is written for informational purposes. It does not constitute an investment recommendation or financial advice. Each investor is responsible for conducting his or her own research.