Key Takeaways
- Some crypto industry players see Donald Trump’s win as a positive development for the crypto industry.
- We expect to see more regulatory clarity for cryptocurrencies and stablecoins and some progress as a pro-crypto leadership takes office in the U.S.
- The United States could create a Bitcoin strategic reserve, which could positively affect Bitcoin prices.
The price of Bitcoin finally attained the six-figure price tag in December 2024, when it surpassed the coveted $100,000 price, bringing a lot of enthusiasm to the entire crypto market. After hitting the much-coveted milestone, there’s an ongoing debate on the future of the crypto industry under the Trump administration, which is seen to be the most-crypto-friendly administration in the U.S. yet. This article is a commentary on what we could expect beginning in 2025 and beyond after Donald Trump and his pro-crypto Congress take office.
The Making of a Pro-Crypto President
Once a serious crypto skeptic, Donald Trump made an about-turn in June 2024 when he pledged to make the United States the “crypto capital of the planet.” While delivering a keynote address during the July 2024 Bitcoin conference in Nashville, Trump called for the building of a United States Bitcoin Strategic Reserve. He also went on to promise to spearhead the formulation of a clear crypto regulatory framework written by a group of people who love the digital asset industry. Moreover, Trump included a pro-crypto paragraph on the Republican National Committee platform, where he announced he would be willing to receive crypto donations. The American President-elect and his family also own a crypto project, the World Liberty Foundation.
As Trump awaits his inauguration on January 20, 2025, the President-elect has been on a hiring spree, specifically nominating cryptocurrency enthusiasts to important regulatory offices. Trump recently named crypto advocate Paul Atkins as nominee for chairman of the U.S Securities and Exchange Commission (SEC). He also nominated former PayPal CEO David Sacks for a new role dubbed the AI and Crypto Czar, giving the clearest indications yet that he intends to transform American policy on digital assets to boost the emerging sector.
Crypto’s Journey from Villain to Hero
Many crypto industry players believe the Trump 2.0 administration could be a period when favorable regulations will come into play. Commenting on the development, Faryar Shirzad, the chief policy officer of cryptocurrency exchange Coinbase, stated:
“We’re very hopeful that a Trump administration and a much more pro-crypto Congress will make significant progress and build in the basic building blocks of what an effective regulatory framework should be around the crypto markets.”
It should be noted that Donald Trump’s views on the digital asset market have evolved since 2018, when he referred to Bitcoin as “highly volatile and based on thin air.” Later, in 2021, he described Bitcoin during an interview on Fox Business as a scam, adding that crypto was a “disaster waiting to happen,” besides complaining that BTC and other cryptos were undermining the supremacy of the U.S. dollar. However, all that is now is water under the bridge as the asset has since gained popularity globally, with many interested in the future of the crypto industry under Trump.
What to Expect in the Crypto Industry under Trump
Initially extolled as an alternative type of currency that offers privacy outside the traditional financial systems, crypto initially attracted many people, including criminal elements, who never wanted their funds tracked by the authorities. However, most people and institutions actively involved in the crypto market use it as a form of investment. As its adoption continues and questions linger on the future of the crypto industry under Trump, here are three things to keep a keen eye on:
More Regulations
Under the leadership of Gary Gensler, SEC chair since 2021, whom Trump promised to fire on “day one” and whose leadership was to run until 2026, the SEC considered cryptocurrencies securities, meaning they were under the SEC’s jurisdiction. The SEC, under Gensler, sued numerous crypto exchanges for failure to register as security exchanges, brokers, or clearing houses.
The crypto industry sighed with relief when Gensler announced his resignation, and Trump nominated Atkins as the incoming SEC chair. Atkins is a former board member at the SEC and has been a renowned crypto lobbyist. As Atkins prepares to take office in 2025, established crypto industry players are asking for a clear regulatory framework that will create predictability.
Building a Crypto Strategic Reserve Fund
Several crypto enthusiasts have supported President-elect Donald Trump’s proposal to create a U.S. Bitcoin strategic reserve fund. A Strategic Bitcoin reserve fund would be similar to a rainy day basked to be used in case of turmoil or emergencies. It could also act like the U.S. strategic oil reserve, which helps to buy crude oil when prices are low for strong future release when prices have risen exceedingly. During the July 2024 Nashville Bitcoin Conference, Trump proposed to stop auctioning crypto seized from criminal elements by the U.S. government but instead added it to a strategic reserve.
According to Brian Blank, an associate professor of finance at Mississippi State University, a crypto strategic reserve could soften value fluctuations. He stated that “An organization as large as the U.S. federal government holding a nontrivial amount of an asset is likely to stabilize it […] if the U.S. has some of it …that would legitimize it in some ways. Being part of the mainstream may increase its value.”
Making the U.S the ‘Crypto Capital of the World’
U.S. President-elect Donald Trump proposed during the July Nashville Bitcoin Conference that he would make America “the crypto capital of the world.” Calling his father the “most pro-crypto president in the history of America,” Trump’s son Eric Trump told the Abu Dhabi Bitcoin Conference during an interview with CNBC: “We will have a clear road map, and hopefully the rest of the world follows that. Hopefully, we can lead by example because that’s what we should do as Americans.” Crypto industry experts expect this to happen if the Trump 2.0 administration implements favorable regulations and if the President’s enthusiasm for crypto encourages more people to join in and make profits. So far, Trump’s political commitment has been gratifying, seeing the many corporations joining the crypto ranks. With more people in the United States investing in crypto, there will be more potential customers, meaning that demand for crypto will grow, thereby making it more profitable.
Conclusion
While the exact mechanics of how things could happen may need to be clarified, it is almost determined that the future of the crypto industry under Trump is going to be anything but interesting. The direct involvement of the U.S. government in the crypto industry will boost Bitcoin’s value and legitimize it as a mainstream financial tool. If everything happens as planned, it will most likely take Bitcoin to the moon.
