Summary I remain bullish on Bitcoin, reiterating my Buy rating, driven by positive onchain metrics and a favorable political landscape with Trump 2.0. Trump's promises to replace SEC Chairman, create a US Sovereign Bitcoin Reserve, and lower interest rates are key catalysts for Bitcoin's growth. The potential for a Trump administration to support Bitcoin mining rights and self-custody of digital assets further strengthens the bullish outlook. Investors should monitor macroeconomic factors and Trump's ability to deliver on promises, as failure could lead to near-term volatility. Investment Thesis Now that election results have been published showing overwhelming support for a Trump 2.0 presidency, it is time for businesses and investors to realign their outlook and shift their operating strategies that align with the policy framework of the incoming US President while keeping a tab of the broader economic narrative. While this year’s House election results are still to come in, the GOP is quite close to building on its incumbency in the House, pointing to a repeat of 2016 where President Trump was bolstered by support from the GOP that had control in the Senate and the House. This should give President Trump an easier path to execute his agenda as laid out in his 2024 election mandate . Although digital assets and cryptocurrency took up some much smaller real estate in Trump’s 2.0 mandate document, piecing together the incoming president’s commentary from multiple sources indicates that cryptocurrency, headlined by Bitcoin ( BTC-USD ), will play a larger role in President Trump’s second term. Of all the promises that Trump has made on supporting Bitcoin and the cryptocurrency community, I find the likelihood is high for his team to deliver on at least X of those promises next year, which is positive for Bitcoin. In addition, the ongoing strength of Bitcoin’s onchain indicators suggests Bitcoin’s rally is slated to continue higher. I remain bullish on Bitcoin and reiterate my Bullish recommendation. 3 promises That Can Be Delivered By Trump 2.0 Next Year I have repeatedly expressed my confidence in Bitcoin through the year, where I explained how broader macroeconomic indicators were ripe for Bitcoin, and this coincided with onchain indicators that supported the upward trajectory of Bitcoin. In fact, when Bitcoin corrected in August, I published another research note at the time explaining why the correction was unwarranted since it had no relation with the liquidity concerns coming out of Japan’s “Yentervention.” To me, that correction presented a buying opportunity, which I took advantage of and upped my stake in Bitcoin. At Bitcoin’s current juncture, I continue to hold a favorable outlook on Bitcoin and believe the elections will support a positive narrative over the next twelve months as we usher in a new president. In Trump’s election mandate, his team made a small mention of how his government will “defend the right to mine Bitcoin” while ensuring “every American has the right to self-custody of their Digital Assets.” While that doesn’t say as much as the other sections of his mandate, Trump’s commentary from various speaking engagements through this year strongly indicates the direction his governmental framework will work towards when it comes to supporting Bitcoin and other cryptocurrencies. 1. Replacing the SEC Chairman Current SEC chairman Gary Gensler’s policy framework has not been well received by the crypto community, with over 100 enforcement actions against various actors and entities in the crypto community leading to crypto-related fines rising by over 3000% percent in just one year to $4.7B. Chairman Gensler’s term was mired with lawsuits and obscurity and an often comical vagueness that led to confusion among developers, innovators, and investors in the crypto community. A recent example of the back-and-forth by the SEC was when the commission closed its investigation again into its claim of Ethereum ( ETH-USD ) being a security. Trump has strongly indicated multiple times in the past that he would replace Chairman Gensler with someone who is viewed as more friendly towards the crypto network. Although Chairman Gensler’s term ends in June 2026, some market analysts expect Chairman Gensler to step down . Heath Tarbert or Dan Gallagher, both ex-SEC alumni and currently serving as Chief Legal Officers of their respective for-profit crypto companies, are strong contenders and viewed positively by the crypto community. Any change in SEC’s leadership is bound to spark a strong rally among Bitcoin and other cryptocurrencies. 2. The US Government’s own Sovereign Bitcoin Reserve Most recently in the Nashville Bitcoin conference earlier this year, President Trump pledged to create an advisory council responsible for designing “transparent regulatory guidance for the benefit of the entire industry” and has mentioned to do so within 100 days of being elected as President. The inauguration of an advisory council would most likely be another near-term positive catalyst for Bitcoin, although the longer-term framework policies still need to be seen. Still, part of the council’s policy framework would be to create concrete steps towards fortifying the base for a US SBR (Strategic Bitcoin Reserve) that the incoming President envisions to be built on top of the existing Bitcoin custody that law enforcement has confiscated from bad actors in the system. That figure currently stands at ~$15 billion per exhibit B. Trump’s allure for Bitcoin and cryptocurrencies is a reversal in sentiment from his earlier presidency, and, during this year, the incoming president also started accepting cryptocurrency donations and minting his own NFTs before that. Exhibit A: US Government’s custody of Bitcoin currently stands at ~$15 billion. (Arkham) However, it’s not fully clear yet as to how the US government’s current Bitcoin holdings can be absorbed into an SBR since most of the Bitcoin here is confiscated and is likely held to be returned back to the victims of previous crypto scams. Trump has also loosely suggested in the past that these reserves could be used in the future to pay off the $35 trillion national debt. But again, any concrete steps towards building a reserve and at least codifying policies to create the SBR will be a huge catalyst towards Bitcoin’s price. 3. Lower Interest Rates Perhaps the most important factor and one with an immediate impact on Bitcoin’s price would be the movement of interest rates. Trump has been a strong proponent of lowering interest rates, which is part of his larger mandate to lower costs and prices for American consumers. At the National Association of Black Journalists’ annual convention in July this year , he said he would “bring interest rates way down.” Although the governance of interest rates falls under the purview of the Federal Reserve and is outside the authority of a US President, watching interest rates and any other monetary or fiscal catalyst that can impact interest rates is crucial to forming the outlook for Bitcoin, Gold, and any other inflation hedge. Despite this, expect Trump to be watching the interest rate line closely. The US Fed cut interest rates by another 25 bp this week, now targeting the 4.50%-4.75% range. This should have a positive impact on the global money supply, as I have mentioned in the past, which is forward-positive for Bitcoin, as can be seen in the chart below: Exhibit B: As global money supply is set to rise after interest rate cuts, Bitcoin’s momentum should continue into next year. (bGeometrics) Onchain Metrics Look Healthy, Looking For More Strength The correction in Bitcoin prices pushed many investors away from Bitcoin, leading to less than seen activity. However, the number of active addresses increasing is a good positive sign for the network, seeing one of the best increases in months. Even better is the active participation from newer addresses, as seen below. Exhibit C: Bitcoin’s onchain metrics look stable and might be about to get better (Various sources) The monthly transaction volume from these accounts has been lukewarm, but I am encouraged by the spurt in growth seen in the 7-day moving average of on-chain volume, which should be positive for Bitcoin. I expect these trends to continue to get better as the political narrative shapes up based on the points discussed in this research note. Risks & Other Factors To Look For With all the optimism with a new Trump 2.0 tenure about crypto, investors must be cautious about risks associated with some of the changes that could be pushed by the incoming administration. While Trump has repeatedly threatened to fire previous officials, such as the current SEC Chairperson as well as the current Fed Chair, any unceremonious removal that does not follow due procedure might set dangerous precedent and could be seen as a risk by the investor community. While Fed Chair Powell has explicitly stated that “ he wouldn’t resign ,” SEC Chair Gensler has remained quiet so far, which may indicate that he would resign himself, paving the way for the next Trump-appointed SEC Chair. On a broader level, investors must also assess the macroeconomic landscape, especially the global money supply levels, which, in my opinion, remain one of the strongest indicators to assess the forward outlook for Bitcoin. Lastly, and most importantly, if Trump fails to deliver on these promises, investors should expect some near-to-midterm volatility, especially if there are no concrete steps taken by the Trump 2.0 administration within 100 days. Takeaway I believe Bitcoin should be able to move higher, potentially even reaching the 6-figure dollar mark next year, should current onchain metrics sustain and improve from current levels. As incoming President Trump prepares to take over the keys to the White House, I expect some more upward pressure in Bitcoin’s price on the optimism for the incoming President. A Trump 2.0 should be generally favorable for Bitcoin and crypto currencies moving forward, and I expect the next 3-4 months to experience some further upside in Bitcoin as election promises fall into delivery mode. Im reiterating my Buy rating on Bitcoin.
