Trump’s Victory Sparks Bitcoin Rally as Crypto Industry Anticipates Policy Shifts

TLDR:

Trump’s election victory drives Bitcoin to new all-time high above $76,000
Galaxy Digital reports Q3 loss of $54M but remains optimistic about Trump presidency
SEC Chairman Gary Gensler expected to resign following Trump’s win
Trump pledges 10 major crypto initiatives including strategic Bitcoin reserve
Galaxy plans to convert mining operations to AI-driven high-performance computing

Bitcoin reached a new all-time high above $76,000 following Donald Trump’s election victory, as cryptocurrency markets responded to expectations of major policy changes under the incoming administration. Trading volumes exceeded $128 billion in 24 hours, highlighting intense market activity during this period.

Galaxy Digital Holdings, a major cryptocurrency firm, reported their quarterly earnings amid these market developments. The company posted a $54 million net loss in the third quarter, marking their second consecutive quarter operating at a loss.

Despite these results, company executives expressed optimism about future prospects under the new administration.

The combined losses over two quarters totaled $231 million, affecting Galaxy’s year-to-date performance. However, the company still maintains a positive net income of $191 million for the year, supported by strong first-quarter results when Bitcoin’s price surge led to a $422 million profit.

During the earnings call, Galaxy’s Head of Investor Relations, Johnathan Goldowski, downplayed the quarterly losses, suggesting that recent political developments overshadowed current financial results. CEO Mike Novogratz, despite his previous support for Trump’s opponent, described the election as the “most important day for crypto.”

Market conditions during the third quarter presented several challenges for Galaxy. Spot trading volumes decreased by 15%, while Ethereum’s price dropped more than 20% to approximately $2,600. These factors particularly affected Galaxy’s operations due to their substantial Ethereum holdings, including assets acquired through their CryptoManufaktur purchase.

Despite these challenges, Galaxy’s revenue increased by approximately 30% in the third quarter. This growth was primarily driven by their trading business, with Galaxy Global Markets reporting a 117% increase in counterparty trading revenue. However, other divisions saw declining revenues, with mining and institutional investments experiencing 23% and 44% decreases respectively.

The company announced plans to adapt their mining operations, revealing a partnership to convert their 800 megawatt power capacity to high-performance computing. This strategic shift aims to integrate artificial intelligence into their mining operations for improved efficiency and profitability.

Trump’s victory has prompted expectations of major changes in cryptocurrency regulation. Industry analysts predict that current SEC Chairman Gary Gensler may resign, following historical precedents of leadership changes during administration transitions. This potential change could affect various regulatory policies, including SAB 121, which currently restricts financial institutions from providing crypto asset custody services.

The president-elect has outlined ten specific commitments to the cryptocurrency industry, marking a departure from his previous skepticism toward digital assets. These promises include establishing a strategic Bitcoin reserve, preventing the development of a Central Bank Digital Currency, and supporting domestic Bitcoin mining operations.

Additional commitments focus on regulatory reform, including plans to remove current SEC leadership and create a more favorable environment for crypto startups. Trump has also pledged to commute the sentence of Silk Road founder Ross Ulbricht and form a Bitcoin advisory council within his first 100 days in office.

Boris Bohrer-Bilowitzki, CEO of Concordium, expressed optimism about these developments, suggesting they could establish the United States as a global leader in cryptocurrency innovation. The potential involvement of Elon Musk in the administration has also generated positive speculation within the industry.

The incoming administration’s stance represents a notable shift in cryptocurrency policy. Trump’s platform includes measures to protect private custody rights and mining operations, while encouraging the growth of crypto-related businesses within the United States rather than seeing them relocate overseas.

Market responses to these developments have been immediate, with Bitcoin maintaining strong price levels around $76k after setting new records. Trading volumes indicate high levels of investor activity as markets process the implications of the election results.

Galaxy Digital’s mining division plans to adapt to these changing conditions through their new high-performance computing initiative. This strategic move aligns with broader industry trends toward more efficient and technologically advanced mining operations.