Analysis of the impact of the US elections on the future of the cryptocurrency market

Market outlook

With a presidency of TrumpThe market anticipates greater clarity for the cryptocurrencies, both at the administrative and legislative levels. Just a few weeks ago, prediction markets showed almost equal probabilities between Trump and HarrisFrom the day before the elections, bitcoin and ethereum They have risen 20% and 32%, respectively, which we believe reflects a price adjustment due to Trump's victory. The combination of a clearly pro-crypto stance by the US administration, along with bipartisan progress on cryptocurrencies in Congress, It positions the industry for greater regulatory clarity in the U.S.

 

The market would welcome a complete Republican victory, as it increases the chances of a cryptocurrency innovation agenda with fewer delays.

 

It should be noted that cryptocurrencies are a bipartisan issue. However, the Administration's tone influences the markets. This is the first time a US president has openly supported a progressive cryptocurrency agenda. The Trump administration's openness to the sector offers new positive catalysts, such as the possibility of a strategic reserve of Bitcoin and revisions to more conservative tokenomics policies. We expect a very favorable environment in the coming years thanks to a combination of: (a) strong results in favor of cryptocurrencies in these elections; (b) a demographic shift towards younger generations; and (c) the growth of resources in the industry that support cryptocurrency adoption.

 

Future outlook

Macro

 

Cryptocurrency markets are not immune to macroeconomic conditionsGlobal interest rates are expected to fall further through 2025, and financial markets are reacting positively to an administration with a pro-business and pro-growth agenda. Risk assets, including cryptocurrencies, are finding greater support in these environments, and a slight reduction in interest rates is currently projected for 2025, given the potential for rising inflation.

 

Cryptocurrencies

From a crypto market perspective, we're observing a typical cycle unfolding. Bitcoin is leading this rally, which usually precedes a flow of capital into other blockchains like Ethereum and Solana, before rotating into altcoins. We haven't yet seen any indicators of FOMO (fear of being left out) at peak levels, such as registration activity, app store positions, Google search trends, and network congestion, among others.

 

*This does not constitute investment advice.

 

Thomas Perfumo

Strategy Director at Kraken