Hours before the highly anticipated inauguration of the 47th President of the United States Donald Trump, Bitcoin galloped to an all-time high. The flagship cryptocurrency, which was last lower by 2 per cent at $103,558.38, rose overnight to $109,350.72. The widely popular digital currency gained momentum last week in anticipation of the inauguration.
Trump’s pro-crypto approach and policies are likely to further boost the market. In the run-up to his inauguration, crypto entrepreneurs and companies are reportedly relocating to the US after they left the country owing to years of regulatory uncertainty. If the Trump administration fulfills its promises, then the US would be poised to be the global hub of cryptocurrency innovation.
Trump’s ascension to power for the second time is viewed by many from the crypto community as the beginning of a new era, promising more recognition for the decentralised currency. This is also because many foresee Trump announcing an executive order on crypto early into his new administration. Several crypto aficionados are hoping for Trump to create the promised crypto advisory council and a national bitcoin reserve.
Trump has come a long way with cryptocurrencies. During his first term as president, he was largely critical and skeptical about them. Although his stance was not aggressive back then, he has since evolved into a vocal advocate for crypto. Days ahead of his inauguration, Trump launched his memecoin (cryptocurrencies inspired by internet memes) branded as $TRUMP. First Lady Melania Trump also announced $MELANIA memecoins. On the day of the inauguration, these two memecoins had a combined worth of $9.5 billion.
As of January 21, $TRUMP is priced at $35.22 with a 24-hour drop of 41.6 per cent and a trading volume of $19.9 million, while $MELANIA is valued at $4.11 million down by 67 per cent in 24 hours and $4.35 million trade volume. Dogelon Mars (ELON) is in the third spot priced at $0.0002373, experiencing a 35 per cent decline in 24 hours but an increase by 26.4 per cent over seven days, with a $114.19K trading volume.
Under the previous Biden administration, the crypto industry witnessed regulatory scrutiny. With Trump’s crypto-friendly maneuvers, the community is buoyed.
What will happen to cryptocurrencies under Trump 2.0?
In July 2024, Trump, while addressing the Nashville Bitcoin conference, announced that he wanted the US to be a bitcoin superpower under his leadership. In his address, he promised to make the US the crypto capital of the planet and even create a bitcoin strategic stockpile with the currency the government held. One of the notable proclamations he made to the enthused crowd was the promise to sack Securities and Exchange Commission (SEC) chair Gary Gensler once he came to power. Gensler has been frequently endorsing the need for more robust regulation.
Moving from a skeptic to a self-proclaimed ‘First Crypto President’ is one of the most notable shifts in US politics in recent years. In the past, Trump has announced plans to sign an executive order establishing a crypto advisory council.The council, which will reportedly advocate for the crypto industry’s policies, is seen as the cornerstone of Trump’s crypto agenda. The council seemingly aims to address one of the biggest challenges concerning cryptocurrencies—the regulatory uncertainty. Trump has reportedly pledged to deliver this framework within his first 100 days in office; however, there are many questions lingering about its feasibility and the ambitious timeline.
The 47th president had also promised to block the development of a Central Bank Digital Currency (CBDC) in the US. Although CBDCs are gaining global attention, Trump’s stance here is more in line with crypto enthusiasts who advocate decentralised systems over digital currencies issued by governments.
Trump’s key appointments
As part of his crypto agenda, Trump has nominated businessman Paul S Atkins to serve as the chair of the SEC. Atkins, a well-respected figure, is known for his pro-crypto stance. The crypto community is seeing his appointment as a win for the industry, especially after years of Gensler’s opaque stance. However, Gensler’s approach was often slammed by his critics, who termed it regulation by enforcement, and this was widely perceived as a major roadblock for the industry. Atkins, who was also appointed SEC chair between 2002 and 2008 under the George W Bush administration, has expertise in the evolving digital economy. Over the years, he has earned a reputation as a leading voice in the fintech sector and has been advocating for the adoption of blockchain technology. Atkins has been in favour of regulatory frameworks that support innovation all the while safeguarding investors.
David Sacks, another notable appointment, is expected to play a key role in shaping policy related to cryptocurrency and AI. Sacks, who has been named the White House AI and crypto czar, is a South African-American entrepreneur and investor. With his expertise, his inclusion in the administration signals that Trump is serious about innovation in this realm.
What are the challenges?
Trump’s pro-crypto rhetoric has revived the community with a sense of optimism, but challenges persist. For instance, his promise to deliver regulations within the first 100 days in office may likely face hurdles in Congress. This is because bipartisan agreement on crypto-related regulations has always been elusive. Experts also feel that cryptocurrency’s environmental impact and potential for misuse may push Democrats to oppose Trump’s policies, further complicating his pro-crypto agenda. Also, the industry has been undergoing multiple challenges. Several experts have pointed out the collapse of FTX in 2022, underscoring the risks related to poorly regulated exchanges. The fall of the Bahamas-based cryptocurrency is seen as a cautionary tale for investors. Trump will have to do a lot more than lip service, as transparency along with security in the market will be key to sustaining growth and public confidence.
At present, the crypto industry is at a crossroads. Trump’s promised policies could likely push the industry into the mainstream, offering the much-needed clarity and support sought by entrepreneurs for so long. The success of his efforts will largely depend on his administration’s ability to navigate political opposition. The crypto world is closely watching Trump as he enters his second term. It remains to be seen if it will be the golden age for crypto or if more complexities will unfold.
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