BTC surpasses $75,000! Has the upward channel been fully opened?
Futu Research | Trump Elected President of the United States: Cryptocurrency Welcomes New Development Opportunities
On November 6, 2024, Donald Trump successfully won the next usa presidential election, a result that not only shocked the global political landscape, but also injected a dose of confidence into the digital currency market.
Trump had shown strong support for digital currencies during the campaign, promising to promote relevant policies to foster the development of that industry. With the announcement of Trump's victory, the digital currency market quickly reacted, with significant price increases in major cryptocurrencies like bitcoin and ethereum, and related concept stocks also saw a rapid rise in stock prices. In the usa under Trump's leadership, the digital currency industry may usher in unprecedented development opportunities.
So, what impact will Trump's successful election have on digital currencies? How can investors build their own trading strategies?
What impact will Trump's successful election have on digital currencies?
Firstly, in terms of attitude, Trump's current stance on digital currencies is very positive, and his successful election is expected to boost the development of the digital currency industry.
Trump's attitude towards digital currencies has undergone a complex evolution. During his initial term in office, the Trump administration was skeptical and negative towards digital currencies, believing they lacked intrinsic value and could be easily used for illegal activities.
In the 2024 election, there was a 180-degree shift in Trump's attitude, not only publicly supporting the development of cryptocurrency, stating "ensuring the future of cryptocurrency and bitcoin happens in the USA," but also accepting cryptocurrency donations in his campaign in hopes of gaining voter support.
At the same time, we can also glimpse the future development of the cryptocurrency industry from Trump's campaign declarations and governing direction.
The Trump administration will continue to support financial technology innovation, including blockchain technology and cryptocurrency. This may be reflected in increased research and development funds, strengthened patent protection, and collaboration with the private sector.
The Trump administration explicitly mentions its support for cryptocurrency in the Republican manifesto: "The Republican Party will end the Democratic Party's illegal and anti-American actions against cryptocurrency and oppose the creation of central bank digital currencies. We will defend the right to mine bitcoin and ensure that every American has the right to self-custody their digital assets and conduct transactions without government surveillance and control."
Therefore, from Trump's attitude and the Republican manifesto, Trump's presidency is likely to benefit the development of the cryptocurrency industry. The Trump administration's inclinations towards "tax cuts," "low interest rates," "weakening of the US dollar," and "domestic economic protection" could potentially benefit the cryptocurrency industry, which possesses attributes of "inflation resistance" and "hedging."
How should one invest in cryptocurrency?
The platform offers multiple digital currency spot ETFs for users to trade, spread across various markets globally. Investors can access and trade digital currency spot ETF themes in the Hong Kong stock and US stock markets through the "Market" - "ETF" section on the mobile app. Here is a brief overview of some ETF products within this sector (in descending order of trading volume):
US Stock Market:
Issued by Blackrock, one of the world's largest asset management companies, the iShares Bitcoin Trust is the ETF with the highest volume and turnover in its category. As a product under the umbrella of this reputable asset management company, it can attract investors who trust the Blackrock brand.
Features: This ETF has strong compliance, investors can buy and sell IBIT shares at any time during normal trading hours, with relatively high liquidity.
Risks: Due to the limited assets held in digital currencies, this ETF may have higher volatility and uncertainty; and due to restrictions such as costs and timeliness, this ETF may not always accurately reflect the price trend of Bitcoin.
Issued by Fidelity Investments, it is quite popular among investors, attracting a large amount of funds.
Features: This ETF offers a lower expense ratio and professional ETF management. In addition, similar to IBIT, this ETF can be bought and sold at any time during regular trading hours. Moreover, Fidelity began exploring the digital currency sector in 2014, with a strong research foundation.
Risk: Similar to IBIT, there is volatility and possible errors.
The ETF is issued by Grayscale Investments and currently has the highest total market cap in its category. Grayscale Investments is a company focused on digital asset investments, and GBTC is one of the earliest products that allows investors to indirectly invest in Bitcoin through traditional financial accounts.
Features: The net asset value of GBTC is based on the value of Bitcoin it holds, but it does not track the price of Bitcoin in real time, nor is it listed on exchanges for immediate trading. However, it can be traded on the OTC market.
Risk: Compared to other spot ETFs, GBTC has limited redemption mechanisms, leading to liquidity issues and potential price deviations. In addition, its expense ratio is slightly higher, reducing investors' returns.
Hong Kong Stock Market:
Managed by Grayscale International Asset Management Limited. This etf directly invests in Bitcoin, aiming to track the price performance of Bitcoin, net of fees and other expenses. Currently, this etf has the highest volume and turnover in the sector.
Features: 100% of the etf's funds are invested in Bitcoin. This provides investors with a direct exposure to the Bitcoin market without needing to hold or store cryptocurrencies themselves. Suitable for investors who have high requirements for security and convenience and focus on Bitcoin.
Risks: There may be tracking errors, meaning the etf's performance may not fully replicate the actual price movements of Bitcoin.
Managed by Huaxia Fund (Hong Kong). Similar to the Grayscale Bitcoin Trust, the Huaxia Bitcoin ETF also aims to track the performance of Bitcoin prices.
Characteristics: It also provides a channel to invest in Bitcoin through traditional financial markets, with a certain level of brand awareness and trust. At the same time, this ETF holds the highest market cap in the same category.
Risk: Like all single Bitcoin ETFs, it faces potential tracking error issues.
Also managed by Huaxia Fund (Hong Kong), but this ETF tracks the performance of Ethereum prices.
Characteristics: This ETF focuses on Ethereum, unlike the previous two focusing on Bitcoin. It provides an investment channel for the Ethereum ecosystem and its native tokens. This offers investors the opportunity to diversify their cryptocurrency investment portfolios, especially for investors bullish on the versatile blockchain platform Ethereum.
Risk: Similar to Bitcoin, Ethereum prices are also highly volatile.
In addition to ETFs, we can also pay attention to cryptocurrency-related concept stocks, look for investment opportunities in high-quality individual stocks, and search for "Cryptocurrency Concept Stocks (LIST20010, LIST20074)" to find a collection of related cryptocurrency concept stocks in the constituent stocks.
Overall, digital currency spot ETF combines the advantages of high liquidity and convenient trading, ensuring safety through regulation and professional management, eliminating the risk of private key management. However, it also has some drawbacks: price tracking may not be accurate, influenced by the high volatility of digital assets, prices may fluctuate significantly, and it involves management fees, affecting returns. Investing in cryptocurrency concept stocks requires careful selection of high-quality individual stocks to achieve excess returns.
Therefore, everyone can complete trades based on their investment preferences by matching the varieties.
Risk Disclaimer: The above content only represents the author's view. It does not represent any position or investment advice of Futu. Futu makes no representation or warranty.Read more
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