If Trump wins another term on Nov. 5, there are better trades than just buying bitcoin, one expert says.
Posted October 23, 2024 at 3:02 pm EST.
As Donald Trump rises in the polls ahead of the 2024 U.S. presidential election, the question of how his potential victory could impact the crypto markets is becoming a hot topic. While Trump has been vocal in his support for bitcoin, experts are now suggesting that the real winners of a Trump presidency could be altcoins such as ETH and SOL.
In the latest episode of Bits + Bips, economist Alex Kruger, founder of advisory firm Asgard, said that “the main Trump trade is not bitcoin, it’s altcoins,” Kruger stated. He went on to explain that if Trump wins, ethereum and solana would both likely perform better than bitcoin. “We’ve been talking in the podcast here for quite a few months [about how] I prefer ETH and SOL over bitcoin on a Trump win… It’s just common sense to me,” Kruger added, apologizing to Bitcoin “maxis.”
While Bitcoin has already made significant regulatory progress, platforms such as Ethereum and Solana still have a way to go. In a more favorable regulatory environment, Ethereum could potentially see staking incorporated into spot ETFs, while Solana could receive approval for its own spot ETF. Moreover, the hundreds of decentralized finance (DeFi) projects operating on both platforms could also experience a boost in confidence, liquidity, and growth.
While there is some consensus that bitcoin will continue to rise in the medium to long term, Bits + Bips guest Jeff Park, head of Alpha Strategies at Bitwise, raised a potential risk, suggesting that a Trump win could lead to extreme volatility for bitcoin prices. “If Trump wins, the probability assignment would imply that bitcoin could go to $92,000, and if Trump loses, bitcoin might go to $37,000,” he said, noting that these numbers are calculated using available data. “These are pretty unscientific range bound numbers that I’m trying to just retrofit based on the most amount of data that I can find,” he said.
However, the broader crypto market may be even more impacted by the launch of bitcoin ETF options. The products were approved by the SEC last week, though it’s unclear when they will officially be launched.
Read more: Why Bitcoin and Crypto Prices Are Set to Surge Regardless of Who Wins the U.S. Presidential Election
On the podcast, Park emphasized how significant bitcoin ETF options are. “People misunderstand when they say these bitcoin ETF options are not a big deal,” Park said, explaining that unlike traditional derivatives, ETF options allow for greater participation through tools such as investing on margin, stock lending, and cross-asset collateralization. This financial innovation could bring a broader set of participants into the Bitcoin market, marking a pivotal “zero to one moment.” Joe McCann, founder of crypto investment firm Asymmetric, added that banks are poised to benefit from bitcoin ETF options, which would allow them to create structured products that could generate significant profits. “Banks make so much money off this stuff,” McCann said.
James Seyffart, an ETF expert from Bloomberg, predicted that these options products could arrive as early as the first quarter of 2025. “My view is I think Q1… is likely when it’s going to happen,” Seyffart said. He explained that regulatory concerns, particularly around position limits, have slowed their approval, but progress is being made behind the scenes.
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