The upcoming Trump administration is expected to provide a favorable backdrop for cryptocurrency-related stocks, according to analysts at Piper Sandler. Cryptocurrency-linked assets surged on Wednesday following Trump's victory, as the president-elect has indicated his support for the industry. Analysts believe that more favorable regulations under a new administration could continue to drive digital currencies like Bitcoin to new all-time highs.

Unlocking the Crypto Opportunity: Navigating the Evolving Regulatory Landscape

Robinhood: The Crypto Trading Platform Poised for Growth

Piper Sandler analyst Patrick Moley highlighted Robinhood as the "most attractive way to play the crypto space" within his coverage universe. Shares of the financial trading platform have more than doubled this year, surging 130%. Moley estimated that crypto made up around 13% of Robinhood's revenues in the past 12 months. The analyst noted that Robinhood's "monetized crypto offering is significantly more robust than traditional retail brokerage peers, with over 15 tokens available to trade." As a comprehensive regulatory framework around crypto is eventually introduced in the U.S., Moley believes Robinhood will likely look to expand its crypto offering by increasing the number of tokens available for trading and introducing new products like staking and lending to a customer base ready to adopt new crypto products.

CME Group: The Premier Venue for Crypto Derivatives

Moley was also bullish on shares of CME Group, which have climbed 5% this year. While crypto is currently an "immaterial" part of CME's business, making up less than 1% of its revenue in the past 12 months, the company is the "premier venue for commercial & institutional users of crypto derivatives." CME currently offers 9 different crypto contracts across Bitcoin (5) and Ethereum (4), and through its partnership with CF Benchmarks, it has an additional 28 reference rates that the analyst thinks the company could look to launch new contracts on if regulatory clarity improves.

Virtu Financial: A Quiet Leader in the Crypto Space

Although crypto made up less than 5% of Virtu Financial's revenue in the past year, Moley said that the platform was "quietly operating as one of the major traditional finance players in the crypto space." The market maker is currently an authorized participant on ALL of the publicly traded spot Bitcoin and Ether ETFs (over 20), and the analyst believes the future launch of options on these spot crypto ETFs could add another layer to Virtu's crypto revenues. As crypto's presence in traditional finance evolves, Moley thinks Virtu is positioned well to benefit.

Cboe Global Markets: Consolidating its Digital Asset Derivatives

Finally, Moley gave an honorable mention to trading platform Cboe Global Markets. Less than 1% of the Cboe's revenue was derived from crypto assets in the last 12 months, but the company "offers & clears cash-settled Bitcoin and Ether futures contracts" and "recently exited its spot digital asset trading platform and consolidated its digital asset derivatives into its existing Global Derivatives & Clearing Business." Shares of Cboe have added 12% this year, trailing the broader market, and Moley's $220 price target implies an additional 9% upside.

The cryptocurrency market has experienced a remarkable surge following the victory of former President Donald Trump in the 2024 U.S. presidential election. Bitcoin, the world's largest and most well-known cryptocurrency, has reached a new record high of $82,000, marking a significant increase since Trump's election. This surge is largely attributed to the president-elect's pro-cryptocurrency stance and his plans to integrate Bitcoin into the nation's economy.

Unleashing the Crypto Revolution: Trump's Crypto-Friendly Agenda

Embracing the Crypto Future

During his campaign, Trump pledged to make America "the crypto capital of the planet" and proposed integrating Bitcoin into the nation's economy as a hedge against rising inflation. This bold vision has resonated with the cryptocurrency community, who see Trump's victory as a catalyst for the widespread adoption and integration of digital currencies. The president-elect's commitment to fostering a more collaborative approach to crypto regulation, by creating a "bitcoin and crypto presidential advisory council," has further bolstered the confidence of industry insiders and investors.

Shaking Up the SEC and Empowering Crypto Mining

Experts had previously predicted that Trump's victory would result in a surge in cryptocurrency markets, in part due to his promise to remove Securities and Exchange Commission (SEC) Chair Gary Gensler from his role. This move is seen as a signal of the administration's intention to take a more industry-friendly approach to crypto regulation, potentially paving the way for increased adoption and innovation. Additionally, Trump's support for Bitcoin mining in the country has further fueled the market's enthusiasm, as the availability of reliable and cost-effective mining infrastructure is crucial for the long-term sustainability of the cryptocurrency ecosystem.

Elon Musk's Crypto Influence

The close relationship between Trump and Tesla CEO Elon Musk, who has been a vocal supporter of the president-elect, has also had a significant impact on the cryptocurrency markets. Musk's decision to invest $1.5 billion in Bitcoin in 2021 was a major catalyst for the market's growth, and his continued involvement and advocacy for digital currencies have further solidified the perception of cryptocurrency as a legitimate and viable investment option.

Ripple Effects Across the Crypto Landscape

The surge in Bitcoin's value has had a ripple effect across the broader cryptocurrency market. Ethereum, the second-largest cryptocurrency by market capitalization, has also seen a significant increase, rising above $3,200 for the first time in three months since the election. Additionally, the meme-inspired cryptocurrency Dogecoin, which had previously been dismissed as a joke, has also experienced a resurgence, reaching a record high for the past year.

The U.S. Dollar's Resilience

Interestingly, the U.S. dollar has also seen a boost in the wake of Trump's election victory, rising more than one percent against several major currencies, including the euro and the Japanese yen. This marks a four-month high for the U.S. exchange rate, further underscoring the complex and interconnected nature of the global financial landscape.

Navigating the Crypto Boom: Opportunities and Challenges Ahead

As the cryptocurrency market continues to soar, investors, policymakers, and industry leaders will need to navigate a complex landscape of opportunities and challenges. The integration of Bitcoin and other digital currencies into the U.S. economy will require careful planning and coordination to ensure the stability and security of the financial system. Additionally, the regulatory environment will need to evolve to keep pace with the rapidly changing crypto landscape, balancing the need for innovation with the imperative of consumer protection.Despite these challenges, the surge in cryptocurrency values following Trump's election victory underscores the growing importance and mainstream acceptance of digital assets. As the new administration takes office, the world will be watching closely to see how it leverages the power of cryptocurrency to drive economic growth, foster innovation, and solidify America's position as a global leader in the digital finance revolution.