Trump Administration Could Boost M&A and Benefit Crypto: Bitwise

Highlights:

• Policies under the Trump administration and M&A deregulation could fuel crypto growth and corporate expansion.
• Tokenization may empower small businesses to access capital markets and unlock opportunities.
• AI and Bitcoin could shape this year, with more companies holding Bitcoin and tokenizing.

Hunter Horsley, CEO of Bitwise Asset Management, suggests that Trump-era economic policies could significantly impact the crypto sector. In a series of posts on X on January 5, Horsley stated that he believes the world is “on the precipice of change” this year.

Trump’s Return and M&A Deregulation Could Fuel Growth and Crypto Adoption

Horsley said deregulating mergers and acquisitions could help major companies like Google or Amazon grow even more through strategic deals. Mergers and acquisitions (M&As) involve combining businesses, either by merging two companies or one company buying another. 

M&A activity has remained stagnant in recent years. Data from Dealogic shows that 2024 saw a slight increase in announced deals, reaching $1.4 trillion. This is an improvement compared to 2023. However, it still falls short of pre-pandemic levels. The return of Trump as president could drive M&A activity. Key factors include a favorable economic environment, lower interest rates, and changes in regulatory policies.

This trend could result in more power and market share for a few large companies. Mid-sized firms may struggle to compete with these giants. Horsley believes that this consolidation will drive the adoption of crypto. “The conceptual premise of crypto is not trusting large institutions to do what’s in your best interest. The big getting bigger accentuates this,” he added.

Corporate giants like Google and Amazon are exploring blockchain to enter the crypto market. Amazon Web Services offers Managed Blockchain, helping businesses build and manage scalable blockchain networks. Google is boosting its crypto presence with blockchain-as-a-service on Google Cloud. This helps businesses create decentralized applications. Major firms are using blockchain and M&A to expand and promote decentralized systems.

Trump administration may unfreeze M&A.

Large corporates — mag 7, etc — may finally be able to wield their market cap. Amazon could buy Instacart. Google could buy Uber. etc etc

The big may get bigger, and the middle may shrink.

If that happens, I think it will accelerate…

— Hunter Horsley (@HHorsley) January 5, 2025

Horsley shared his thoughts on tokenization. He said most attention has been on its demand-side benefits, like easier access to money market funds. However, he believes the real impact lies on the supply side. Tokenization could help small businesses access capital markets, unlocking new opportunities.

Horsley Predicts AI and Bitcoin Will Shape the Future of Business

Horsley shared his thoughts on AI, saying it could lead to a surge in companies, including tokenized ones. He believes AI could greatly increase the number of niche businesses. These businesses might not go public but could tokenize, creating a new long-tail capital market.

Horsley predicted that this year, many companies will start holding Bitcoin. He called these companies “Bitcoin Standard Corporations.” MicroStrategy is the biggest corporate holder of Bitcoin, with 446,400 coins worth about $43.7 billion. In the previous year, several smaller companies revealed plans to invest in and hold Bitcoin as part of their treasuries.

Crypto Market Surges Following Trump’s Re-election

Horsley’s statement comes during a rebound in the cryptocurrency market. This follows Trump’s recent re-election. Many in the crypto industry welcome his pro-business policies. These policies support digital assets and blockchain. As a result, the market has seen a bullish trend.

Experts attribute the surge to a more favorable regulatory approach under Trump’s administration. Since Trump’s election win, the cryptocurrency market has grown a lot. Bitcoin, for example, rose from about $69,000 on November 8 to over $100,000 in early December.