Trump, Bitcoin, and the race for tokenized capital markets
Trump's pro-Bitcoin stance may redefine the US as the 'crypto capital,' sparking a tokenization race between developed and emerging markets.
Donald Trump’s re-election victory and the massive success of the Bitcoin ETFs earlier in the year have been major catalysts behind Bitcoin’s ascent towards $100,000. Gains over the last few weeks have been driven by the anticipation of Trump 2.0 making the US the ‘crypto capital of the world’ and a financial services industry getting its first real taste of ‘number go up’.
While the full details are yet to emerge, the number of Bitcoiners in Trump’s inner circle – including D.O.G.E. head Elon Musk – suggest Trump could come good on his crypto election promises. Fostering a more accommodative approach to banking, self-custody, and digital assets could have massive global knock-on effects. The success of the Bitcoin ETFs did much to destigmatize Bitcoin amongst institutional investors; US government support would likely do the same thing amongst governments.
A pro-Bitcoin administration will almost certainly drive prices higher and result in more countries following suit. In my Bitcoin pitch, I always avoided the end game to people in suits—institutional investors, regulators, and policymakers—but suddenly, hyperbitcoinzation and hash wars look entirely possible.
What does this mean for Bitcoin first movers like El Salvador? Or the Bitcoin curious like Argentina? It’s hard to say. On the one hand, as the largest contributor and shareholder in the IMF, a more accommodative US stance on Bitcoin would likely end the IMF’s opposition to things like El Salvador’s 2021 Bitcoin law. On the other hand, it could steal a lot of thunder from smaller economies, leveraging Bitcoin to attract human and financial capital.