All the (Digital) Money in the World!

This election cycle has been tough, and I’m glad it’s finally over! Half the country is happy, and half is not. I miss the days when people would just shrug and move on after an election.

I guess I am getting old!!

But since this is a finance blog, I will not drive into politics here. Instead I want to talk about something else that stood out to me during this election: the growing influence of crypto.

Crypto’s Growing Influence

This was the first “crypto election” in U.S. history. Pro-crypto groups raised over $245 million—more than any other industry!

While crypto donations went to candidates from both parties, more funds went to Republicans.

With Republicans taking control, it seems the crypto industry will get support for its policy goals. A big goal for the industry is better government regulation. The crypto industry in the past has suffered due to unclear regulations and inconsistent application of those regulations. So this election will be a net positive for the industry.

Trump, who once dismissed Bitcoin as “based on thin air” – has since changed his stance. He now promises to make America “the crypto capital of the planet” and has even mentioned creating a “strategic Bitcoin reserve”. If this happens, this will be another shot in the arm for the industry.

So it’s no surprise that Bitcoin surged 9% after the election, and hit a new all-time high of $75,361. Bitcoin has now surpassed Meta (Facebook) to become the world’s ninth-largest asset by market cap.

Although there may be sort-term spikes because of elections, in the long-term fundamentals drive returns and it seems the fundamentals for crypto may be improving.

Crypto Is Growing Up

A few years ago, many people thought crypto would build a decentralized future for work, the internet, and more. It was proclaimed to be the best thing since sliced bread!

The conversations have gotten much more grounded now. Today, when people talk about crypto, they mostly focus on practical things like stablecoins for payments.

As for me, I’m not a die-hard crypto fan. I don’t think it will change the world. On the other hand, I do think this is an interesting technology, and I want it to be part of my portfolio (albeit a very small one).

I do not have time to follow all the zillions of crypto currencies and coins out there. I did do some research into Bitcoin and I see Bitcoin more like insurance—kind of like gold.

I keep about 1% of my portfolio in Bitcoin. If it crashes to zero, I won’t lose sleep (well, maybe a little). But if the global economy goes south and all currencies lose value, at least I’ll have some Bitcoin to spend!

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As always – this blog is for informational purposes only. It is not legal, tax, investment, financial, or other advice.