Crypto for Advisors: Post Election Edition

The 47th president of the U.S. will be Donald Trump, and bitcoin reached a new all -time high during the vote count.

In today’s issue, Jason Leibowitz from Hashnote looks at Trump’s policies, how they could impact the crypto industry and how the market is already responding to the results.

Then, Roshan Dharia, CEO of Paxful, answers questions about crypto and the regulatory environment in Ask an Expert.

You’re reading Crypto for Advisors, CoinDesk’s weekly newsletter that unpacks digital assets for financial advisors. Subscribe here to get it every Thursday.

On election night, Nov. 5, bitcoin surged to an all-time high, breaking past $75,000 as Trump claimed victory. With a Republican sweep across Congress, this outcome is seen by the crypto community as the most favorable result for digital assets. Trump’s vocal support for crypto, along with his criticism of the SEC’s restrictive stance, has fueled expectations for a regulatory landscape that encourages innovation and growth. The market’s swift reaction, even before the race was called, underscores crypto’s role as a 24/7 barometer of major events.

Source: TradingView

Historic Gains and Regulatory Shifts

As election results rolled in, bitcoin soared on expectations of regulatory clarity and a more supportive environment under a Trump administration. Trump, who has been vocal about fostering innovation and critical of S.E.C. Chair Gary Gensler’s handling of crypto regulation, is anticipated to bring long-awaited clarity to digital asset policy.

This surge reflects growing institutional confidence. With a valuation nearing $2.5 trillion – boosted by bitcoin and ether ETFs this year — crypto is rapidly becoming a core institutional allocation. Its deep liquidity and around-the-clock trading uniquely position crypto as an immediate gauge of global sentiment, exemplified on election night.

Polymarket’s Predictive Power

Blockchain-based prediction markets like Polymarket introduced a new level of accuracy to election forecasting, often outpacing traditional polls. Polymarket’s odds consistently leaned in favor of Trump, offering an early and sharper gauge of public sentiment. By election night, as Trump led in electoral votes, Polymarket’s odds of his victory reached 90% — even before he crossed the critical 200-vote threshold on his way to the required 270.

With over $3.2 billion wagered on the election outcome, Polymarket played a pivotal role in high-stakes prediction. Its user-backed odds proved exceptionally reliable, underscoring the potential of decentralized prediction markets as powerful, and perhaps even superior, tools in event forecasting.

Source: Protos

Source: Polymarket

As is evident from the Polymarket chart above, President Trump’s victory was priced in, hours before it was official.

Crypto as a Real-Time Market Indicator

This election isn’t the first time crypto markets have responded sharply to political developments. After a failed assassination attempt on Trump on July 13, bitcoin rallied over 12% that weekend — while traditional markets remained closed. This price surge reflected market confidence in Trump’s resilience, strengthening his candidacy among investors and voters alike.

Bitcoin’s reactions during pivotal moments illustrate crypto’s unique role as a real-time indicator. Unlike traditional assets, crypto trades continuously capture and reflect global shifts instantly. The election night rally exemplifies how crypto acts as a rapid-response gauge for unfolding events.

A New Era for DeFi

With regulatory reform anticipated, the convergence of TradFi and DeFi is now underway. Bitcoin, often referred to as “digital gold,” has historically held its place as a non-income-producing store of value, similar to physical gold. However, because of its digital nature, bitcoin has broken free from the limitations of a traditional store of value. Advanced strategies like staking, wrapping, and innovative twists on digital options vaults have transformed Bitcoin from a passive, buy-and-hold asset into one capable of generating yield.

These yield-enhancing strategies bring a new dimension to bitcoin, offering income streams and greater return potential—an evolution unimaginable with traditional gold. This maturation of yield-generating mechanisms marks a significant shift, encouraging new capital inflows and fueling further innovation in digital assets for both institutional and retail investors.

– Jason Leibowitz, head of private wealth, Hashnote

Q. What do you make of the heated U.S. presidential election season, looking at it from a crypto veteran’s perspective?

It took crypto almost a decade and a half to feature in serious political and, more importantly, policy-level conversations. All that “Wild West,” “magic internet money” stuff is in the past.

Many politicians who leveled baseless allegations against crypto are now some of its strongest proponents and allies.

Donald Trump, for instance, has come a long way from not being a “fan of bitcoin and other cryptocurrencies” to advising folks at Bitcoin Nashville to “never sell” their bitcoin.

The Democrats and Vice President Kamala Harris, the Democratic candidate, also signaled a more open-minded stance on crypto, moving away from the Biden administration’s combative regulatory approach towards the industry.

At the same time, Fairshake PAC, Coinbureau and other Web3 lobbying organizations have become politically influential and extraordinarily well-funded with time and are now claiming to speak for an estimated 50-90 million U.S.-based cryptocurrency holders.

All this is great for short-term adoption, and with consumer interest and trust in digital assets continuing to grow, we expect candidates and, eventually, regulators to move the U.S. towards a gradually more crypto-friendly path post-November.

Q. Are US politicians generally pro or anti-crypto? How do you see local regulations evolving?

Beyond the parties, U.S. politicians range from enthusiasm to loathing regarding crypto, with recent national policy set mainly by two of the industry’s most outspoken critics. Looking to the present, with the cryptocurrency industry now so politically organized, both parties are becoming more pro-crypto to woo voters ahead of the November election.

We should continue to bet on political self-interest even after election day, as the threat of regulatory competition between countries like Singapore, China, or the Bahamas attracts possibly billion-dollar Web3 companies from American markets.

As pioneers in this space, we champion many of cryptocurrency’s core goals — decentralization, personal autonomy, privacy, freedom of association – that are at their core the same values enshrined in our Constitution.

Q. What’s next for industry stakeholders in this regulatory environment? How should they prepare?

Politically, things are pretty loud, so it’s important to discern the signal from the noise.

For example, the SEC’s approvals of BTC and ETH ETFs have as much political significance as promises in either party’s manifesto. The same can be said of court decisions in favor of and against cryptocurrency companies vs. U.S. regulators — like in the case of Ripple, Kraken and now Uniswap and Consensys.

Institutional participation has grown due to both added confidence in the fundamental crypto assets and new financial tools to access these assets.

At the same time, new consolidations in the Web3 space are making the largest companies in crypto the single providers for tools covering institutional and retail clients alike. As these domestic buyer groups become fully served, it’ll become important for major U.S. Web3 and fintech companies to look beyond their local market.

Web3 companies and contributors are best positioned to take advantage of the borderless and bankless nature of cryptocurrencies, making expansion into rapidly growing digital asset markets like Vietnam, Colombia, or Kenya a major opportunity.

– Roshan Dharia, CEO, Paxful

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