The election of Donald Trump promises a new era for digital assets characterized by greater regulatory certainty and an increase in market activity. The question now is whether this change is sustainable, or a temporary reaction to the political climate.
According to CCData’s latest Exchange Review reportthe combined volume of spot and derivatives, the most common measure evaluated for market participation, set a new annual high in 2024, far surpassing the previous record set in 2021 ($75 trillion vs $64 trillion). With market activity and speculation driving the election, November and December were both record-breaking months for volumes, with $10.51 trillion and $11.31 trillion in monthly volume, respectively. For context, the average in 2024 (the biggest year on record) is about $6.4 trillion.
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At the same time, stablecoins reached a total market cap of $210.1 billion, its highest point, on the day of the inauguration, according to DeFiLlama. This reflects a YTD increase of 3.3% so far, on the back of improved liquidity conditions on both centralized and decentralized exchanges, supporting the influx of fresh volumes seen over the past few months.
“Made in the USA” assets do particularly well. They have been an outlier since the election, where a permissive regulatory environment, and the promise of more favorable conditions for US-based assets, have generated significant investor interest and speculation. . Coins such as XRP, SOL, XLM and ALGO, which have strong ties to the US, have seen massive returns. According to CCData, the basket associated with these coins has increased by more than 360%, outperforming the market by a large margin. It marks a turnaround from the previous administration’s regulatory clampdown, which kept them under scrutiny for years because they were ultimately deemed securities by the SEC.
Whether this unprecedented growth continues will depend heavily on the new Trump administration’s implementation of its promises on a Strategic Bitcoin Reserve, incentives for domestic bitcoin mining, and other issues. The broader market may also benefit as we enter the expansion phase of bitcoin’s four-year historical cycle, which is likely to see explosive growth in the final year.
It will be interesting to see if this new administration will affect the market cycles to which the cryptocurrency sector has become accustomed, or if it will be marked by a significant departure from historical trends.
