Trump Elected as US President: Cryptocurrency Welcomes New Opportunities for Development
On November 6, 2024, Donald Trump was successfully elected as the next US president, which not only shook the global political landscape, but also injected a shot in the arm into the cryptocurrency market.
Trump showed strong support for cryptocurrency during the campaign, promising to promote relevant policies to promote the industry's development. With the announcement of Trump's election, the cryptocurrency market quickly responded, with prices of major cryptocurrencies such as Bitcoin and Ethereum significantly rising, and related concept stocks also experiencing rapid stock price increases. Under Trump's leadership, the cryptocurrency industry may usher in unprecedented development opportunities in the US.
What impact will Trump's successful election have on cryptocurrency?
Firstly, from an attitude perspective, Trump's current attitude towards cryptocurrency is very positive, and his successful election has the potential to promote the development of the cryptocurrency industry.
Trump's attitude towards cryptocurrency has undergone a complex evolution. During his initial term in office, the Trump administration held a skeptical and negative attitude towards cryptocurrency, believing that it lacked intrinsic value and was easily used for illegal activities.
In the 2024 election, Trump's attitude underwent a 180-degree change. He not only publicly supported the development of cryptocurrency and made statements such as "ensuring that the future of cryptocurrency and Bitcoin happens in the US", but also accepted cryptocurrency donations in his campaign in the hope of gaining voter support.
At the same time, we can also glimpse the future development of the cryptocurrency industry from Trump's campaign manifesto and governing direction.
The Trump administration will continue to support innovation in financial technology, including blockchain technology and cryptocurrency. This may be reflected in increased research and development funding, strengthened patent protection, and cooperation with the private sector.
The Trump administration explicitly mentioned its support for cryptocurrency in the Republican manifesto: "The Republican Party will end the Democratic Party's illegal and anti-US cryptocurrency crackdown, and oppose the creation of a central bank digital currency. We will defend the right to mine Bitcoin and ensure that every US citizen has the right to keep their digital assets safe and trade them without government surveillance and control."
Therefore, judging from Trump's attitude and Republican manifesto, Trump's election will benefit the development of the cryptocurrency industry. The "tax cuts", "low interest rates", "weak dollar", and "local economic protection" favored by the Trump administration may all benefit the cryptocurrency industry with "anti-inflation" and "safe haven" attributes.
US stock market:
1. $iShares Bitcoin Trust(IBIT)$
Published by BlackRock, one of the world's largest asset management companies, iShares Bitcoin Trust is the most traded and traded ETF in this type. As a product under a reputable asset management company, iShares Bitcoin Trust can attract investors who trust the BlackRock brand.
Features: The ETF has strong compliance, and investors can buy and sell IBIT shares at any time during normal trading hours, with relatively high liquidity.
Risk: Due to the limited assets held in digital currencies, the ETF may have high volatility and uncertainty; due to cost and timeliness limitations, the ETF may not always accurately reflect the price trend of Bitcoin.
2. $Fidelity Wise Origin Bitcoin Fund(FBTC)$
It was published by Fidelity Investments. It was popular among investors and attracted a lot of money.
Features: This ETF offers lower fee ratios and professional ETF management. In addition, similar to IBIT, this ETF can be bought and sold at any time during normal trading hours. At the same time, Fidelity began exploring the digital currency field in 2014 and has a deep research foundation.
Risk: Similar to IBIT, there is volatility and possible errors.
3. $Grayscale Bitcoin Trust(GBTC)$
The ETF is published by Grayscale Investments and currently has the highest total market value in the category. Grayscale Investments is a company focused on digital asset investment, while GBTC is one of the earliest products that allows investors to indirectly invest in Bitcoin through traditional financial accounts.
Features: GBTC's Net Asset Value is based on the value of its Bitcoin holdings, but it does not track the price of Bitcoin in real time, nor is it listed on an exchange for instant trading. However, it can be traded on the OTC market.
Risk: Compared to other spot ETFs, GBTC's redemption mechanism is limited, leading to liquidity issues and potential price deviations. In addition, its expense ratio is slightly higher, reducing investors' returns.
Hong Kong Stock Market:
Managed by Jia Shi International Asset Management Co., Ltd. The ETF directly invests in Bitcoin and aims to track the price performance of Bitcoin, minus fees and other expenses. Currently, the ETF has the largest trading volume and turnover in the sector.
Features: 100% of the ETF's funds are invested in Bitcoin. This provides investors with an opportunity to directly access the Bitcoin market without the need to hold or store cryptocurrency themselves. It is suitable for investors who have high requirements for security and convenience and focus on Bitcoin.
Risk: There may be tracking errors, that is, the performance of ETFs may not fully replicate the actual price changes of Bitcoin.
Managed by China Asset Management (Hong Kong). Similar to the Harvest Bitcoin ETF, the Huaxia Bitcoin ETF also aims to track the performance of Bitcoin prices.
Features: It also provides a channel for investing in Bitcoin through traditional Financial Marekt, with certain brand recognition and trust. At the same time, this ETF holds the highest market value in the same category.
Risk: Like all single Bitcoin ETFs, it faces potential tracking error issues.
3. $Huaxia Ether ( 03046.HK ) $
Also managed by China Asset Management (Hong Kong), the ETF tracks the price performance of Ethereum.
Features: This ETF focuses on Ethereum, unlike the previous two that focused on Bitcoin. It provides an investment channel for the Ethereum ecosystem and its native tokens. This provides investors with the opportunity to diversify their cryptocurrency investment portfolios, especially for investors who are optimistic about the multi-purpose blockchain platform Ethereum.
Risk: Similar to Bitcoin, the price of Ethereum is also highly volatile.
Overall, digital currency spot ETFs have the advantages of high liquidity and convenient trading, relying on regulation and professional management to ensure security and eliminate private key management risks. However, they also have some shortcomings: price tracking may not be accurate, affected by the high volatility of digital assets, prices are prone to large fluctuations, and management fees are involved, affecting returns. Investing in cryptocurrency concept stocks requires selecting high-quality individual stocks to obtain excess returns.
Therefore, investors can complete transactions based on their own investment preferences and matching varieties.
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