ANDIKA BULLETin 11 NOV 2024

The Republican sweep is the best outcome for digital assets, bringing regulatory and other changes, with Standard Chartered projecting this to drive total crypto market cap to USD 10tn by end-2026 from USD 2.5tn now!

That's a potential 4X increase for Bitcoin alone!

Specifically, StanChart expects the new administration to follow through on the Trump campaign’s proactively positive stance towards digital assets. Furthermore, any changes are likely to come relatively early in the administration to take advantage of Republican control of Congress before the midterm elections in November 2026. I expect the following specific developments:

1. Repeal of SAB 121. SAB 121, an SEC guidance document on digital assets, requires entities that act as custodians for crypto assets to list the assets on their balance sheets and create a corresponding liability of equal value. In effect, this blocks US banks from crypto custody and spot offerings. The removal of SAB 121 is expected to pave the way for further adoption of digital assets by institutional investors.

2. Passage of stablecoin bills. Stablecoins are becoming an important real-world use case for digital assets. Three significant bills aiming to create guardrails for banks to issue stablecoins were brought to the House over the past 12 months, but little progress was made. More progress on this is likely under the Trump administration in early 2025. This should pave the way for the expansion of this use case, further validating the asset class as a whole.

3. Changes at the SEC. The SEC has taken a firm stance against digital assets under current Chairman Gary Gensler. It has brought court cases against Ripple (wherein it suggested that the majority of digital assets are securities) and Grayscale; it was also initially slow to approve spot ETFs. Trump explicitly stated during his campaign that he would replace Gensler.

4. Potential for a Bitcoin reserve fund. Although this is currently a low-probability event, Trump mentioned in July that he would keep any Bitcoin held by the government (210,000 BTCs at the time), so it needs to be kept in mind. Such a move would have a large price-positive impact on such a small asset class.

The U.S. president-elect made cryptocurrency a key part of his campaign this year, promising to protect and boost the industry in America and end the SEC's crypto crackdown.

Trump had also proposed to develop a strategic Bitcoin reserve and appointing pro-crypto regulators. 

Bitcoin topped USD$80,000 for the first time in history overnight, now up over USD$10,000 since the election night blowout by Trump.

Bitcoin ETFs have seen massive inflows in the days since the election.

Crypto Rover, for instance, cited Bitcoin’s tendency to establish record highs “50-60 days after the US elections,” noting that the price could reach USD$100,000 (AUD$151,000) by January 20245 if the fractal plays out as intended.

Now, I'm now going to provide my opinion on The #1 Investment to own during Trump's 2nd Presidential Term.

First and foremost, President Trump LOVES the stock market.

During President Trump's first term then-Treasury Secretary Mnuchin stated that the Trump administration viewed the stock market as a "barometer" for the economy. Put another way, with stocks, President Trump had a real-time measure he could point to when claiming that his agenda was benefiting Americans' net worth.

Between 2016 and 2020, President Trump posted 256 tweets mentioning the term"market", 162 tweets mentioning the terms "stock market" another 26 tweets mentioning "stocks," 23 tweets mentioning "highs" in relation to stocks, and finally 15 tweets mentioning the "S&P 500."

All told, we're talking about 500 or so tweets touting the US stock market in a four year span. That comes to at least TWO tweets per week during Trump's first term!

I do not anticipate this focus on stocks to change during Trump's 2nd Term. Say what you will about Donald Trump, but he loves wealth. And the US stock market is the 2nd most-owned asset class in America behind housing: 56% of American households have exposure to stocks vs. 65% who own real estate.

With that in mind and as witnessed in the overnight US market trade the US stock market will push higher. This is particularly true when you consider the macro environment President Trump will inherit and create.

The Fed is already started cutting interest rates and is likely to do another cut tomorrow. So, Trump will inherit a stock market driven by Fed initiating a new easing cycle, at a time when the economy is still growing.

This is as close to a "goldilocks" environment for stocks you can get. And Trump will inherit this without lifting a finger.

Which brings me to the #1 investment to own during Trump's second term.

It's one the President has personally endorsed. Heck his Vice President, JD Vance, even owns it!

I'm talking about Bitcoin.

Believe it or not, a 2nd Trump Term will also be extremely beneficial for Bitcoin.

Indeed, Trump views Bitcoin and Bitcoin mining as part of his "America first" economic plan as the below quote demonstrates.

This is not Trump just posturing...

Trump is speaking (spoke) at a Bitcoin Conference in Nashville on July 27th. He did NOT cancel his appearance despite being shot two weeks' prior. This is a strong signal that this conference is of personal significance to Trump.

Trump won't be the member of his administration who is pro-Bitcoin, his pick for Vice President is J.D. Vance, who personally owns between $100,000 and $250,000 worth of Bitcoin as detailed by financial filings.

And finally, Elon Musk, who we know has developed a very a strong relationship with President Trump, is a big proponent of crypto currencies, including Bitcoin. Indeed, Tesla (TSLA) itself owns nearly $1 billion in Bitcoin.

Put simply, the President, the Vice President, and one of their biggest economic supporters and advisers are all involved in Bitcoin in some fashion.

Bitcoin is fundamentally a liquidity play. And as I've outlined earlier in this Bulletin (see and study the 4th chart from the start) the Fed has initiated a new easing cycle. And Trump will be pushing HARD on the Fed to do more.

How to buy some Bitcoin.

2 ways you can easily own some Bitcoin and become a HODL'er (hold on for Dear life)

1: Open an account with a crypto exchange and buy direct from them.

I personally use Australian firm Coinspot. Because they are an Australian Crypto firm all the Crypto is traded in AUD not USD so it's easy for your accountant to work out your tax return. The ATO treats BTC as any other asset and capital gains tax applies. But if you do buy direct then you need to take responsibility for your Bitcoin's custody or ownership. It's vital as you build up a qty that you transfer off the Crypto exchange you trade on and onto your own highly secure external hard wallet (aka a Thumb Drive). You also need to securely protect your 12 or 24 word seed phrase.

A seed phrase consists of 12 or 24 randomly chosen words that are required to restore your Crypto holdings should you lose your hard wallet or should your hard wallet malfunction (it is a piece of tech hardware after all and these thing can break)

Now if that sounds all too hard then there are currently three ASX listed spot Bitcoin ETF's

Below is a summary of them

At the time of writing this BULLETin spot Bitcoin in AUD is $122,116 per coin.

The VBTC ETF seems to trade closest to the Spot Bitcoin price so I would tend to go with them over the other 2 - purely a price reason nothing more as the other two are equally fine BTC ETF's

Now these trade like a regular share, like BHP, so you just need a broking account to trade them.

Now 4,912 shares of VBTC will equal 1 Bitcoin but you don't have to own 4,912 shares of VBTC. You can own just 49 shares (1%) or pick any amount of shares to get a position in BTC.

These are very liquid so easy to trade but you can only trade when the ASX is open - so Monday to Friday during mkt hours. Bitcoin itself does trade 24/7 365 so you can't trade ETF on the weekend or when the mkt is closed. But you don't have to worry at all about the self custody of the Bitcoin. The ETF issuer covers all that for you.

So with VBTC (or the others if you like), we've got a new, more liquid, easier means for investors to own Bitcoin... with the next President of the United Stated and his closest advisers all favouring Bitcoin as an investment.

This is about as perfect of a set-up as an asset class can get.

Action to Take: Buy the ASX listed VanEck Bitcoin ETF - VBTC

This information contains unsolicited general information only, without regard to any individual’s investment objectives, financial situation or needs. It is not specific advice for any particular investor or trader. Investment in the stock market involves risk.

This information may not take into account your investment objectives or financial situation, and you should obtain advice based on your own individual circumstances before making an investment decision.

This information is made available to you by ANDIKA Pty Ltd ABN 41 117 403 326, a licensed securities and derivatives dealer (AFSL # 297069).