The Latest News - Donald Trump Was Elected The Next US President
Hello McFinancers! We have some major news that occurred this week. The biggest one is Donald Trump being elected as the next president of the United States.
The latest in financial news: Donald Trump's impact on markets and major crypto promises, Detroit looks to accept and use for tax payments, USDT being used in global trade, the Federal Reserve cuts interest rates by 25 bps, and Crypto.com expands to offer securities,
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President Trump’s Major Crypto Promises
In the wake of the 2024 U.S. elections, crypto markets have seen a substantial rally, fueled by the Republican Party's victory and the anticipated pro-crypto policies under a potential Trump administration. Key promises include regulatory reform, leadership changes at the SEC, and an end to restrictive banking practices. Trump’s proposed overhaul aims to create a more favorable environment for crypto, promoting greater institutional investment and accelerating mainstream adoption. Notable highlights for crypto investors include the establishment of a national Bitcoin reserve, tax exemptions for Bitcoin transactions, and plans to make the U.S. a global crypto hub. While these shifts are seen as ushering in a "Golden Age" for crypto innovation, investors will need to remain discerning, as not all projects will benefit equally from the changing regulatory landscape.
The political shift toward pro-crypto policies is likely to have significant implications for investor portfolios. With increased institutional demand, especially for Bitcoin, valuations are expected to rise, and Bitcoin could see new price highs, with some forecasts predicting $100K by the end of 2024 and $200K by 2025. The broader economic backdrop—rising debt and potential interest rate cuts—further suggests that Bitcoin, other cryptocurrencies, and stocks may increasingly be viewed as a hedge against traditional market risks.
Major US City Looks To Adapt Crypto For Taxes
Starting in mid-2025, Detroit will become the largest U.S. city to accept cryptocurrency as payment for taxes and fees. This groundbreaking initiative is part of the city’s broader strategy to modernize public services and drive economic growth. The payment process will be securely managed by PayPal, which aims to enhance accessibility for residents, especially those who are unbanked or prefer digital payments. Detroit’s Mayor Mike Duggan expressed excitement about its commitment to creating a tech-friendly environment, positioning itself at the forefront of blockchain adoption. Additionally, the city is encouraging blockchain entrepreneurs to propose innovative solutions that can improve public services by enhancing transparency, security, and efficiency. This move will make Detroit a leader in the growing trend of cities exploring cryptocurrency payments. While smaller municipalities like Williston, North Dakota, and Miami Lakes, Florida, have already implemented crypto payments for certain services, Detroit's large-scale adoption sets it apart, with the potential to attract both tech entrepreneurs and crypto investors.
Detroit's embrace of cryptocurrency payments could serve as a key indicator of growing institutional acceptance of blockchain technology. For investors, this marks an important milestone for the adoption of digital assets, with more mainstream use cases expected to emerge. This could have positive implications for cryptocurrency valuations, particularly Bitcoin and Ethereum, as they become more integrated into everyday financial systems. Moreover, blockchain-based startups and fintech companies may see increased interest, potentially boosting their market capitalizations and creating investment opportunities in sectors related to digital payments and infrastructure. Investors in these areas might consider reallocating part of their portfolios into assets linked to blockchain technology as cities and states increasingly look to integrate crypto into their public services.
Tether (USDT) Being Used For Global Trade
Tether's investment arm has successfully completed a $45 million funding deal for a physical crude oil transaction in the Middle East, marking a significant milestone in its growing role in global commodities trading. This transaction, which involves a major oil company and a commodity trader, represents Tether’s first venture into the Middle Eastern crude oil market. Tether CEO Paolo Ardoino emphasized that this deal underscores the company's commitment to modernizing trade finance by leveraging its USDT stablecoin, which aims to streamline and expedite transactions in markets traditionally reliant on slower and more costly payment systems. This development highlights Tether's expanding footprint beyond cryptocurrency markets, aligning its operations with global finance and commodity trading. The financing of the crude oil trade is part of Tether’s broader strategy to promote the use of USDT in international transactions, further integrating blockchain technology with traditional industries.
For investors, Tether's move into the commodities space could be a signal of broader integration between traditional assets (like oil) and digital currencies. This may open new opportunities for portfolio diversification, especially for those looking to leverage blockchain and cryptocurrency for efficiency in global trade. As Tether continues to expand its influence in traditional markets, its impact on global finance could increase, potentially enhancing the liquidity and accessibility of commodities trading. Investors should watch for further developments in this space, as Tether’s growing role in both cryptocurrency and commodities may influence the volatility and potential returns of both asset classes.
Federal Reserve Cuts Rates
On November 7, 2024, the U.S. Federal Reserve cut interest rates by 25 basis points (bps), marking its first rate reduction since the Trump administration. This follows a previous 50bps cut in September, signaling a continued shift toward monetary easing. Following the announcement, Bitcoin (BTC) remained strong above $76,000, and the broader cryptocurrency market maintained positive momentum. Stock markets also surged, with the CBOE Volatility Index (VIX) dropping, reflecting decreased market uncertainty. Despite the rate cut, cryptocurrency prices largely remained stable, with some analysts suggesting that the Fed's actions might have a diminished effect on digital assets going forward. Additionally, the Fed's decision to remove language suggesting “greater confidence on inflation” led to speculation about potential shifts in U.S. monetary policy, with discussions about its political implications.
The Fed's decision to lower rates is typically seen as a positive for risk assets, including cryptocurrencies. The continued easing could encourage more liquidity in the market, potentially boosting the appeal of Bitcoin and altcoins as alternatives to traditional investments. For investors in digital assets, this may provide a favorable environment for further price growth, as lower rates often lead to increased risk appetite and capital flows into speculative markets. However, with cryptocurrencies showing minimal immediate price movement post-announcement, investors should consider the possibility that the correlation between traditional monetary policy and digital assets may be weakening. As such, it might be prudent for investors to balance their portfolios between digital assets and more traditional assets, while remaining cautious about the potential volatility inherent in both markets.
Crypto.com Expanding Its Usecase
Crypto.com, a leading cryptocurrency exchange based in Singapore, has taken a significant step into traditional finance by acquiring Watchdog Capital, a U.S.-based broker-dealer registered with the Securities and Exchange Commission (SEC). This acquisition enables Crypto.com to offer equities trading to its American customers by the end of 2024, a move that will include stock trading and equity options. Crypto.com’s CEO, Kris Marszalek, described this acquisition as a major leap in bridging the gap between digital and traditional financial markets, highlighting its long-term commitment to integrating both spheres. By adding equities to its platform, Crypto.com aims to provide more diversified financial tools to users, while navigating the regulatory landscape with the necessary licenses and registrations. This move comes as the company sees growing bipartisan support for the cryptocurrency industry in the U.S. The company’s plans to offer both crypto and equities trading marks a significant expansion, potentially reshaping how investors interact with both asset classes.
For investors, this development could signal a shift towards a more integrated investment ecosystem, where digital assets and traditional stocks coexist on the same platform. Crypto.com’s push into equities trading could attract a broader audience, including those already invested in traditional stocks who may be looking to diversify into cryptocurrencies. This dual offering could also lead to increased competition in the financial space, with more platforms offering cross-asset investment opportunities. Investors in the cryptocurrency space might benefit from the integration of traditional financial products, while those focused on equities might find new opportunities in the growing crypto sector. However, investors should remain cautious of regulatory shifts and potential market volatility as these two asset classes increasingly overlap. Balancing exposure to both crypto and traditional equities could become a more common strategy for diversifying portfolios moving forward.
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* Investing can be unpredictable and volatile. Investors should always do proper due diligence to determine if assets are right for them. We are not licensed tax or financial professionals.
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