What the crypto market actually wants from a Trump presidency

• Donald Trump courted bitcoin lovers by branding himself the "crypto president."
• The industry hopes his second term will bring regulatory changes and give bitcoin a role in the economy.

Donald Trump flipped from bitcoin cynic to "crypto president" and it paid off big.

Trump disparaged digital assets as recently as just a few years ago, describing bitcoin as a scam, and yet his latest electoral win was fueled in no small part by crypto-friendly pledges that unlocked millions in campaign funding.

With Trump headed back to the White House, it's now the industry's turn to see if its bets on a second term paid off. Here's what they're want to see.

Regulatory overhaul

One of the root themes of Trump's crypto platform is a promise to sweep aside regulatory restrictions that have hung over the industry in recent years.

Criticism has been loud over the Biden administration's handling of the sector, characterized by heated confrontations between the Securities and Exchange Commission and major crypto players.

"Those guys, I mean, they just put so much uncertainty in this entire industry. It was unbelievable. There was no clear guidance, no regulations," said Tim Kravchunovsky, CEO of Chirp, a decentralized telecommunications company.

Speaking with Business Insider, he added that regulatory conflict has pushed crypto business out of the US, costing Washington its competitive edge.

Matt Mena, crypto research strategist at 21Shares, agreed with that sentiment.

"By creating a more welcoming regulatory environment, this approach could draw back projects and founders who have left the country due to regulatory uncertainty, generating thousands of new jobs and millions in tax revenue, bolstering the economy while advancing the crypto sector," he told BI over email.

To this end, the industry anticipates that Trump will replace regulatory heads with more crypto-friendly people. The president-elect is already surrounded by such figures, Mena said, such as Elon Musk, JD Vance, Robert F. Kennedy, and Howard Lutnick.

Meanwhile, to make Trump's plan of turning the US into a "crypto hub" possible,Kravchunovsky suggested that Washington could provide incentives such as federal grants and tax cuts.

Crypto bills

On the legislative front, crypto players will also be watching for the repeal of SAB 121 and the passage of several key bills,

SAB 121, an SEC policy document kept in place by the Biden administration, discourages US lenders from acting as crypto custiodians, given that it requires them to hold an equivalent amount of cash against their crypto holdings. It's removal would free institutional investors to further adopt digital assets.

Mena also cited anticipation around FIT21, an act aiming to clarify the regulatory roles around digital assets. Consumer protections would also strengthen under this bill, he said.

Meanwhile, Trump's administration could accelerate progress on three meaningful pieces of stablecoin legislation, which aim to set up guardrails around future stablecoin issuance. These dollar-pegged crypto assets are increasingly used for purposes similar to traditional finance, Standard Chartered said in a note on Friday.

A bitcoin reserve?

Since Trump's victory, speculation has jumped that a strategic bitcoin reserve could be in on the way.

Though the President-elect has not specifically voiced such a plan, the idea that his administration would buy bitcoin as a reserve asset has created enthusiasm among crypto bulls.

"We're already seeing that that [crypto's] gaining trust, and it's gaining trust within institutions and countries. More and more countries are adopting it. So I don't think it's a matter of years. I think it's a matter of months," Kravchunovsky said.

Mena sees the price of bitcoin soaring to $1 million "almost overnight," if a strategic reserve were to be established. The scenario would prompt other nations to build up their own reserves, pushing bitcoin's total market cap 13 times higher.

Meanwhile, Standard Chartered head of FX research Geoff Kendrick considers a bitcoin reserve fund as a high-impact development with a low probability of happening for now.

Investors should instead pay attention to Trump's separate promise to cease all sales of government bitcoin. If this happens, that could mean a sizeable upswing in the price of the token, he wrote.

Crypto's time to shine

In whatever way the industry changes under Trump, one thing feels certain: the election has cemented the crypto markets place in the mainstream.

"Crypto is now essentially legal in the U.S., marking a major turning point for the industry," Mena wrote.

According to Kendrick, crypto-friendly adjustments have the potential to drive the total market value of the cryptocurrency market to $10 trillion by the end of 2026, a major jump from the current $2.5 trillion level.

He reiterated his expectation that bitcoin will hit $200,000 by the next year's end.