Bitcoin: The Winner of the 2024 Election

The 2024 election cycle marks a turning point for Bitcoin and the broader crypto industry, as pro-Bitcoin politicians have decisively secured Congress and the White House. This new political landscape positions 1Konto to thrive, benefiting from a favorable regulatory and business environment that is set to fuel growth across the broader digital asset industry, unlocking new opportunities for all participants.

The Demise of Operation Choke Point 2.0

With Sherrod Brown losing his Ohio Senate race to Bernie Moreno, the death of Operation Chokepoint 2.0 is imminent, representing a breakthrough for the digital asset industry. Brown was a leading figure behind Operation Chokepoint 2.0, which created significant banking constraints for the crypto sector. While 1Konto was relatively shielded, many of our counterparties faced acute restrictions, especially during Q3 2023 and June 2024. Moreno's victory signals a path toward eased banking access, even for offshore entities currently relying on third-party money institutions, as they eagerly seek U.S. domestic banking.

Strategic Bitcoin Reserve Legislation on the Horizon

Cynthia Lummis' proposed Strategic Bitcoin Reserve Legislation is expected to receive a vote in 2025, thanks to the Republican Senate majority. This legislation aims to acquire 1 million Bitcoin over five years, roughly 5% of the total supply, in a move similar to the U.S.'s approach to gold reserves. President Trump reinforced this vision during the Bitcoin 2024 Conference, pledging support for such a reserve.

SEC Leadership Shift: Gensler Out

Another promise made at the Bitcoin 2024 Conference was the removal of Gary Gensler as SEC Chair on day one, a commitment Trump is expected to fulfill, noting the strong support it received from the crowd. Hester Peirce is the leading candidate to succeed Gensler. Known for her pragmatic approach, Peirce’s leadership would be a massive win for the Bitcoin and crypto community as she aims to adapt SEC policies to evolving technology and market dynamics.

In addition to Peirce, Dan Gallagher, currently Chief Legal and Compliance Officer at Robinhood, is also being considered for a critical financial agency position. Gallagher's experience and support for crypto innovation align well with Peirce's pragmatic approach, potentially setting the stage for a more balanced regulatory framework under the new administration.

Changes at the SEC and White House would lift significant constraints for banks and institutions holding Bitcoin directly on their balance sheets. As more institutions see nation-states accumulating Bitcoin—mirroring the anticipated U.S. strategic reserve—we expect an exponential increase in institutional Bitcoin holdings. 1Konto's path forward is clear—we are committed to providing the infrastructure necessary to support this surge in institutional activity through our robust OTC trading and lending desks, primed to meet rising demands for secure, efficient Bitcoin-backed financial solutions. This shift will create demand for trading and borrowing against Bitcoin, and 1Konto is ideally positioned to support these activities through our institutional OTC trading and lending desks.

A New Era for Bitcoin and Digital Assets

President Trump’s policies also include support for Bitcoin mining and self-custody and even floated the idea of zero tax on Bitcoin sales, framing Bitcoin as a currency. These policies could position America as the global leader in the digital asset space, reversing the trend of corporate migration and brain drain from the U.S.

Supportive Voices in Leadership

Vice President-elect JD Vance's public support for the digital asset space adds more momentum. Vance owns upwards of $500k in BTC and has exposure to Solana, making him an outspoken advocate for the ecosystem. He even hinted at ending the Fed, emphasizing his belief in decentralized financial infrastructure.

The Expanding Pie for Bitcoin and Digital Assets

The results of the 2024 election cycle have fundamentally changed the playing field for Bitcoin and digital assets. In the House of Representatives, 263 pro-crypto candidates were elected versus 117 anti-crypto candidates, while in the Senate, 18 pro-crypto candidates won compared to 12 anti-crypto candidates. This pro-crypto majority represents a significant shift in favor of digital assets, providing a supportive environment for further growth. With the incoming administration’s clear support for developing the digital asset ecosystem, opportunities are expanding not just for 1Konto but for the entire industry. Institutions are positioned to invest heavily in Bitcoin and leverage stablecoins for efficient cross-border payments. Regulatory clarity, combined with more favorable leadership at key regulatory agencies, will foster an environment of growth and innovation.

Happy Trading!

The 1Konto Team

About 1Konto
1Konto is a leading OTC liquidity provider, offering institutions seamless on/off ramp solutions for stablecoins, fiat currencies, BTC, ETH, and select altcoins. Through its flagship platform, 1KPrime, clients access deep liquidity, best price execution, and streamlined trading and settlement.

In addition to trading, 1Konto offers Bitcoin-backed loans with no rehypothecation, ensuring assets are securely held in bank custody. This enables institutions to unlock liquidity while their collateral remains secure. By providing trusted, secure trading and lending solutions, 1Konto helps institutions efficiently manage risk and optimize their digital asset strategies.

Reach out today for more information on 1Konto's OTC trading and lending desk.

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The content of our substack market briefs is for informational purposes only and should not be construed as financial advice. Any investment decisions made based on the information provided are solely at your own risk. We do not endorse or guarantee the accuracy or reliability of the information shared. It is recommended to consult with a professional financial advisor before making any investment decisions.