Don't Be So Certain! Trump's Presidency May Not Be Good For Bitcoin At All

Wallstreet InsightFriday, Nov 15, 2024 4:38 am ET

1min read

Indeed, Bitcoin price has surged about 30% after Trump claimed his victory in the presidential election, but James Mackintosh, a senior market columnist, believes that Bitcoin may not benefit from more relaxed regulation, as Bitcoin itself is almost free from regulatory pressure. Relaxing regulations could lead to an increase in demand for other cryptocurrencies, potentially causing capital outflow from the Bitcoin market.

Mackintosh explained that more relaxed regulations drive up the prices of goods by attracting more buyers, especially for cryptocurrencies—which have almost no fundamental support and are entirely determined by supply and investor sentiment-driven demand. Therefore, more buyers mean higher prices.

Furthermore, Mackintosh refuted three reasons why some investors are bullish on Bitcoin: First, as mentioned above, Trump's relaxation of cryptocurrency regulation does not benefit Bitcoin; Second, Trump's promised strategic national Bitcoin reserve does not align with the economic needs of the United States and may not be realized; Lastly, Bitcoin is not a good inflation hedge and cannot offset the significant inflation that Trump might bring.

Currently, Bitcoin's total market value has surpassed all companies except the six largest publicly traded U.S. companies. As of press time, Bitcoin is up 1.69% today, at $88,745.47 per coin.

However, as Bitcoin added nearly $500 billion in market value in less than two weeks since election night, some other cryptocurrencies like altcoins and Ethereum have lagged behind in value increase.

Even many investors try to explain such difference, including citing reasons like Bitcoin is the largest cryptocurrency, Trump only promised to establish a 'strategic national Bitcoin reserve' instead of a reserve for all cryptos, and Bitcoin is a good asset to hedge inflation, Mackintosh is definitely not buying them.

In his opinion, Bitcoin does not align with the economic needs of the United States, and certainly does not have the credibility to support an establishment of exchange reserves.

Bitcoin is about animal spirits, not plodding economic analysis. No wonder it likes Trump, Mackintosh wrote.

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