Post-election retrospective: 3 lessons for crypto investors

The outcome of this election is probably the strongest signal we have seen that crypto is an asset class set to last.

A week after the US elections, bitcoin reached new all-time highs. This price rise reflects the fact that the election results presented a best-case scenario for bitcoin and other cryptoassets, with a pro-crypto president and Congress poised to take the reins of the U.S. government in January.

Support for crypto has been massive. According to Stand with Crypto, 268 congressional candidates and 19 Senate candidates considered pro-crypto were elected. This includes the election of 50 of the 58 candidates supported by the crypto industry.

But with the changes coming in 2025, what can investors get from it? Here are three certainties to remember:

1. Crypto will continue to be a political force: The outcome of this election is probably the strongest signal we have seen that crypto is an asset class that is here to stay, given the pro-crypto stance of President-elect Trump and many new political leaders. Trump has supported ambitious ideas in this area, including integrating bitcoin into the U.S. balance sheet and creating a crypto advisory council aimed at putting in place industry-friendly rules.
   But the impact of this election will go far beyond last week’s results. The crypto community and industry’s commitment to this election will resonate in future elections and those that follow, as policymakers now realize that, much like the internet, crypto is a technology that should not not be caught up in partisan conflicts. There were already signs of bipartisan support for the industry this year, but with such a clear victory for pro-crypto candidates, both Democrats and Republicans, the idea that Congress should try to hinder this technology in the United States lost weight.
2. “Generational change” is underway: Although there has been more support for crypto among Republicans than Democrats, I believe this is a short-term dynamic that will not last. What might be more important is the generational shift underway, as younger generations of politicians embrace crypto while older ones remain skeptical. It’s no surprise that crypto’s most vocal critics are relatively elderly, such as Senator Elizabeth Warren (75), Senator Sherrod Brown (72), and Representative Brad Sherman (70), while those who support this technology, regardless of their political affiliation, are much younger, like future senators Tim Sheehy (38 years old), Ruben Gallego (44 years old) and Bernie Moreno (57 years old). Over time, this generational gap could become a more important distinction than partisan lines on this issue.
3. It’s still early: Even with bitcoin surging past $82,000 this week, the asset class is still in its early days in terms of adoption. Many investment advisors, wealth managers and large institutional investors continue to conduct their due diligence, and we believe the political and regulatory environment over the next year will help them accelerate these efforts.
   But we are still at the beginning. And, given the cyclicality of this asset class, there is considerable potential for the current environment to be an excellent entry point. For example, a year after the 2016 and 2020 elections, bitcoin had seen gains of 916% and 354%, respectively.

This performance is in line with the trends observed after the halvings and also benefits from favorable macroeconomic factors, such as lower interest rates in the United States and economic recovery measures in China which increase global liquidity and benefit assets. risky. These elements, combined with growing institutional adoption and a radical improvement in the regulatory framework in the United States, set the stage for a very promising 2025 for cryptoassets.

Crypto, big winner of the elections

The new administration, accompanied by a more crypto-friendly Congress than ever, is poised to move quickly to ensure the United States maintains its leadership in digital assets. Although uncertainties persist over specific policies and appointments, we are clearly at a turning point. Crypto was able to convince American political decision-makers, who welcomed it. This key factor augurs a year 2025 that we anticipate will be exceptional for this sector.

For investors considering their strategies in light of the election results, we continue to advocate a long-term view and diversified exposure to this asset class. Uncertainty and volatility will remain, but those who maintain a broad perspective will benefit, as has been the case in the past.