Cryptocurrency enthusiasts were hopeful that a Donald Trump presidency would usher in a bull market for digital assets, after promises on the campaign to make the U.S. the “crypto capital of the planet” and a “bitcoin superpower.”
So far, things are looking good for the crypto crowd.
The price of bitcoin — the world’s largest and most popular cryptocurrency — has jumped to about $104,000, a roughly 50% rise since Trump was elected for a second term. And in the short time since Trump reclaimed the Oval Office, his administration has gotten to work enacting a pro-crypto agenda.
“All of the things that were on the wish list last summer have pretty much happened — especially for bitcoin,” says Andy Baehr, managing director at CoinDesk Indices.
Here are three updates that have happened so far.
New faces, new regulations
Trump received millions in donations from the crypto industry in the hopes that he’d deliver on promises to roll back a perceived government crackdown on crypto led by former Securities and Exchange Commission Chair Gary Gensler.
Gensler stepped down earlier this month, giving way to an interim chair who Trump plans to replace with former SEC Commissioner Paul Atkins, currently CEO at Patomak Global Partners. Trump has also installed venture capitalist David Sacks as White House AI and crypto czar.
The SEC’s first major move under Trump: withdrawing an accounting rule known as SAB 121, which required banks and other financial institutions to treat cryptocurrencies as a liability on their balance sheet.
Crypto industry advocates say the move will pave the way for wider crypto adoption among people who prefer to interact with legacy financial institutions.
“Repealing it just gives a lot more comfort to financial institutions to be able to consider custodying crypto, which should pave the way for a lot more regulated institutions to adopt crypto as an asset class that they support on behalf of the clients,” says Kian Sarreshteh, co-founder and CEO of digital investing platform InvestiFi.
The first family of meme coins
On the Friday before his inauguration, Trump launched his own meme coin, a type of cryptocurrency based on a meme, character or social media trend. The token, which features an image of Trump, rose from about $6.50 to $73 over the course of two days before suffering a 50% drawdown. First Lady Melania Trump launched her own coin, which topped out at more than $13 before settling in around $2.30.
Crypto experts say there are a few ways to take in the news that the first family is putting out coins with value pegged only to what their fans are willing to pay for them.
One is that it’s another powerful sign that the current administration will continue to forward crypto-friendly policies, says Federico Brokate, vice president and head of U.S. business at crypto ETF firm 21Shares.
“It’s another vote of confidence in the ecosystem by this new administration,” he says. “This falls squarely in that category of continued promotion and acceptance and embracing [of digital assets] by this new administration that’s coming into power.”
Another is skepticism on behalf of retail traders. It’s important to remember that meme coins — even those branded by the President — are volatile even by crypto’s standards. Those who trade these tokens should know that they are entirely speculative, says Baehr.
“Meme coins are definitionally frivolous. It says so right on the label. It says, ‘this is a meme about a dog,'” he says, referring to coins such as the shiba inu-themed dogecoin. “The frivolity is written right on the outside. So you’re not being fooled.”
Looking for the next catalyst
Last week, Trump signed an executive order to promote advancement of crypto in the U.S. and to work toward eventually developing a national cryptocurrency stockpile.
“The digital asset industry plays a crucial role in innovation and economic development in the United States, as well as our Nation’s international leadership,” the order states.
The order also calls for the establishment of a working group to consider the possibility of a U.S. crypto cache “potentially derived from cryptocurrencies lawfully seized by the Federal Government through its law enforcement effort.”
For the most rabid crypto fans, the order felt like a small step rather than the giant leap they may have been hoping for. After all, Trump floated the idea on the campaign trail that his government would buy bitcoin for the purposes of establishing a strategic reserve — a move that experts say would be a huge boon to the coin’s value.
Though the executive order mentioned a stockpile, it laid out no plans for making bitcoin the national reserve cryptocurrency, nor mentioned it by name. That means bitcoin maximalists looking for the next big catalyst for growth will have to be patient, for now.
“It doesn’t sound like the kind of thing that could be signed, sealed and delivered in a week,” says Baehr. “I don’t think people have reason to be as concerned as the [crypto] community was. The community was just looking for a reason for [bitcoin’s] price to ramp up to $250,000.”
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