(Bloomberg) -- Crypto may emerge as the primary “Trump Trade” during the current election cycle with Republican prospects improving and the party’s standard bearer increasingly embracing a pro-crypto viewpoint, according to Bernstein analysts.

Most Read from Bloomberg

• How Long Can High Rates Last? Bond Markets Say Maybe Forever

• Jain Global Raises $5.3 Billion, Secures Cash From Abu Dhabi

• Nvidia Sales Grow So Fast That Wall Street Can’t Keep Up

• BuzzFeed Struggles to Sell Owner of Hit YouTube Show ‘Hot Ones’

• Tech Keeps a Lid on US Stocks as Nvidia Tumbles: Markets Wrap

Republicans see a favorable stance on the crypto industry as a way to both win over voters and get campaign funding from super PACs who back pro-crypto politicians, Gautam Chhugani and Mahika Sapra wrote in a report Monday.

The original “Trump Trade,” was coined during the simultaneous surge in US stocks, Treasury yields and the dollar that followed Donald Trump’s victory in the 2016 presidential election. A Trump victory this time around would lead to a crypto rally bolstered by institutional adoption and an improved regulatory environment, according to the report.

“The Republican side sees crypto not just as a vote bank but also a meaningful source of funding,” the analysts wrote. “If the election sentiment shifts more Republican, crypto would end up as the primary ‘Trump trade’ and hopes of a favorable regulatory regime would change the ‘use-case’ narrative around blockchains.”

Earlier this month, Trump met with the leaders of several Bitcoin mining companies at Mar-a-Lago and voiced his support for crypto. He said that he would be an advocate for the crypto mining industry if he were to become president again.

Trump later posted a message on his Truth Social account that he wants all remaining Bitcoin to be “MADE IN THE USA!!!”

Despite his pro-crypto signaling, Trump could still backpedal and revert to being a crypto skeptic if he were to be elected, according to a report from TD Cowen.

Cowen’s report states that what Trump says about crypto during the first presidential debate of the 2024 election will be a bellwether for the potential regulatory actions of his administration.

“If [Trump] suggests anything other than total support as this could feed anxiety that he will revert to the skeptical approach from his first term if he is re-elected,” the report states.

The report also noted that President Joe Biden may use Thursday’s debate to reposition his own stance on crypto.

The US Securities and Exchange Commission has generated scorn from crypto advocates during the Biden administration for its aggressive crack down against crypto trading platforms that it accuses of trading unregistered securities. Still, many observers consider the SEC’s stance to be softening since it approved Bitcoin and Ether exchange-traded-funds earlier this year.

Bitcoin ETFs have spurred institutional adoption of the world’s largest cryptocurrency and have led it to rally nearly 37% this year. Ether is up almost 40% even though its ETFs are not officially on the market yet.

“We would urge caution on reacting to either candidate on crypto,” the Cowen report said. “Words may matter, but ultimately we believe it would be a mistake to assume either candidate will deliver.”

Most Read from Bloomberg Businessweek

• How Jeff Yass Became One of the Most Influential Billionaires in the 2024 Election

• Corporate Women’s Gains Fall Victim to Anti-Woke Backlash

• How to Do a Four-Day Workweek That Actually Works

• Ilya Sutskever Has a New Plan for Safe Superintelligence

• More Disabled Americans Are Employed, Thanks to Remote Work

©2024 Bloomberg L.P.