Amid the backdrop of continuous banking difficulties, the cryptocurrency realm holds onto a glimmer of hope. The recent electoral triumph of Donald Trump is seen as a potential game-changer, with the industry anticipating improved ties with banks. This optimism finds its roots in Trump's pledges to set up a national Bitcoin BTC/USD reserve and a regulatory council.

Hope Amidst Challenges

Since the downfall of FTX and other firms in 2022, the crypto sector has been grappling with significant obstacles in securing banking partners. As reported by The Wall Street Journal on Wednesday, many banks have distanced themselves from crypto companies, a situation exacerbated by regulatory warnings and legal actions against entities like Coinbase COIN, Kraken, and Binance BNB/USD. However, Trump's recent appointment of venture capitalist David Sacks as the White House crypto czar has injected a sense of hope for policy shifts. Sacks has been vocal about addressing banking issues on X, formerly Twitter. Despite these developments, industry insiders note that banks still continue to close accounts of crypto firms.

Navigating the Poisoned Chalice

Nic Carter of Castle Island Ventures sheds light on the ongoing difficulties in finding banking partners. "Banking crypto is still a poisoned chalice today," he remarks. "They do not want the Eye of Sauron descending upon them"—a reference to the menacing villain in "The Lord of the Rings" series. The involvement of Trump allies such as Marc Andreessen and Elon Musk has brought these issues back into the spotlight, with many crypto founders sharing their banking woes. Congressional committees are now delving into banking access, with bipartisan support for legal businesses to access financial services. Nevertheless, banks remain cautious due to the volatility and fraud risks associated with crypto, awaiting potential changes in government guidance.

Trump's Potential Impact

The election of Donald Trump has already left a substantial mark on the cryptocurrency market. According to a JPMorgan report, November witnessed a remarkable rally in the crypto space, driven by political developments and a surge in investor sentiment following Trump's victory. This rally had a positive ripple effect on tokens, decentralized finance projects, stablecoins, and publicly traded companies with ties to cryptocurrencies. Moreover, Trump's potential return to the White House could herald a new era of cryptocurrency-friendly policies. He has shown interest in boosting market metrics, including cryptocurrencies, and has even taken credit for Bitcoin's recent price surge. His administration's focus on these areas could lead to significant transformations in the crypto industry's relationship with banks.