An under-the-radar Trump trade that will benefit from pro-crypto stance and deregulation

President-elect Donald Trump’s second term could mean more gains for Block , according to Bernstein. “The crypto piece is obvious – bitcoin is ~3% of gross profits and SQ has been strategically focused on bitcoin mining hardware and self-custody wallet,” analyst Harshita Rawat told clients. “But SQ has also come under regulators’ scrutiny (FinCen, CFPB) recently around its Cash App and Afterpay businesses. Lower regulatory scrutiny may also mean that SQ can lean into more Cash App products (e.g., on lending, commerce).” SQ YTD mountain SQ, year-to-date Rawat also sees potential for Block’s inclusion in the S & P 500 and an acceleration of Square gross payment volume – which is the total dollar amount of card payments processed by sellers using the Square platform – heading into next year. The President-elect has taken a pro-crypto stance during his time on the campaign trail , pledging to ensure that the federal government doesn’t sell off its bitcoin holdings. Trump has also vowed to unseat U.S. Securities and Exchange Commission Chairman Gary Gensler, who has been more aggressive with regards to regulation. Wall Street is already largely bullish on the name, with 36 of the 48 analysts covering it having a strong buy or buy rating. Its average price target of $88.18 reflects around 1% upside from Tuesday’s close. This comes as the stock has surged nearly 13% in 2024 and more than 25% in the past one month. A more favorable regulatory environment could also spell gains for Visa , which has rallied around 19% this year, according to Bernstein. Back in September, the Department of Justice sued the world’s biggest payments network , accusing it of having an illegal monopoly over debit payments. “The DOJ lawsuit likely shaved some turns off of Visa’s multiple,” the analyst said. “While it is unlikely that the DOJ pulls the case, it’s possible that President-elect Trump names a more pro-business Head, who might be more amenable to a weaker settlement with Visa.” With that in mind, Rawat likes Visa over Mastercard in the near term. She also said that Capital One’s planned acquisition of Discover Financial Services – the likelihood of which has increased since the election’s outcome – could also dampen Mastercard shares in the long term. That stock has seen the biggest year-to-date gains of the three, rising around 24%.