Trump’s promises to the crypto industry may mean the near-term bitcoin price is tied to the outcome of the election, the report said.

Jefferies said bitcoin mining profitability following the halving is better than feared at the start of the year.

Larger bitcoin miners are still in growth mode, the bank said.

With multiple politicians, both Republican and Democrat, and former president Donald Trump in attendance at the Bitcoin Nashville conference last week, there was a political undertone to the crypto event, investment bank Jefferies said in a research report on Monday.

“His overtures to the industry to install crypto-friendly regulators may have the effect of near-term BTC price being tied to the outcome of the U.S. presidential election,” analysts Jonathan Petersen and Joe Dickstein wrote.

Trump promised to maintain a strategic bitcoin reserve and never sell the government’s seized bitcoin (BTC), he said in his Nashville speech.

Jefferies notes that Trump pledged to pick crypto-friendly regulators, to create a crypto industry presidential advisory council, and to make the country the “crypto capital of the planet.”

This positive shift in Trump’s policy towards crypto is very recent, the bank noted, but it could impact the price of bitcoin in the near term, depending on who wins the election in November.

With bitcoin having gained about 5% since the halving in April, and the network hashrate dropping a total of 8% in May and June, the “profitability of mining is modestly better than feared at the beginning of the year,” the authors wrote, with mining revenue per exahash down 40%-45% instead of 50%.

Jefferies notes that the larger bitcoin miners are still in growth mode, and have orders in place to materially expand their installed hashrate. Hashrate is a proxy for competition in the industry and mining difficulty.

The bitcoin mining consolidation phase is here, the report said, with CleanSpark (CLSK) recently agreeing to acquire GRIID (GRDI) and Riot Platforms (RIOT) making a public offer for Bitfarm (BITF), which was subsequently rejected.

Comments from mining firm management teams suggest that there will likely be more M&A in the sector, “with access to power as far more valuable than the mining fleets,” the report added.

Read more: Trump’s Talk of Bitcoin Reserve for the U.S. Leaves Industry Waiting for More Details