Lark Davis breaks down why a second Trump presidency could be a game-changer for crypto markets. While there is headline risk from tariffs and political uncertainty, Davis believes Trump’s policies will ultimately create a bullish environment for crypto. Here’s why.
1. Quantitative Easing & Liquidity Injections
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The U.S. must refinance $9 trillion in debt in 2025, likely leading to lower interest rates and money printing.
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The Treasury General Account (TGA) could be drawn down by $800 billion, injecting liquidity into markets. Historically, this has been bullish for Bitcoin and risk assets.
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Wall Street insiders predict quantitative tightening (QT) ends by June, opening the door for QE later in the year.
2. Trump Wants a Weaker Dollar
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Trump has repeatedly stated he favors a weaker dollar, which helps U.S. exports and markets.
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A weaker dollar historically fuels Bitcoin and altcoin rallies.
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While tariff news has caused short-term DXY (dollar index) spikes, Davis believes the long-term trend will be downward, benefiting crypto.
3. Lower Interest Rates
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Trump wants to push the Federal Reserve to cut rates, reducing borrowing costs.
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Lower rates mean more liquidity, stronger stock markets, and a better environment for risk assets like crypto.
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Trump also aims to lower energy prices, which could help reduce inflation and give the Fed more room to cut rates.
4. Trump’s Pro-Crypto Shift
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In his first term, Trump was skeptical of crypto. Now, he is openly supportive.
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Crypto-friendly regulations are on the way, with Hester Peirce ("Crypto Mom") leading new SEC policies.
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The U.S. could position itself as the global crypto hub, with clearer regulations and institutional adoption.
5. Trump’s Crypto Bags
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Trump and his circle own significant crypto holdings, including Bitcoin, Ethereum, and Chainlink.
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The Trump family business is backing crypto ETFs and investment funds, meaning they have a vested interest in a strong market.
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Whether it is meme coins, institutional ETFs, or crypto regulations, Trump has financial motivation to keep the sector booming.
Final Take
Lark believes Trump’s policies, including QE, rate cuts, a weaker dollar, and pro-crypto regulations, all set the stage for a massive bull run. However, risks like tariffs and macroeconomic shocks remain. If Trump delivers on these policies, crypto could soar in 2025.
