Donald Trump's return to the White House would be favorable for the cryptocurrency and digital asset sector, Compass Point Research & Trading said in a recent note.
“He supports cryptocurrencies. His campaign accepts donations in cryptocurrencies,” the firm noted.
Last month, Trump met with a group of cryptocurrency miners to discuss how the cryptocurrency industry could benefit U.S. energy production and distribution, artificial intelligence (AI) development, and data centers.
The former president also expressed his desire for all (BTC) mining to be done in the US. His pro-crypto stance has been incorporated into the Republican National Committee’s Platform 2024, which pledges to end the crackdown on cryptocurrencies and block the development of a central bank digital currency (CBDC). The platform also supports self-custody of crypto assets and BTC mining.
Additionally, he selected Sen. JD Vance (R-OH) to be his vice presidential nominee.
Vance, who previously campaigned on a pro-cryptocurrency platform, recently began circulating a bill that would address regulation of cryptocurrencies by the Securities and Exchange Commission (SEC) and the CFTC.
His bill is seen as more industry-friendly than the Financial Technology and Innovation for the 21st Century Act (FIT21), which passed the House of Representatives with broad bipartisan support. Vance also holds between $100,000 and $250,000 worth of BTC.
“With a Trump/Vance administration, the prospects for cryptocurrency legislation becoming law improve significantly. Trump could fast-track cryptocurrency legislation,” Compass Point noted.
Stablecoin legislation is currently expected to lead the crypto movement in Congress. However, Trump’s crypto-friendly approach combined with bipartisan support for FIT21 indicates that broader crypto legislation could become law in 2025 or 2026.
Compass’ report points to bipartisan support as a crucial factor improving the outlook for cryptocurrency policy.
Senate Agriculture Committee (SAC) Chairwoman Debbie Stabenow (D-Mich.) is circulating a cryptocurrency bill to give the CFTC authority over digital assets. While the text of the bill is not yet available, she aims to have the committee vote on it before the August recess.
This move is seen as critical to the bill’s prospects. Stabenow’s collaboration with House Financial Services Committee (HFSC) Chairman Patrick McHenry (R-NC), who successfully passed the FIT21 Act in the House of Representatives, shows the potential for bipartisan cooperation on cryptocurrency regulation.
Looking ahead to 2025, a Trump administration with a Republican-controlled Congress would have a two-year window to pass cryptocurrency legislation, Compass Point said.
The passage of FIT21 and Stabenow’s motivation to move a bill out of committee demonstrate a changing landscape that favors comprehensive crypto legislation.
“This change improves the odds of comprehensive cryptocurrency legislation becoming law in the 119th Congress. We view the odds at greater than 60% and will revisit this outlook following the November elections,” Compass analysts said.
A change in administration could also bring with it a new SEC chair. Hester Peirce, a possible candidate for the post, supports cryptocurrencies, the note notes.
A change in SEC leadership could stem the tide of enforcement actions and speed up the resolution of pending cases, such as the SEC's lawsuit against Coinbase (NASDAQ:). Additionally, it could lead to the end of ongoing cryptocurrency investigations and create an opportunity for the SEC to “define the parameters of when a digital asset is a security.”
