Trump's Return to Office Could Reshape the Cryptocurrency Market

The digital world has grown more complex lately. Americans lost $2.2 billion to crypto-related fraud in 2024 alone. Despite this, Trump’s position on digital assets has changed dramatically over time.

Donald Trump made headlines in the crypto world just three days before taking office. He launched his own digital asset, $TRUMP, which reached a staggering $14 billion valuation before inauguration day. The move sparked major concerns since Trump and his associates control 80% of the token’s supply.

Trump's Shifting Crypto Stance

Trump's position on digital assets has changed dramatically over time. He shifted from being critical to promising to make the U.S. “the crypto capital of the planet.”

Trump once viewed cryptocurrency with deep skepticism. He dismissed Bitcoin as “a scam” and criticized it for competing against the dollar during a Fox Business interview in 2021. His position started to change after crypto industry leaders contributed $25 million to his campaign.

The Nashville Bitcoin conference marked a turning point where Trump embraced cryptocurrency and vowed to make the United States “the crypto capital of the planet”. His administration took action by signing an executive order that established regulatory clarity for digital assets.

Trump’s policy promises now include:

The market reacted strongly to Trump’s new stance. Bitcoin crossed $100,000 for the second time after his election victory. His pro-crypto cabinet appointments, including Paul Atkins as SEC chair, created more market optimism. Notwithstanding that, some analysts remain cautious and point to these investments’ highly speculative nature.

Regulatory Landscape Under Trump

The SEC’s regulatory approach under Trump shows a clear change from the “regulation by enforcement” style used by the previous administration. Paul Atkins, the new SEC chair, wants to make the SEC’s role in crypto markets clearer instead of just enforcing rules.

Trump’s regulatory vision relies heavily on the Presidential Working Group on Digital Asset Markets. This group brings together the heads of major financial agencies to create a detailed federal framework for digital assets.

Several new bills could revolutionize the regulatory world. The Financial Innovation and Technology Act and the Digital Asset Market Structure Act tackle the ongoing debate about whether crypto belongs to the SEC or CFTC.

This clarity might reduce the market uncertainty that often leads to price swings. The relationship between state and federal regulation creates unique challenges. Both the Clarity for Payment Stablecoins Act and the Lummis-Gillibrand Payment Stablecoins Act try to create consistent rules across different jurisdictions. State-chartered banks might soon issue stablecoins without getting Federal Reserve approval.

Federal Reserve and Monetary Policy

The Federal Reserve’s role in cryptocurrency markets has become central in the Trump administration through a groundbreaking executive order. This is similar to how the best online casinos are regulated directly by states.

This order created a working group of financial leaders. The Treasury secretary and chairs of major regulatory bodies make up this group. Their aim is to develop detailed digital asset frameworks.

Potential Bitcoin Reserve Implementation

The administration wants to create a national digital asset stockpile, which shows a substantial change in federal policy. The working group will review and create this reserve through two possible channels:

The proposed reserve could work just like the Strategic Petroleum Reserve. The Federal Reserve would manage policy while the CFTC would oversee the assets. Moreover, the U.S. might acquire 1 million BTC by 2029. If Bitcoin keeps growing at 25% yearly, this reserve could make up 35.5% of the national debt by 2049.

Impact on Dollar Hegemony

The administration sees stablecoins as a way to keep dollar supremacy. The White House AI and crypto czar believes stablecoins can help spread dollar dominance worldwide. The executive order promotes USD-backed stablecoins globally but bans U.S. central bank digital currencies.

Inflation and Crypto Adoption

The Federal Reserve’s monetary policy choices strongly affect crypto markets. History shows that interest rate cuts lead to rising crypto prices because borrowing costs less.

Cryptocurrency ownership among U.S. internet users is expected to grow from 11.2% in 2024 to 14.5% by 2026. The number of crypto owners using their holdings to make payments will rise from 13.4% to 19.4% during this time.

Global Crypto Market Implications

Trump’s executive order on digital assets creates waves through international regulatory frameworks across global markets. His administration takes a different path from previous policies. It promotes U.S. leadership in blockchain while canceling earlier international cooperation frameworks.

International Regulatory Response

Major financial hubs now follow unique approaches that could influence U.S. policy. Below is a summary of what these frameworks include:

Cross-border Trading Impact

Trump’s policies strengthen dollar sovereignty through USD-backed stablecoins. His administration protects American interests first and foremost. The executive order openly supports legal dollar-backed stablecoins worldwide.

This strategy could change international trading patterns as the U.S. becomes a global crypto hub.

Geopolitical Considerations

Economic uncertainty looms as trade policies might change. Trump’s promise to add tariffs up to 20%