Jefferies Predicts Crypto Stocks and Gold Miners to Benefit from Trump's Bitcoin Support
Date: 2024-07-23 Author: Gabriel Deangelo Categories: CRYPTO PAYMENTS
Analysts at Wall Street investment bank Jefferies are making optimistic predictions about the impact of former President Donald Trump's "overt" support for Bitcoin on the cryptocurrency market and gold miners. According to their research, factors such as a possible increase in inflation, budget deficits and political pressure on the Federal Reserve could undermine the dominance of the US dollar and make cryptocurrency assets more attractive to investors.
In its research report, Jefferies highlighted several key Trump policies that could have a significant impact on the stock market, especially in the cryptocurrency sector.
1. Extension of Tax Benefits
One major factor, analysts say, is Trump's plan to extend Tax Cuts and Jobs Act (TCJA) benefits, which expire next year. The extension is expected as a way to preserve tax breaks for businesses and individuals, which could boost consumer spending and corporate profitability. These changes could indirectly have a positive impact on digital asset sectors by increasing disposable income and investment.
2. Reduced Corporate Tax Rates
Trump has proposed further cuts to corporate tax rates, which could significantly improve the profitability of American companies. The market optimism generated by these policies may lead to increased investment in various sectors, including cryptocurrency assets.
3. Increase in Tariffs and Inflation
Trump has also expressed his intention to increase tariffs on Chinese goods, which could lead to higher inflation in the United States and change the dynamics of global trade. Jefferies noted that in an environment of rising inflation and currency devaluation, investors may begin to look for alternative currency assets such as cryptocurrencies and gold to hedge risks.
4. Energy Sector and Climate Initiatives
A potential decline in climate initiatives and increased oil drilling could benefit the energy sector but negatively impact clean energy companies. However, such policies could also indirectly benefit cryptocurrencies by reducing regulatory pressure and creating a more favorable investment environment for energy-intensive Bitcoin mining operations.
5. Reducing Geopolitical Risks
Jefferies also pointed to Trump's plans to reduce US involvement in global conflicts such as the war between Russia and Ukraine. It is expected that this could reduce geopolitical risks and promote market stability. Sectors that are negatively correlated with traditional commodity prices could benefit from this, including cryptocurrencies as an alternative store of value.
Stocks You Can Benefit from
Jefferies has highlighted several cryptocurrency stocks that could benefit significantly from Trump's policies. These include:
- Coinbase and MicroStrategy: These companies are active in the cryptocurrency business and could benefit from increased interest in Bitcoin.
- Marathon Digital, Riot Platforms and Cipher Mining: Large public Bitcoin miners that could also benefit from favorable policies.
- CME Group, Square and PayPal: With active involvement in the cryptocurrency sector and PayPal's recent stablecoin launch, these companies could benefit from the growing interest in digital currencies.
Jefferies emphasizes the importance for investors to stay abreast of policy changes and adapt their strategies according to new trends. Trump's support for cryptocurrencies could create significant growth opportunities in the cryptocurrency sector, making it more attractive to investors.
