Among the industries and stakeholders that could benefit from Donald Trump’s election as president of the United States, the cryptocurrency investor class has been the most enthusiastic, and the celebration appears to have only just begun.
Bitcoin surged to a new all-time high of $82,000 on Monday, just a day after reaching $80,000 for the first time on Sunday.
This rally followed Bitcoin’s milestone of $75,000 on November 6, the day US election results paved the way for Trump’s return to the White House.
Trump has promised to position the US as a global leader in the crypto industry by establishing a Bitcoin reserve and reducing regulatory barriers.
Exchanges saw a surge in trading activity, with CoinDCX, India’s largest crypto exchange, reporting its highest hourly trading volume of the quarter.
Invezz spoke with Sumit Gupta, co-founder of CoinDCX, to explore how Trump’s election could be a turning point for the asset class, why he believes BTC is on track to reach $100,000, the rally’s potential impact on altcoins, and his excitement about the possibility of BTC becoming a strategic reserve asset under Trump’s leadership.
Edited excerpts:
Invezz: Bitcoin’s record high post-election spiked activity on your platform. What does this mean for your platform and BTC’s near-term outlook?
I think it was expected. Whenever there is any movement in the market, let’s say, if there is any upward movement in the market, we always see a rise in volumes.
This time it was higher than usual because it was a moment when so many people were waiting for Bitcoin crossing an all-time high.
It is a big deal. It has now crossed $82,000, and so pretty much everyone who has invested in Bitcoin is sitting in profit.
Recent BTC movement likely to trigger fear of missing out
This gives confidence to people who have been sceptical about it, especially for the last two to three years since it fell to $19,000 or $20,000 levels when the FTX collapse happened.
Bitcoin again coming back stronger essentially gives confidence to the larger public that this is something that is here to stay.
And it is also different this time because when you have the president of the world’s largest economy endorsing Bitcoin so openly, it is sure to get people who are sceptical about crypto or Bitcoin in general thinking and wondering if they are missing something.
So, I think I have seen that change in the perception of people.
We have been believers in the industry for the last seven to eight years. So, we knew about it.
But when the general public also gets to know about these things it just leads to a lot more confidence in the industry and a lot more confidence in the asset class, and people who are users of CoinDCX, tend to do more activity.
They hold more positions because the kind of policy changes that are expected to come out from the US are very, very bullish, and are hinting towards a potential rally of Bitcoin.
Bitcoin may cross $100,000 in the next couple of months
And a lot of people are expecting that in the next couple of months, we’ll see Bitcoin crossing $100,000.
When that happens, it is going to suddenly change a lot of things, especially on the perception front.
I think we are in that zone where people have very high confidence because of a lot of new capital that will come in via institutions in the US that is going to take the price much higher.
People are largely betting on more new capital and investment coming into Bitcoin because earlier, there were a lot of restrictions or hurdles even in the US.
For example, when ETFs came, things got opened up, and a lot of institutional capital came, but people were not sure if the US as an economy will support it, because there were so many challenges that were coming from the SEC side, and a lot of people who are building in this space in the US, they were also apprehensive about future uncertainty, or the SEC applying some rules.
With Trump coming to power, the objective that they have communicated is to have a pro-crypto environment in the US.
When that happens, it automatically gives an environment for new companies to come up and flourish.
They can confidently build their business, which also attracts a lot more capital.
So, I think it’s a very good setup for the markets to grow and for the industry to be a lot more mature, having tailwinds from the regulatory front overall in the US as well.
Therefore, with that expectation, I think the markets are just reacting to that, and I’ll not be surprised if Bitcoin crosses $100,000 in the next 2-3 months.
November generally a month of high action, will boost the BTC rise
Invezz: Could you give us a number at which we could end the year?
I can tell you, but I don’t want people to make decisions based on what I feel, but I do see a possibility of 100K very soon.
Because even if $10 billion gets invested, or $20 billion gets invested, that is also a large amount to move the Bitcoin price up.
And that’s a very small number compared to the amount that is sitting on the traditional side of things.
Also, more rate cuts are expected. The rate cut of 25 bps happened last week.
And when rate cuts happen, the capital flows to assets like Bitcoin, and the stock market. So, many things are in motion.
November is an exciting month, because every November in the last two cycles, we have seen higher activity in the market. If you look at the pattern over the last few years, usually November is a period of high action.
And generally, six months after halving is when the market starts to rise.
So we are sitting at six months after halving, then there is the November factor, then there is the US elections, and then there is the government talking about Bitcoin as a strategic reserve asset.
So, even if that doesn’t happen, even if there are talks taking place on that front, and even if people know that the government is serious about that, some of the institutions would want to invest early on before that happens.
So, I don’t know if it will cross $100,000 by the end of this year, but it is going to be closer to that number by the end of this year, maybe $90,000, $100,000, but I will not expect it to go to like $150,000, $130,000 by end of this year.
Altcoin rally expected next year after Solana ETF
Invezz: Do you have any forecast on altcoins? Solana, Ethereum, etc., have also been picking up on the sentiment. There is also a Solana ETF that is being talked about.
What I’m hearing is that Solana ETF could be next in line.
And when the Solana ETF comes, then you will see that (rally) before it actually happens. Right now Solana is at $205.
You will see that rising because when talks around Solana ETF start to take place, it’s still happening, but when it becomes more and more certain, it will start to get priced in.
So, it may very well happen soon, maybe by March of 2025 or so. But I think that is next in line.
When that happens, then automatically all the altcoins start rallying because then people may expect Ripple ETF (to also become a reality), or expect the same for a different token ETF.
It’s like a company going public and then people wanting to invest before the company goes public.
So, I do see a rally in altcoin sometime next year, probably not now, because the way it happens is that first capital comes into Bitcoin, and then Bitcoin goes up. Then, people start to use that money in Bitcoin and whatever profit they have and convert that Bitcoin to different altcoins.
People who want to book profits, don’t book it in fiat or INR or US dollars, they essentially park that flow, that large flow into different altcoins.
That is one indicator. That is how markets usually react as per what I’ve seen in the last eight years.
High BTC dominance prompts diversification into alts, though not all may gain
Secondly, Bitcoin’s dominance currently is at 59%, right now, which is very high.
When Bitcoin dominance crosses 60%, then that is not as sustainable and then people would want to diversify because Bitcoin alone cannot take 60% of the entire market cap.
Usually, it hovers around 40%-45% or so. So, it will start to go down, and when that goes down, that means alts are going up.
But I think there’s still some more time for that, maybe sometime next year is when we’ll see. But when it happens, it will not be all the alts going up.
This time it’s going to be whatever people have more confidence in. I think we will see a lot more momentum in specific alts, which are either linked to a certain segment of coins which will go up faster.
And, a lot of alts may not even get traction. There will be a lot of coins that will sort of come in the top 50 or new coins that will come in the top 50 or top 10.
But on the other hand, you will also see a lot of coins that are there right now or were there one year ago, being absent from the top 100.
Because, if I’m sitting in a particular token and if I don’t see that getting traction or that project doing well, then I will use that capital and park it somewhere else because I see more momentum there.
So, all of these capital movements will happen within the crypto space also, which will define which alts are rallying and which alts are not showing momentum- it’s largely a function of that.
How to choose your alts?
Invezz: Could you give us five alts that you are bullish on in the short to medium term?
I largely avoid sharing that because I think I’ve done it a few times and I’ve seen people just directly investing in that which is not appropriate as people should do their homework.
But, I would say that if someone does the hard job of going through the first 50 coins on CoinMarketCap or any other website and just spends about 5 minutes each reading about them, they will know which coins are essentially solving for decentralised LLM models.
Solving for computation is very hard, so if there is a crypto that is solving, people will get to know that or if something is getting built in DeFi, there are a lot of L1s, and L2s that are specifically on decentralized finance…
So, these are things that I always recommend people to study.
BTC’s use as a strategic reserve asset could drive its price higher by 3x to 5x
Invezz: Trump has made many poll promises for the crypto industry- from mining Bitcoin in the US to firing the SEC chair, and more. Which promise are you most excited about?
He has also promised that he will give people the right to self-custody.
He also mentioned that he will ban CBDCs (Central Bank Digital Currency) I think, and that he will not let CBDCs run because a lot of people don’t believe in CBDC, it has never worked anywhere in the world.
The thing that I’m most excited about, which I feel will have the highest impact (on the crypto industry), is the US deciding to look at Bitcoin as a strategic reserve asset.
The US currently holds roughly 200,000 bitcoins. The total supply of Bitcoin is 21 million and currently, 19.7 million are in circulation.
And, the US dollar is the global reserve currency. A lot of companies hold US dollars in treasury and other places.
The objective was to determine what the government do to strengthen US dollars.
The response was that we would also back the US dollar or the US economy with Bitcoin.
And the way they will do it is that they will treat Bitcoin as a strategic reserve asset that will give strength to US dollars.
And what that means is that if the US government right now has 200,000 bitcoin, they have mentioned that they will take it to 1 million, which is 5% of the global Bitcoin supply.
And for that, even if the US, let’s say, invests 100 billion dollars, which is peanuts, that alone is sufficient for Bitcoin to go 3x or 5x from here.
Global impact of BTC being used as a strategic reserve asset and the Bhutan model
This is not as much about the price, but also more about the geopolitical implication that this move will have as other countries might question that if the US is holding Bitcoin in their Treasury, are we missing out?
And by the way, Bhutan does it, UK does it, Japan has it, Germany has it- all of these countries already have Bitcoin. It’s like countries having gold.
But, imagine the US does it. Other countries will say, look, we don’t want to buy Bitcoin at $200,000 when the US has already bought it, because then they’ll have to pay double the price or triple the price for the same number of Bitcoins.
So, that will start a race for different governments.
Again, I’m not saying this will happen in the next 3 to 6 months. But, if that happens, and if the US doubles down on that, I don’t think other countries will sit idle and just watch it happen.
Because the entire world runs on US dollars. All the trade happens in US dollars. And if USD needs to continue to retain its strength, then it has to be backed by something, and Bitcoin is something that is a good option for them to bet on.
So, I’m very excited about that possibility where maybe in the next 2 to 5 years, governments will say, look, we also want to have $100,000 in our treasury or $10,000.
El Salvador has it already. Bhutan has it. Bhutan mines Bitcoin using the hydroelectric that they generate from the mountains.
And, one-third of Bhutan’s GDP is coming from mining Bitcoins. It’s the biggest contributor to their revenue.
I’ve also read a proposal that Bhutan is now investing more in Bitcoin mining and wants to increase that to 5 times from where it is today. It’s phenomenal.
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