An influential economist suggests that cryptocurrency enthusiasts should consider the potential impact of a “Trump Trade” when making investment decisions.
Alex Krüger shares with his 177,300 followers on the social media platform X that if former president Donald Trump wins the November election, it could have a positive effect on the crypto market.
“Reason: Trump’s administration might introduce favorable regulations for cryptocurrencies, encouraging innovation and adoption.”
Krüger predicts that a future Trump Administration would likely implement tax cuts and increase government spending, leading to “higher inflation expectations and rising long-term interest rates, resulting in a steeper yield curve.”
A steep yield curve, indicating that long-term bond yields are increasing faster than short-term government-backed securities, is often seen in the early stages of an economic expansion.
The economist also anticipates that Trump would focus on deregulation, which could benefit industries such as oil, gas, steel, coal, and finance.
“Financial deregulation could lower compliance costs and boost profitability for financial institutions. A steeper yield curve is also advantageous for financial institutions, as they profit from the wider spread between short-term borrowing rates and long-term lending rates.”
Krüger believes that a Trump victory could have a negative impact on renewable energy and healthcare sectors.
“You can adjust your trading strategies in anticipation of a Trump win, regardless of your personal views. Let the probabilities guide your decisions, not your political beliefs.”
In his efforts to raise campaign funds and distinguish himself from President Joe Biden, Trump, who recently survived an assassination attempt, has positioned himself as a pro-crypto candidate this year, despite his past criticisms of digital assets.
In 2018, Trump reportedly instructed then-Treasury Secretary Steven Mnuchin to investigate Bitcoin for fraud while he was in office.
Trump’s 2024 presidential campaign has started accepting cryptocurrency donations, including $2 million worth of Bitcoin from Gemini exchange founders Tyler and Cameron Winklevoss.
In a separate legal matter, Trump was found guilty on 34 felony charges related to falsifying business records prior to the 2016 election.
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