On Saturday, July 13, 2024, former U.S. President Donald Trump was the target of a shocking assassination attempt during a campaign rally in Pennsylvania. The incident, which saw Trump narrowly escape death, has sent shockwaves through the political landscape and financial markets, including the cryptocurrency sector, with Bitcoin and friends immediately surging in price in its wake.
This article examines the events surrounding the assassination attempt and its subsequent immediate and long term impact on the crypto markets.
The Trump Assassination Attempt
During a campaign event in Butler, Pennsylvania, a gunman attempted to assassinate Donald Trump, the Republican nominee for the 2024 U.S. presidential election as he was addressing supporters. Trump was shot in the ear but survived the attack and was ushered off the stage waving a defiant fist in the air, which was captured by a photographer for an iconic image. His campaign reported that he was doing well following the incident.
Public sentiment has shifted dramatically in favor of Trump since the incident. He is now the 60% favorite according to betting markets in the presidential election in November.
Immediate Market Reaction
In the aftermath of the assassination attempt, cryptocurrency markets experienced a significant surge, after weeks of decline due several factors, including summer holidays, bearish market pressure caused by Germany selling seized Bitcoin, as well the announcement that Mt Gox would begin returning stolen BTC to victims of the 2014 hack.
After dropping as low as $53k during early July, Bitcoin (BTC), the world’s leading cryptocurrency and the one that dictates the overall market confidence in digital assets, saw a sharp increase in value, rising by more than 25% to reach $66.4k by Friday, July 19. This marked its highest level in four weeks and represented a year-to-date gain of approximately 54%. Other cryptocurrencies also benefited from the market movement, with Ethereum (ETH) rising 12.1% to $3,488.
The surge in crypto prices was not isolated to major currencies. Meme tokens associated with Trump also experienced substantial gains. For instance, MAGA leapt from around $6.35 to a brief peak over $9.50, the satirical TREMP token is up 15$ this week. Conversely, BODEN, a joke asset named after President Joe Biden, has declined by about 18%.
Hundreds of pro-Trump memecoins were launched in the days after the shooting, most pumping and dumping within hours.
5 Reasons For The Trump Shooting Crypto Rally
Several factors contributed to the cryptocurrency market's positive reaction to the assassination attempt:
1. Increased Trump Victory Odds
The incident appears to have bolstered Trump's chances of winning the presidency. Betting markets and political analysts suggest that the attack may garner sympathy votes and mobilize his base to vote. On the Polymarket prediction platform, the probability of Trump winning the presidency jumped to an all-time high of 70% following the incident.
2. Trump's Pro-Crypto Stance
After slamming crypto during his first term, Trump has made a remarkable recent U-turn on crypto after it became clear that the tens of millions of Americans owning crypto could ultimately decide the next president. As a result, Joe Biden flip flopped soon after to also embrace crypto and the SEC stunningly approved a spot Ethereum ETF.
Throughout his campaign so far, Trump has positioned himself as a champion of cryptocurrency. He has hosted cryptocurrency industry executives at Mar-a-Lago, and expressed enthusiasm for Bitcoin mining in the USA. Trump's campaign is also the first from a major U.S. political party to accept cryptocurrency payments, signaling a potential shift in the regulatory landscape if he were to win the election.
3. Anticipated Regulatory Changes
Investors speculate that a Trump presidency could lead to a more favorable regulatory environment for cryptocurrencies. Trump has criticized Democratic attempts to regulate the crypto sector through the SEC and the controversial Operation Chokepoint 2.0 which has seen an exodus of Web3 firms from the USA, leading many to believe his administration would adopt a lighter touch approach to oversight.
4. Economic Policy Expectations
Trump's previous tenure was marked by tax cuts and deregulation. Investors anticipate similar policies in a potential second term, which could drive up deficits and inflation. Such economic conditions often lead investors to seek alternative assets like cryptocurrencies as a hedge.
5. Trump’s VP pick is pro-crypto
The crypto market rally gained further momentum on Monday, July 15, when Trump announced 39 year-old Senator J.D. Vance of Ohio as his running mate. Vance, known for his tech-savvy background and pro-crypto stance, has further energized the digital asset community. He previously declared $250k in Bitcoin holdings and is an outspoken critic of crypto’s arch-enemy, SEC chairman Gary Gensler.
Vance's selection is seen as a strategic move to appeal to both traditional conservatives and the tech-oriented younger demographic.
The Trump-Vance Ticket and What It Means for Crypto
Vance's pro-crypto credentials include:
- Personal investment in Bitcoin through Coinbase, valued between $100,001 and $250,000
- Support for bills promoting cryptocurrency innovation in the Senate
- Opposing increased regulatory scrutiny of the crypto industry
- Drafting legislation to overhaul digital asset regulation
The Trump-Vance ticket is viewed favorably by many in the crypto and tech industries. Notable figures – such as Peter Thiel (a mentor of Vance), Marc Andreessen (who has now also endorsed Trump publicly), Ben Horowitz, and the Winklevoss twins – have expressed support for the candidates. This backing from influential tech personalities adds credibility to the ticket's pro-crypto stance.
USA and Crypto: Potential Trump Policy Shifts
Experts anticipate several policy changes under a potential Trump-Vance administration that could benefit the cryptocurrency market:
1. Deregulation: A return to Trump's previous deregulatory approach could create a more favorable environment for crypto entrepreneurs and investors.
2. Currency Devaluation: Vance has advocated for a weaker dollar, which could indirectly boost Bitcoin's value proposition as a hedge against currency devaluation.
3. Crypto-Friendly Banking Reforms: Policies making it easier for traditional institutions to hold their clients crypto in custody could lead to broader adoption.
4. Redefining Crypto Assets: A potential shift in how cryptocurrencies are classified could impact their regulatory treatment. At present only Bitcoin and now Ethereum have been greenlit as non-securities.
5. Antitrust Actions Against Big Tech: Vance supports antitrust measures against major tech companies, and this could create opportunities for blockchain-based Web3 alternatives, which hold huge potential to disrupt the monopoly of Web2 giants.
Market Outlook and Expert Opinions
While the crypto market has responded positively to these political developments, opinions vary on the long-term implications:
Matthew Sigel, head of digital assets research at VanEck, believes the Trump-Vance ticket represents a significant shift toward a more crypto-friendly regulatory environment. He suggests their pro-business stance could pave the way for a more favorable environment for crypto entrepreneurs and investors.
Mark Cuban, billionaire entrepreneur and investor, posited on social media in a long post that the support from Silicon Valley for the Trump-Vance ticket might be motivated by potential benefits to Bitcoin. He argues that lower tax rates and tariffs, combined with global uncertainty about the USA’s geopolitical role, could accelerate Bitcoin's price and potentially establish Bitcoin as a global ’safe haven’ currency.
Conclusion
The assassination attempt on Donald Trump and the subsequent selection of J.D. Vance as his running mate have provided an unlikely shot-in-the-arm for the cryptocurrency markets. The rally in Bitcoin and other digital assets reflects renewed investor optimism about the future of the space, which may soon be under more crypto-friendly regulations.
There is a near-consensus opinion that the Fed will reduce interest rates by a quarter of a percentage point, or 25 basis points, for the first time since the end of 2021, so the stars seem to be aligning for Bitcoin and its children.