The Impact of Trump's Messages on Bitcoin
Recent research indicates that former President Donald Trump's supportive statements and policy announcements regarding cryptocurrency have led to positive excess returns for Bitcoin. According to a study by American Professor Emeritus David Krause, Bitcoin recorded an average excess return of 0.94% during Trump-related event periods. In contrast, Ethereum did not exhibit this pattern, suggesting that Trump's message was specifically focused on Bitcoin.
Key Events and Market Reactions
The researchers analyzed five key Trump-related events from May 2024 to April 2025, including his pledge to make the U.S. a 'crypto hub,' the launch of World Liberty Financial (WLF), his presidential victory, the declaration of establishing a U.S. crypto reserve, and his support for stablecoin legislation. Examining market data for the nine days before and after these events, the study found that Bitcoin's excess returns during these periods were distinctly different from the negative returns in non-event periods. This suggests that political statements and policy changes are acting as significant investment signals for cryptocurrency investors, which could greatly influence future economic and investment strategy development.
Bitcoin vs. Ethereum and Global Return Comparisons
During the analysis period, Bitcoin achieved an impressive 1-year cumulative return of 55.36%, significantly outperforming the S&P500 (10.59%) and gold (43.49%). Meanwhile, Ethereum experienced a sharp decline of -40.44%. Although Bitcoin's annual volatility was high at 51.46%, its risk-adjusted return (Sharpe ratio of 1.076) was superior to that of the S&P500 (0.55). These results indicate that investors can expect commensurate rewards for taking on higher risks in the economy and the market.
The Combination of Politics and Capital: Regulatory and Investment Trust Issues
In addition to Trump's support for cryptocurrency, projects that combine politics and capital, such as World Liberty Financial (WLF), are gaining attention, raising concerns about regulation and investment trust in the cryptocurrency market. WLF is structured so that the Trump family holds a significant stake and receives a substantial portion of the token sales revenue. Furthermore, figures like Justin Sun, who avoided SEC investigations shortly after investing, hold advisory positions at WLF, revealing connections with regulation and sparking criticism of market distortion.
The Need for Policymaker and Market Response
The researchers emphasize that "political signals act as practical information for digital asset investment in this era" and argue that policymakers should establish mechanisms to address market distortion and regulatory avoidance issues. As cryptocurrency market investors must make investment decisions in a complex environment that combines various factors such as economics, policy, and regulation, governments and regulatory agencies should also focus on establishing clear and transparent standards to restore market trust.
As such, Trump's remarks are not just a simple boon but are causing structural changes in cryptocurrency price formation and investment patterns, emerging as important investment and policy issues across the economy.
*Source URL:
https://www.blockmedia.co.kr/archives/906081
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