Donald Trump, a staunch crypto advocate, took office as the US President on January 20th. This move reaffirms the ‘Make America Great Again’ pledge to other nations and signals a bullish outlook for the cryptocurrencies environment.
Trump is displaying his friendliness towards crypto
Regulatory Changes
Trump has pledged to be the “most crypto-friendly president” and has made several promises that could influence regulation:
- Fire Gary Gensler: Removing the current SEC chair, who is seen by many in the crypto space as stifling innovation, could lead to a more favorable regulatory environment. Trump’s choice for SEC leadership, Paul Atkins, is known for his pro-crypto stance by actively holding the role of Chief Executive of the consulting firm Patomak Global Partners, which often advises cutting-edge cryptocurrency companies and traditional financial firms on how to leverage digital assets for growth.
- National Bitcoin Reserve: The idea of a government Bitcoin reserve has been floated, which could theoretically increase demand for Bitcoin but has been met with skepticism regarding its feasibility. While the inauguration of President Trump may lead to more “comfortable” crypto regulations, Cointelegraph reports that some aspects will still require time to adjust including stablecoins.
- Boosting US Bitcoin Mining: During his election campaign in July 2024, at the Bitcoin conference in Nashville, Donald Trump promised to encourage domestic Bitcoin mining operations, which he believes could support the industry’s growth in the US.
- Regulatory Clarity: The expectation is that the new administration might provide clearer and more favorable regulations for cryptocurrencies, possibly leading to increased institutional investment and mainstream adoption. ETFs are currently the basis for legalizing crypto, and at the same time, they are the bridge leading the flow of money from the TradFi (Traditional) market to the crypto market. However, the flow of money held by people is much larger, it requires a legal basis to open the investment gate on multiple platforms for US citizens, which is being applied under the name MiCA in Europe.
Read more: Best Crypto Exchanges in the USA for January 2025
Trump’s Positive Impact on Crypto
First, it is essential to highlight that Trump’s entire presidential campaign involved a prolonged effort to persuade the cryptocurrency community of his crypto-friendly policies. As a result, market prices often moved in response to his actions and statements.
When Trump won the presidential election on November 5, 2024, the crypto market entered a phase of overwhelming positivity. Bitcoin, which had been experiencing six consecutive days of decline, rebounded swiftly and continued its upward momentum following Trump’s victory. This event is considered a remarkable catalyst that set the stage for BTC to break new all-time highs (ATH) in the subsequent days.
Altcoins frequently follow Bitcoin’s price trends. Consequently, the total crypto market capitalization, which stood at approximately $2.29 trillion at the beginning of November, surged to a new milestone of $3.73 trillion.
Donald Trump has close ties with Elon Musk, the billionaire entrepreneur behind Tesla and SpaceX, known for significantly impacting cryptocurrency prices with his tweets. Dogecoin ($DOGE) serves as a prime example of this influence.
Recently, Trump signed an executive order approving the Department of Government Efficiency (D.O.G.E.), headed by Elon Musk, a name that immediately evokes associations with Dogecoin.
A few days before his inauguration, Trump announced the launch of a new memecoin named $TRUMP. Within just 36 hours of its release, the token rapidly surpassed several major tech projects, reaching a market capitalization of $15 billion and becoming the second-largest memecoin, only behind Dogecoin. Since $TRUMP is a Solana-based token, the price of $SOL surged to a record high of $294.33 this past Sunday. This sharp increase may reflect growing investor confidence in the Solana ecosystem, potentially driven by the success of $TRUMP and several retailers also add in $MELANIA.
Read more: How to Buy Solana (SOL) – 2025 Guide
World Liberty Financial, an independent cryptocurrency initiative associated with Trump, revealed on Monday that it successfully concluded its initial token sale, securing $300 million in funding, and would look to issue additional tokens of 5% due to high demand. Currently, the fund behind Mr. Trump is gradually stepping up the purchase of major coins including $ENA, $ETH, $AAVE or $LINK.
Read more: Best Crypto Exchanges in the USA for January 2025
The intention behind the launch of the $TRUMP
The $TRUMP memecoin is designed to resonate with supporters of Donald Trump, leveraging his political persona and the “Make America Great Again” (MAGA) slogan. This makes it a cultural phenomenon, aligning with meme culture while also serving as a political statement or symbol of support for Trump’s ideologies and policies. This is evident from posts on X where users describe it as a tokenized manifestation of political movements or sentiments associated with Trump.
Given the rapid rise in value and substantial market capitalization shortly after its launch, the $TRUMP coin seems to be aimed at capitalizing on Trump’s brand and influence for financial gain. Reports suggest that a significant portion of the coin’s supply is controlled by entities associated with Trump, indicating a direct financial interest in its success. The coin’s market dynamics, including its initial surge and subsequent fluctuations, underline its use as a speculative asset rather than one with intrinsic utility.
This memecoin also serves to engage and mobilize Trump’s community, not just financially but also in terms of participation in the cryptocurrency ecosystem. The launch was announced by Trump himself on social media platforms, suggesting an intent to engage his followers directly in this venture. It’s noted that such coins often attract investment due to the hype they generate, even if they lack fundamental value. This aspect of speculation and community interaction is crucial for meme coins, which thrive on social media attention and the viral spread of enthusiasm.
However, timing and manner of $TRUMP launch have raised ethical concerns, especially given Trump’s impending return to office with a pro-crypto agenda. Critics have pointed out potential conflicts of interest, where Trump could influence regulations or policy in a way that benefits his financial interests in the coin. This has sparked discussions on the ethics of a political figure launching such ventures, particularly with the backdrop of regulatory scrutiny over cryptocurrencies, per CNN.
Bull Season 2025?
Typically, after Bitcoin completes its halving cycle, the following year witnesses remarkable growth in both BTC and the broader crypto market. This trend has been consistently observed in the halving events of 2012, 2016, and 2020, with the next anticipated in 2024. Indeed, Bitcoin has already reached an all-time high of $109,000 this year, with strong potential for further increases.
Public confidence in cryptocurrency is driven by more than its cyclical nature. The re-election of Trump has opened the door to legitimizing Bitcoin and other cryptocurrencies, making it easier for vast liquidity from investors to flow into the crypto market.
A notable example is Coinbase, a pioneering U.S.-based cryptocurrency exchange led by Brian Armstrong, which recently announced a delay in processing withdrawals on the Solana network and with the $SOL token due to overwhelming FOMO (fear of missing out) associated with the $TRUMP memecoin.
The introduction of $TRUMP, a token built on the Solana blockchain, triggered a surge in demand for $SOL, as users required the token to buy or trade $TRUMP. This spike in demand temporarily constrained the supply of $SOL on Coinbase, as users moved the token off the platform to participate in trading the new memecoin. Speculative investors likely transferred $SOL from Coinbase to capitalize on the growing hype, either purchasing $TRUMP or holding $SOL in anticipation of a price surge driven by the buzz surrounding the token.
The congestion on Coinbase’s $SOL supply caused by a 36-day-old memecoin like $TRUMP raises significant questions. If substantial liquidity from the U.S. market continues to flood into other projects, how many tokens will experience similar or even greater price spikes? Notably, according to a recent survey conducted by NFTevening, many Americans admitted that $TRUMP was their first cryptocurrency investment.
Moreover, as the United States increasingly opens its doors to cryptocurrencies amid unprecedented FOMO, it is worth asking whether other major nations, including China and Russia, will remain passive observers. The ongoing crypto season promises even more excitement and opportunities for investors ahead.
USA coin projects will gain most significant benefits
Trump’s presidential election in November 2024 sparked positive speculation within the crypto market. This speculation contributed to a significant market rise, accompanied by strong performance from USA-related tokens:
- $XRP (Ripple): +564% (New all-time high)
- $XLM (Stellar): + 579% (New all-time high)
- $BTC (Bitcoin): +61% (New all-time high)
- $SUI (Sui): +192% (New-all-time high)
- $SOL (Solana): +91% (New all-time high)
Furthermore, there are discussions and proposals suggesting tax benefits for the US-based cryptocurrencies. For example, there’s speculation about making capital gains from certain U.S.-based cryptos tax-free, which would significantly benefit token holders by reducing their tax liabilities. To attract liquidity among citizens, the US environment allows for the creation of new financial instruments through tokenization, which can offer unique investment opportunities not available in traditional markets along with ETFs and ETPs. This innovation can lead to tokens with novel benefits or use cases.
Final Thought
Trump’s presidency could potentially catalyze a significant expansion in the crypto ecosystem within the U.S., positioning the country as a global leader in blockchain technology. However, the long-term implications depend heavily on how these policies are implemented, their global reception, and the balance between fostering innovation and ensuring market integrity.
The crypto community’s sentiment on social media, seems optimistic about the immediate effects but cautious about the sustainability and long-term consequences of these policies.
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