A Closer Look at Trump’s Pro-Crypto Stance and What It Means for the Industry

In the build-up to and during the recently concluded U.S. general elections, former president Donald Trump consistently portrayed and branded himself as the pro-crypto candidate. He allied with Billionaire Elon Musk and promised the establishment of a new department (Department of Government Efficiency) based on the popular memecoin DOGE.

These strategies would go so far, eventually contributing to Trump’s victory over rival Kamala Harris and securing his second term. Immediately following his win, many cryptos started rallying, with Bitcoin (BTC) crossing $82,000 for the first time and reaching its current price of $97,827.07.

However, an air of uncertainty continues to hang over the crypto market, with numerous investors unsure of what this all means and in what direction it could all go in the near future.

What Is “Decentralized” in Decentralized Finance?

One of the most popular buzzwords in the crypto space is DeFi. This term indicates a unique characteristic of cryptocurrencies in that they are not regulated or controlled by a central authority, such as the U.S. Federal Reserve and the Securities and Exchange Commission. So, contrary to widespread misconception, Trump is not coming to centralize and will not even be able to centralize the cryptocurrency market. 

DeFi uses an immutable ledger called blockchain to store transactions. Since this ledger is immutable, most blockchain transactions involve smart contracts, which are digital contracts set to execute automatically once preset conditions are met.

Via these two mechanisms, a peer-to-peer system is set up that makes everyone on a transaction a witness, typically called a node. This way, cryptocurrency transactions are secured, and trust is built in investors and even enthusiasts. 

Now, the pressing question, “What is all the hype about Trump’s win, and why did such drastic changes occur in the prices of major tokens?”

How Crypto Prices Are Determined

Although cryptocurrencies are not controlled by a central authority, they’re still subject to economic principles like demand and supply. When there’s high demand for a certain token, its price increases, and vice versa.

However, some individuals or entities can influence Bitcoin’s and other cryptocurrencies’ prices by their substantial presence or actions in the market. A perfect example is whales, who can buy extremely large quantities of a token at one time and also sell them off, offsetting demand and supply. 

Donald Trump’s statements and victory don’t constitute that of a whale but of a high-profile figure who can alter people’s sentiments based on their perceived expertise, understanding of the market, or control over it.

These promises also come at a time when the crypto industry faces a plethora of security and integrity issues, causing the SEC to embark on a campaign of partial regulation. These have raised eyebrows and speculations about the crypto market, especially as the president-elect is set to appoint the next SEC chairman. 

A Surprising Shift in U.S. Crypto Politics

While Donald Trump now brands himself as a “crypto-progressive” politician, he used to be a vocal critic of these new payment formats. In July 2019. Trump tweeted, “I am not a fan of Bitcoin and other Cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air.” Then, the 45th president, the tweet sparked various debates about the stability and legitimacy of cryptocurrencies and whether they could be a globally accepted valid form of exchange.

While it’s not entirely clear what changed Trump’s views about crypto, shifts in public sentiments and a political strategy are two highly likely commonly cited reasons. Trump’s rekindled relationship with Elon Musk, who has been extremely vocal about the market, may have also contributed.

Trump has promised to make the U.S. the crypto capital of the entire planet while simultaneously agreeing to make Musk the head of the new DOGE commission. According to both individuals, DOGE will be an advisory body aiming to streamline the U.S. federal government and reduce inefficiency, such as cutting costs and reviewing revenues. It would not function as a separate federal executive department, as this would require Congress to approve its creation.

Implications for the U.S. Crypto Industry

According to all indicators, the agency that will be most affected by Trump’s pro-crypto promises is the Securities and Exchange Commission. Currently led by Gary Gensler, the SEC aims to reduce market manipulation, protect investors and their investments, and facilitate capital formation.

The SEC has increased its oversight of cryptocurrency platforms, emphasizing compliance with existing securities laws. It has pressured Congress to clarify which agency—either the SEC or the Commodity Futures Trading Commission (CFTC)—should oversee different aspects of cryptocurrency. This has led to lawsuits against major crypto firms like Coinbase and Kraken. Generally, this signifies stricter policies against the crypto market under the current administration.

As Trump is sworn in on January 20th, 2025, there are expected to be relaxed regulations against cryptocurrencies, blockchain, and Web3. He also promised to launch a strategic national crypto stockpile, essentially a government-controlled reserve of cryptocurrencies. These moves could safeguard the country’s financial stability, bolster economic security, or allow the government to leverage blockchain-based assets for strategic purposes.

Potential Benefits for the Blockchain Ecosystem

Currently, cryptocurrencies and their underlying technology, blockchain, are largely misunderstood or viewed as extremely complicated and unstable. To an extent, this has hindered mass adoption globally, with governments, organizations, and even individuals choosing to rather stick to traditional investment and payment methods.

However, a widescale adoption of cryptocurrencies, especially by a world power like the United States, could alter that narrative. Other governments, especially those whose economies tie closely with that of the U.S., could also begin moves to adopt and create regulatory frameworks around this technology.

As competition in the cryptocurrency space intensifies, the U.S. could regain its position as a global leader if Trump proceeds with his promises. The rate at which Web3 also evolves could also see industries like finance, supply chain, and even property and real estate record massive gains. This could trigger a chain reaction for other sectors like medicine and manufacturing, especially as blockchain integrates more seamlessly with Artificial Intelligence and Machine Learning.

The Future of Cryptocurrency Under Trump’s Vision

Trump’s pro-crypto stance carries the potential to revolutionize the blockchain space. His promises, such as a national crypto stockpile and regulatory relaxation, could spur innovation, enhance adoption, and establish the U.S. as a leader in the global crypto economy. 

However, concerns linger about the risks of favoritism, regulatory ambiguity, and market volatility. While some see his policies as a catalyst for mainstream acceptance, others fear they might deepen divisions in the industry. 

Will Trump’s vision accelerate crypto integration or amplify challenges within the sector?

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