Following Donald Trump’s victory in the US Presidential election, crypto analyst Fred Krueger outlined a number of potential changes in the digital asset world, particularly with regard to Bitcoin.
Here are the events Krueger predicts will happen:
- A New Era of Government Stance on Digital Assets: Krueger stated that for the first time, the US government will adopt a non-adversarial approach towards digital assets.
- Banks Storing Bitcoin: With the Trump administration, banks could soon gain the ability to store Bitcoin, a significant move that would further integrate digital assets into traditional financial systems. Krueger cited President Biden’s veto of SAB 121, a rule that would restrict banks’ involvement with cryptocurrencies, and suggested that its reversal was imminent.
- SEC Leadership Overhaul: SEC Chairman Gary Gensler, known for his meticulous scrutiny of crypto projects, is expected to step down. Krueger believes this will create a more conducive environment for innovation in decentralized finance (DeFi) and various crypto startups, and position Bitcoin as a key player in the emerging digital economy.
- Tax Benefits for Bitcoin Holders: According to Krueger, the controversial unrealized gains tax proposal is unlikely to see the light of day over the next four years. Instead, tax rates are expected to drop, which would be beneficial for Bitcoin investors.
- New ETFs Without Tax Burden: Krueger predicted the possible approval of “in-kind” Bitcoin ETFs that would allow investors to exchange their physical Bitcoin for ETF shares without triggering a taxable event.
- Establishing a U.S. Bitcoin Strategic Reserve: The analyst predicted that the U.S. would create a modest Bitcoin Strategic Reserve as part of Trump’s broader support for the crypto sector. He also expects other countries to follow suit, sparking global competition for digital asset reserves.
- State-Level Bitcoin Reserves: States could begin to create their own Bitcoin reserves, further legitimizing the asset. Krueger added that pension funds and institutional investors will accelerate their adoption of Bitcoin in response to these trends.
- Traditional Finance and Wealth Management Integration: Traditional financial institutions, eyeing a favorable regulatory environment, may soon include Bitcoin in portfolio allocations for their high-net-worth (HNW) clients. Krueger predicts that an average allocation of 3-5% could become standard practice.
- Interest Rate Policies and Federal Reserve Pressure: Krueger predicts short-term interest rates will fall globally. If Fed Chair Jerome Powell resists these policy changes, the analyst said, pressure could be applied to conform to the new administration’s economic vision.
- Economic Stability Amid Transformation: Finally, Krueger believes that a softening economy, combined with efficiency measures from Elon Musk’s proposed Department of Government Efficacy (DOGE), will help control inflation and create an environment conducive to significant economic and regulatory transformation.
*This is not investment advice.