The Trump Effect: A bull market catalyst for cryptocurrencies?

Following the attack on Trump, his winning probability skyrocketed to 70%, with the market anticipating his re-election as President of the United States. Simultaneously, considering Trump's recent statements in support of cryptocurrency development, the cryptocurrency market has experienced a noticeable rebound, with significant gains in Bitcoin and Ethereum, and a rapid rise in Bitcoin concept stocks.

Trump's stance on cryptocurrencies has undergone a complex evolution. During his initial tenure, the Trump administration was skeptical and dismissive of cryptocurrencies, criticizing their lack of intrinsic value and susceptibility to illegal activities. However, in the 2024 election, Trump made a 180-degree shift in his stance, publicly supporting cryptocurrency development and stating, "Ensure the future of cryptocurrencies and Bitcoin happens in the USA." He also accepted cryptocurrency donations in his campaign to garner voter support.

Additionally, insights can be gleaned from Trump's campaign promises and governance direction regarding the future of the cryptocurrency industry. The Trump administration will continue to support financial technology innovation, including blockchain technology and cryptocurrencies. This support may manifest in increased research funding, strengthened patent protection, and collaborations with the private sector. The latest Republican manifesto explicitly mentions support for cryptocurrencies: "The Republican Party will end the Democrats' illegal and un-American crackdown on cryptocurrencies and oppose the creation of central bank digital currencies. We will defend the right to mine Bitcoin and ensure every American has the right to self-custody their digital assets and transact without government surveillance and control."

The cryptocurrency industry has been receiving continuous positive news recently. Besides the key factor of Trump's increased winning probability, there are media reports suggesting that an Ethereum spot ETF product is expected to launch next Tuesday, potentially enhancing cryptocurrency liquidity and investor sentiment.

How should we invest in cryptocurrencies? Multiple digital currency spot ETFs are available for trading on various platforms, distributed across multiple markets. Investors can access the digital currency spot ETF theme in the Hong Kong and U.S. stock markets through the "Markets" - "ETF" section in the mobile app and proceed with trading. Here is a brief overview of some ETF products (ordered by trading volume within the sector):

Issued by BlackRock, one of the world's largest asset management companies, this ETF has the highest trading volume and turnover in its category. As a product under a reputable asset management company, the iShares Bitcoin Trust attracts investors who trust the BlackRock brand. The fund's net assets amount to $19.85 billion.

Features: This ETF is highly compliant, allowing investors to buy and sell IBIT shares during normal trading hours, providing relatively high liquidity.

Risks: Due to its focus on digital currencies, this ETF may experience high volatility and uncertainty. Additionally, it may not always accurately reflect Bitcoin's price movements due to cost and timing constraints.

Issued by Fidelity Investments, this ETF is popular among investors, attracting substantial funds.

Features: This ETF offers a low expense ratio and professional ETF management. Similar to IBIT, it can be bought and sold during normal trading hours. Fidelity has been exploring the digital currency field since 2014, providing a strong research foundation.

Risks: Similar to IBIT, it faces volatility and potential tracking errors.

Issued by Grayscale Investments, this ETF currently has the highest total market value in its category. Grayscale Investments specializes in digital asset investments, and GBTC was one of the earliest products allowing investors to indirectly invest in Bitcoin through traditional financial accounts.

Features: GBTC's net asset value is based on the value of the Bitcoin it holds, but it does not track Bitcoin's price in real-time and is not listed for instant trading on exchanges. However, it can be traded on the OTC market.

Risks: Compared to other spot ETFs, GBTC has limited redemption mechanisms, leading to liquidity issues and potential price deviations. Additionally, its expense ratio is relatively high, reducing investor returns.

In addition to ETFs, we can also pay attention to cryptocurrency-related concept stocks to find investment opportunities in high-quality individual stocks. By searching for "Cryptocurrency Concept Stocks (LIST20010, LIST20074)," you will see a collection of related cryptocurrency concept stocks in the constituent stocks.

Cryptocurrency spot ETFs offer the advantages of high liquidity and convenient trading, relying on regulation and professional management to ensure security, thus eliminating the risk of managing private keys. However, they also have some drawbacks: price tracking may not be precise, prices can be highly volatile due to the nature of digital assets, and management fees can impact returns. Investing in cryptocurrency concept stocks requires selecting high-quality individual stocks to achieve excess returns.

Therefore, investors can choose products that match their investment preferences to complete their transactions.