Crypto Prices Jump, Will Funding Follow?

Crypto enthusiasts rejoiced Wednesday as former President Donald Trump seemed certain to reclaim the White House — and likely bring much more crypto-friendly policies to the federal government.

Prices of the two most popular cryptocurrencies soared, with Bitcoin jumping about 7% and flirting with $75,000 by midday and Ether climbing 9% to about $2,650.

Large public companies specializing in crypto also saw a nice bump, with shares of Coinbase popping 24% in midday trading.

The reaction was expected, as Trump positioned himself as the pro-crypto candidate early in the race. During the summer, Trump spoke at the biggest bitcoin conference of the year and promised the federal government would stop selling the Bitcoin amassed from seizing assets of financial criminals.

In addition, he also said he would create a presidential advisory council around crypto.

Perhaps most importantly to crypto fans, he has promised to oust SEC Chairman Gary Gensler, who has taken a strict regulation-by-enforcement approach to crypto.

What it may mean for venture

As the crypto market pops in price the day after the election, the question remains what it could mean for crypto funding.

Funding to crypto startups hit highs in 2021-22, with those two years seeing more than $37 billion invested in over 3,000 deals.

However, crypto soon slowed as the venture market stalled out and scandals such as the spectacular implosion of Sam Bankman-Fried’s FTX exchange hit.

So far this year, crypto startups have collected only $3 billion from investors in just 528 deals, per Crunchbase data. Last year, startups in the sector raised only $3.6 billion in 889 rounds. Montreal-based Blockstream, a blockchain developer of digital asset infrastructure, raised the largest round of the year thus far — a $210 million in convertible note funding.

With the U.S. perhaps being a bigger player in the crypto market and possibly having different enforcement in the sector, those annual funding numbers may start heading high — just like Bitcoin prices.

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Illustration: Dom Guzman