The landscape for digital assets is experiencing a significant shift with the election of Donald Trump, bringing about greater regulatory certainty and a surge in market activity. The recent surge in market activity has raised questions about the sustainability of this trend and whether it is a temporary reaction to the political climate.
CCData’s latest Exchange Review report highlights a new yearly high in aggregated spot and derivatives volumes in 2024, surpassing the previous record set in 2021. November and December were both record-breaking months for volumes, indicating a significant increase in market participation. Stablecoins also saw a surge, reaching a total market cap of $210.1 billion on inauguration day, reflecting a YTD increase of 3.3%.
Assets with strong U.S. affiliations have been performing exceptionally well since the election, benefiting from a permissive regulatory environment and more favorable conditions for US-based assets. Coins like XRP, SOL, XLM, and ALGO have seen outsized returns, outpacing the market by a significant margin. This marks a shift from the previous administration’s regulatory stance, which had kept these assets under scrutiny for years.
The future of this growth will depend on the new Trump administration’s execution of its promises regarding a Strategic Bitcoin Reserve, incentives for domestic bitcoin mining, and other related issues. Additionally, as we enter the expansionary phase of the bitcoin four-year historical cycle, the broader market may experience explosive growth in the final year.
It remains to be seen whether the new administration will impact the market cycles that the cryptocurrency sector has been accustomed to, or if it will usher in a new era with significant departures from historical trends. The market will be closely watching how these developments unfold and the implications they have for the future of digital assets.