Trump’s Inauguration Sparks Crypto Boom and Market Turbulence, Dollar Weakens Amid Policy Uncertainty

The inauguration of President Donald Trump marked not only his return to the White House but also the surge of the Trump family’s cryptocurrency tokens

Freshly minted cryptocurrency tokens from the Trump family soared in value on Monday, riding a wave of broader enthusiasm in crypto markets and strong investor interest in the digital assets.

The tokens, branded as $Trump and $Melania, debuted over the weekend and quickly surpassed $10 billion in paper value. This surge coincided with Bitcoin reaching an all-time high of over $109,000 on Monday. The trading platform Robinhood, which also contributed to Mr. Trump’s inauguration fund, further boosted the tokens’ visibility by adding $Trump to its platform on Monday.

Memecoins like $Trump are typically linked to online culture or celebrity personas, and their availability on major trading platforms is rare. Trump affiliates control the majority of the tokens, which will be released gradually over the coming years.

Before the token launch, Forbes estimated Mr. Trump’s net worth at $6.7 billion, largely stemming from his ownership of Trump Media and Technology Group, the parent company of Truth Social. Now, as Mr. Trump assumes the presidency, the rapid rise in token value has raised potential concerns about new conflicts of interest.

Ethics watchdogs highlight the possibility of businesses and traders using these tokens to gain influence with the administration. Mr. Trump, a former crypto skeptic, has recently embraced the digital asset industry. He pledged to establish the United States as a global hub for cryptocurrency, a vision realized partly through World Liberty Financial, a crypto-focused venture he co-founded with his sons. Additionally, several advocates for lighter crypto regulation were appointed to key roles in his administration.

Crypto markets have rallied significantly since Mr. Trump’s electoral victory, with Bitcoin leading the charge. The interplay between the administration’s crypto-friendly stance and the broader market enthusiasm continues to draw global attention.

Trump’s Inauguration Sparks Crypto Boom and Market Turbulence, Dollar Weakens Amid Policy Uncertainty

President Donald Trump's inauguration not only marked his return to the White House but also saw the surge of the Trump family's cryptocurrency tokens and a sharp decline in the U.S. dollar, as investors reacted to the administration's trade policy statements and varying signals on tariffs.

Trump's Cryptocurrency Windfall

Launched over the weekend, the $Trump and $Melania tokens reached a combined paper value of over $10 billion as trading platforms like Robinhood began offering the tokens. This surge coincided with Bitcoin hitting a record $109,000, fueling broader enthusiasm in the crypto market. However, ethics experts raised concerns about potential conflicts of interest as Mr. Trump begins his term with substantial holdings in digital assets.

Mr. Trump's pivot to cryptocurrency reflects his evolving stance. Once a skeptic, he now champions the sector, pledging to make the U.S. a global leader in crypto innovation. His administration has also appointed crypto-friendly advisors and floated ideas for regulatory reform, which could further galvanize the sector.

Dollar Takes a Hit on Trade Policy Ambiguity

Meanwhile, the dollar index dropped nearly 1%, with the euro, sterling, and Mexican peso gaining ground. Investors reacted to Mr. Trump's inaugural promise to “tariff and tax foreign countries to enrich our citizens” but noted the lack of immediate action. Analysts like James Nelligan from JPMorgan suggested that the absence of swift tariff implementation was a “short-term disappointment” for the dollar.

Despite the decline, some experts believe that more aggressive trade measures could be introduced after federal reviews of key relationships with countries like China, Canada, and Mexico. Markets had already been anticipating inflationary pressures from potential tariffs, which could influence Federal Reserve interest rate decisions in the months ahead.

Broader Market Impacts

Oil prices declined after Mr. Trump declared an “energy emergency,” proposing to open federal land for oil exploration. Brent crude fell 0.9% to $80.03 per barrel, while WTI dropped 1.7% to $76.58 per barrel. In contrast, European equity markets closed slightly higher, with London's FTSE 100 reaching a record high, buoyed by optimism about global economic prospects.

Currency market volatility is expected to persist as the administration's trade policies and crypto initiatives unfold. Chris Turner of ING remarked, “The one thing the [currency] market had expected was more volatility. And we’re certainly seeing that.”

As Mr. Trump begins his presidency, the interplay of crypto market dynamics, trade policy, and broader economic strategies will continue to shape global markets, presenting both opportunities and challenges for investors.