How This Crypto Hedge Fund Nailed the Trump Trade

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Former President and now President-elect Donald Trump’s landslide victory in the U.S. election shocked many, but not Quinn Thompson.
The founder of crypto hedge fund Lekker Capital has been publicly bullish on Trump since at least mid-March and remained steadfast even as the market vacillated. He positioned his fund accordingly going into Tuesday’s election — he bought solana (SOL) and bitcoin (BTC) miners involved with artificial intelligence — despite a multitude of polls claiming that the race was a toss-up or that Vice President Kamala Harris was in the lead.
The result? It has been Lekker’s most successful trade since the fund was launched six months ago, Thompson told CoinDesk. He declined to give exact numbers. SOL has surged 13% in the last 24 hours and isn’t far from multi-year highs. AI-related bitcoin miners such as Core Scientific (CORZ), Hut 8 (HUT) and HIVE (HIVE) are up roughly 10% Wednesday, while BTC is soaring 8.7% and hit a new all-time high of $75,600.
“It’s difficult for investors to take public stances because politics is such a divisive topic. Just like how it’s taboo to talk about it with strangers,” Thompson said, before adding that herein lies the appeal of investing in a hedge fund that focuses on macroeconomics.
“People invest in macro-driven strategies because they are non-consensus by requirement,” Thompson wrote in a Wednesday email to his fund’s investors. “In order to get paid for being correct in macro, it requires going against the grain for long periods of time and developing conviction on ideas that at times strongly go against popular opinions.”
Trump won the Electoral College and popular vote, but that’s not all: Republicans now control the Senate and may well keep control of the House of Representatives — giving them the presidency and all of Congress. For Thompson, that’s a clear mandate for a socially liberal but fiscally conservative government — one that is bound to make life easier for the crypto sector after the impediments posed by current President Joe Biden as well as Trump during his first term. Trump reversed course on crypto this year, vowing to make the U.S. a crypto leader.
Read more: Trump Backs U.S. Bitcoin Reserve and Says Democrat Win Will Be Disaster for Crypto: ‘Every One of You Will Be Gone’
“This is one of the most monumental days in the history of crypto. The industry has been vehemently opposed by the most powerful entity in the world — the U.S. government — for four years straight and the target of many partisan political agendas as a result,” Thompson told CoinDesk. “Not only has that been lifted in real-time to be more neutral, but we’ve overnight moved to a stance of adoption and embrace,” Thompson added. “This team understands the industry and [its] potential and plans to fully harness that. It is simply impossible to price in the positive knock-on effects of this overnight.”
There’s a few reasons why Thompson bet on Trump.
One of them was voter preference — the economy, immigration and foreign policy were at the top of the priority list for most voters in 2024, compared to the pandemic and racial inequality in 2020. Harris was vulnerable to these issues due to the ongoing wars in Ukraine and the Middle East, the bout of inflation that occurred early in Biden’s term and the administration’s policies regarding illegal migrants.
Thompson also predicted that Democrats would face turnout issues due to a lack of enthusiasm for Harris, who only entered the race in July after Biden dropped out, while Republicans would be optimistic about their candidate.
That’s not to say that everything went perfectly. Thompson said he failed to take profits on portions of the trade before the late October pullback, which saw bitcoin fall from $72,000 to $67,000 after Trump’s odds of winning dropped from 65% to 55% on Polymarket.
“Last minute outlier/wrong polls made people second-guess and become very fearful and uncertain,” he said.
Edited by Nick Baker.
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Tom Carreras is a markets reporter for CoinDesk. He holds BTC, ETH and SOL above CoinDesk’s disclosure threshold of $1,000.