JPMorgan sees Trump’s Bitcoin and crypto deregulation as a win for U.S. banks

Stefan Gratzer, JPMorgan’s managing director and head of institutional wealth management for Switzerland, said promised policy changes on tax, crypto, and deregulation could impact banks during the first two years under Trump’s government. Gratzer added that it would be crucial to see how Trump’s policy about crypto played out.

According to the JPMorgan official, Trump’s pro-crypto policies were completely new, and nobody knew what they meant. However, Gratzer insisted that the optimism built around Trump’s promised deregulation and tax cuts would unlock gains in an already flourishing economy. He pointed out that many expected Trump’s crypto deregulation, among his other promises, to turbo-charge economic growth, just as the Fed tilted towards an ‘easy money stance.’

Deregulated crypto market to offer huge benefits to banks like JPMorgan

The first two years under Donald Trump’s second term could be “quite impactful” if policy changes are made on tax, deregulation and crypto, according to Stefan Gratzer, managing director at J.P. Morgan Private Bank https://t.co/d4cTQoD6qw

— Bloomberg Crypto (@crypto) November 10, 2024

JPMorgan’s Gratzer noted that Trump’s support in the Senate and the House could see his pro-crypto policy changes pass in the next two years. He continued to explain that a deregulated crypto market was likely to drive new business for U.S. lenders. Gratzer’s comments suggested that Trump’s comeback was set to have profound implications for sustainable investing. Historically, a surge in crypto prices dovetailed with monetary policy easing, making money borrowing cheaper.

Mike Mayo, analyst at Wells Fargo, also noted that Trump’s policies could be a regulatory game changer for the banking industry. Reduced regulatory risks could help banks by driving loan growth, investment bank revenues, and a more pro-growth attitude that could eventually improve banks’ bottom line.

As markets continued to react to Trump’s reelection, bank stocks and crypto were among the biggest beneficiaries as Bitcoin broke above the 80K mark, according to CoinGecko’s recent data.

A Quartz report also showed that JPMorgan Chase and Citigroup shares surged 8%, Wells Fargo stock gained 12%, Bank of America climbed 7%, Morgan Stanley shares increased by 9%, and Goldman Sachs added 10% in the wake of Trump’s win. 

Notably, the ripple effects of Trump’s policies would be felt globally as economies closely tied to the U.S. trade policy brace to bear the brunt.

European banks set to face tougher competition under Trump’s government 

According to Reuters, Europe’s banks were likely to face a significant challenge in closing the gap on their U.S. rivals like JPMorgan Chase as Wall Street awaited a new era of Trump’s deregulation. U.S. banks had soared in value and stolen market share in investment banking as lenders in Britain and the Eurozone struggled with weak economies and low profitability. 

David Materazzi, the CEO of Galileo FX, highlighted that deregulation and tax cuts in the U.S. contrasted with Europe’s strict oversight and low-interest-rate grinds. He said that U.S. banks could optimize capital and ramp up loan volumes in ways that their European counterparts could not match if U.S. banks received the expected policy support. Michael Schulman, chief investment officer at Running Point Capital Advisors, asserted that European banks would be competing with ‘one hand tied behind their backs.’

However, Reuters reported that the pace of any deregulation would be determined by the new regulators and key policymakers that President-elect Trump had yet to nominate.