The White House will host its first cryptocurrency summit on March 7. What role will Trump play in it?

On the evening of March 2 local time, Trump announced that he would establish a national-level cryptocurrency strategic reserve, and the first batch to be included in Bitcoin, Ethereum, etc. This news has led to the price of cryptocurrency assets rising collectively, with market value increasing by $300 billion on March 3. But on March 4, the price of Bitcoin fell 9%, giving up most of the gains.

This Friday (March 7), the White House will hold its first cryptocurrency summit, and Trump will also make a speech. The market is closely watching the impact of this summit. The White House statement showed that attendees included founders, CEOs, investors and members of the President's Digital Assets Working Group.

The summit was led by "cryptocurrency tsar" Sax and managed by Hines. The White House said it is committed to providing a clear regulatory framework to promote innovation and protect economic freedom. After Trump took office, the SEC withdrew its investigation into several cryptocurrency companies and quit its lawsuit against Coinbase.

In 2021, Trump also called Bitcoin a "scam". But during the 2024 election, he received strong support from the cryptocurrency industry and his attitude changed 180 degrees. After winning the election, he acted quickly to support the development of the industry.

On January 23, Trump signed an executive order to establish a presidential working group for the Digital Asset Market to evaluate the feasibility of establishing a national digital asset reserve and formulate a regulatory framework. He has many purposes to promote the strategic reserve plan for cryptocurrency.

On the one hand, this is a reward for the cryptocurrency industry that supports him in the 2024 election, which helps consolidate the support of this group for him and his political party. At the same time, it is also a reverse operation of the policy of cracking down on the cryptocurrency industry during the Biden administration, thereby dividing the Democratic voter base and striving for more political capital.

On the other hand, incorporating Bitcoin, Ethereum, etc. into its strategic reserves is an attempt by the United States to seize the initiative in the emerging digital finance field. If a strategic reserve of cryptocurrency is established, it can send positive signals to the market, attract large trading platforms such as Coinbase to increase their business layout in the United States, and attract global cryptocurrency investors to funds.

In addition, under the digital transformation of the global economy, the importance of digital currencies is becoming increasingly prominent. Trump's promotion of cryptocurrency strategic reserve plans may be to cope with future currency diversification trends and allow the United States to take the initiative in future digital currency competition. Moreover, the Trump family is closely linked to the cryptocurrency business, and after the issuance of Trump coins, transaction fees flow to their families and partners. If the cryptocurrency strategic reserve plan promotes the market prosperity, its family cryptocurrency business will also benefit.

However, Trump's crypto strategy faces multiple constraints. Cryptocurrency regulation involves multiple departments, such as the Securities and Exchange Commission, Commodity Futures Trading Commission, etc. There are problems with the division and coordination of responsibilities of each department. Previous SEC's investigation and litigation of cryptocurrency companies reflects the inconsistent regulatory attitudes and regulatory standards towards cryptocurrencies. Without clear and unified regulatory rules, cryptocurrency companies will face legal risks in conducting business.

The cryptocurrency market is extremely volatile, with Bitcoin falling below $80,000 in one week, and then breaking through $95,000 due to Trump news. Its fluctuations are caused by poor market liquidity, many speculations, and incomplete mechanisms. Unstable markets and security risks will reduce investor confidence and are not conducive to the United States attracting global cryptocurrency investors and businesses. The plunge in the "Trump currency" and the speculative attributes of WLF tokens have also weakened institutional investors' confidence in policy stability.

In essence, under the US dollar system, cryptocurrency is still just a special commodity, and there is no essential difference between monetary attributes from ordinary commodities. From an operational perspective, there are also many technical difficulties in incorporating cryptocurrencies into national strategic reserves. Given that crypto assets may pose spillover risks to the stability of the financial system, the overall global regulatory efforts are clearly showing a trend of strengthening. At present, 51 countries and regions around the world have issued prohibitions on crypto assets, and some economies have adjusted their original laws or relegated regulations. Despite this, Trump’s role in promoting the White House in this cryptocurrency summit cannot be ignored, and his subsequent policy direction will still have a profound impact on the cryptocurrency industry.