- Do you think that Trump’s victory in the U.S. could make it a stronger crypto hub?
A: It will probably take some time before we have more clarity on the long-term US policy. Despite the overall market rally, VC investments in crypto remain anemic and it would take more official directives to compel the VC money to return. In the meantime, there will be a lot of policy directives competing for the president’s attention so we expect a slow burn higher in prices with mainstream adoption being slowly dragged in, but the evolution into a ‘hub’ will probably have to wait a few quarters as the administration settles in.
- What is the wish list the crypto industry has for the Trump administration?
A: The industry hopes for a more collaborative one with current builders and clarity on regulatory scope. It will be important for the industry to gain more clarity on which agencies are in charge of stablecoin policies and how that interacts with the digital USD while leveraging Web2 builders such as Paypal’s PYUSD to use crypto in everyday transactions via credit cards or approved stables.
- Might we see more firms shift business/ their global headquarters to the U.S.?
A: On the margin, people will definitely be looking at the U.S. market. It also helps that there are big expectations of overall business regulation with Elon being part of Trump’s close circle, and he is a big proponent of digital efficiency, innovation, and crypto.
A long-delayed but successful IPO of Circle (USDC) will be a big boon for the industry and will be a big attraction for firms to move into the US as successful private companies will now have a clear path to a proper, public market exit into the US capital markets following the likes of Coinbase and Circle. This will be a win-win-win scenario for company builders, VC investors, TradFi banks, and the crypto ecosystem as we will now have a complete lifecycle loop of creation to exit with the world’s largest capital markets, and the largest consumer market for use-case adoption if the administration can lay out the right framework.
- Does your firm have any tentative plans to shift more business to the U.S.?
A: Our on-chain and institutional grade solutions have been gaining a lot of attention from US-based institutions, and we definitely plan to hire a number of US-based sales and BD to be based out of the NY timezone for high-touch services and general BD work. We expect the approval of ETF options and rise in CME activity to be a huge boom for our core business (derivatives), and the subsequent wave of blockchain developments will be a big boost for activity globally including in the US.
- Do you see booming demand from China investors’ after Trump’s win/amid high expections of Trump’s win, what has driven the demand and do they rush to HK ETFs, or any products they prefer?
A: Chinese participants in crypto have been a long-stay and interested users have been involved in the space for quite a few years now. Their participation is primarily driven by longer-term structural reasons such as asset diversification, alpha opportunities, early mining gains, macro inflation, and less by US politics.
A Trump win has probably more effect on converting existing holders into more bullish expressions, for example, leveraged long futures, call options, high beta tokens, etc. than compelling fresh local entries, but net the region is certainly excited about a Trump win to spark the next leg higher in crypto prices.
Current PBOC stimulus will certainly provide more tailwind to risk-on traders and crypto but are likely more concentrated in equity A shares and equity prices as the stimulus packages are more directly aimed to move equity indices higher.
Response provided by Augustine Fan, Founding Partner of SOFA.org