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Donald Trump's speech at the BTC Conference 2024 made headlines, igniting discussions across the crypto community and political landscape. Whoever penned this speech clearly understood the intricate dynamics of cryptocurrency and its potential impact on the future of the U.S. economy.

Here are the key points from his address that stood out:

Stablecoins and U.S. Dollar Dominance:

Trump advocated for the promotion of stablecoins, asserting that they would bolster the dominance of the U.S. dollar. This perspective, once considered niche, reflects a growing acceptance of stablecoins' role in the financial ecosystem.

Critique of Government Competence:

In a pointed critique, Trump attributed the weakening of the dollar to government incompetence. This line resonated with many, tapping into a broader narrative of fiscal mismanagement.

Mocking Elizabeth Warren:

The former president didn't shy away from mocking Senator Elizabeth Warren, a known critic of cryptocurrencies. This jab highlighted the partisan divide on crypto-related issues.

Vowing to Fire Gary Gensler:

Trump pledged to remove Gary Gensler, the current SEC Chair, on his first day back in office. Gensler has been a controversial figure in the crypto world due to his stringent regulatory stance.

Proposal for a Crypto Committee:

He proposed the creation of a dedicated crypto committee to oversee and regulate the industry. This move aimed to provide clarity and support for the burgeoning sector.

Bitcoin and Inflation:

Trump argued that Bitcoin's stagnation is due to inflation, which leaves people with less disposable income to invest in or save with Bitcoin. He drew parallels to historical instances of hyperinflation, such as in Germany, to underscore his point.

Uncontrolled Inflation as a Stealth Tax:

He described uncontrolled inflation as a stealth tax on the middle class, effectively a 50% tax on people. This resonated with concerns about the eroding purchasing power of ordinary Americans.

Strategic Bitcoin Stockpile:

Trump committed to creating a strategic stockpile of Bitcoin for the U.S. and vowed never to sell any Bitcoin the government holds or acquires. This pledge was seen as a significant endorsement of Bitcoin's long-term value.

Release of Ross Ulbricht:

He promised to release Ross Ulbricht, the founder of the Silk Road marketplace, who has become a cause célèbre in some crypto circles.

Economic Freedom and Less Regulation:

Trump appealed to the American dream, advocating for greater economic freedom and less regulation. He promised to reduce regulatory barriers, allowing more innovation and growth within the crypto industry.

Political Implications

Trump's speech has profound implications for both political parties. Democrats, traditionally more skeptical of cryptocurrencies, may need to reconsider their stance to attract crypto-friendly voters. The speech underscored a broader game theory in Bitcoin politics: governments and politicians, driven by electoral ambitions, may eventually embrace cryptocurrencies to gain support, even if it contradicts their previous positions.

Donald Trump's BTC Conference 2024 speech was a calculated and impactful address that capitalized on old and new arguments within the Bitcoin community. It reinforced the notion that political figures may increasingly align with the interests of the crypto sector to secure votes, highlighting the growing influence of cryptocurrencies in shaping future economic policies.

“If the world were on a Bitcoin standard and our money held its value, we would all have the ability to live more abundant lives. Bitcoiners have it right. Fix The Money, Fix The World.” - Robert F. Kennedy Jr

Price alone doesn’t tell the full story.

Ahead of the speech, speculators poured billions into short-term Bitcoin bets, hoping for a 10%+ surge if the rumor that Trump was “buying a million Bitcoin” proved true. As it became clear during the speech that this wouldn’t be announced, many of these bets were unwound, pushing BTC down to $66.5K before the speech even concluded. Had the speech ended there, BTC might have dipped to $65K or lower, reflecting the initial speculative bid levels.

What’s notable is that the frontrunners didn’t get their anticipated move. The options activity reveals that the bulk of interest was in August 2nd calls with $70K strike prices. This indicates that, post-speech, hundreds of millions in sell pressure came from short-term traders exiting their positions after not seeing a black swan event. For instance, a Bybit trader liquidated $175 million in longs within an hour, around 8 hours post-event.

To clarify: without these short-term speculators, BTC might have been around $64K before the speech. The fact that we’re now trading at $68K suggests that the market is actually higher, with these positions likely shifting to longer-term investors who have bought up hundreds of millions in BTC since the event.

This reaction is hardly surprising. The event was extremely bullish—Trump’s speech on a “strategic national Bitcoin stockpile” represents unprecedented public acceptance of crypto. The implications of such a shift in the political climate are massive, especially considering potential future Bitcoin stockpiles and the removal of Gensler, not to mention Senator Lummis’s Bitcoin buying bill introduced right after.

Even without Trump’s guaranteed victory, the speech sets a precedent that may compel Democrats to adopt crypto-friendly policies, given the substantial voter base holding crypto investments.

Fast-moving crypto content often skews towards day trading and short-term movements. While today’s “sell the news” narrative reflects short-term volatility, it doesn’t capture the long-term bullish implications of the event.

Warning

There is a strong chance that Democrats ignore crypto in the run up to the election. Win, and then label it "alt right" because of Trump support and crack down even harder. Then we will have collectively shot ourselves in the foot by making it partisan in the run up.