Donald Trump’s influence on the crypto market can be understood through several aspects of his policies and political stances, although he himself has not been directly involved in the development or regulation of the crypto industry. Nevertheless, the political decisions, economic policies, and rhetoric made by Trump during his presidency could have a significant impact on the perception and price of crypto.
Here are some ways in which Trump and his administration could impact the crypto market:
Economic Policies That Promote Uncertainty
During Trump’s term, unconventional economic and trade policies (e.g., the trade war with China and aggressive tariff policies) created high economic uncertainty. Such uncertainty can drive investors to seek alternative assets such as Bitcoin and other cryptos as a “safe haven”. For example, escalating trade tensions between the US and China in 2018-2019 accelerated interest in crypto as a hedge against economic turmoil.
Trump’s fiscal policies, which include massive tax cuts and increased government spending, have the potential to increase budget deficits and inflation. In such a scenario, cryptos like Bitcoin are often seen as a means to protect wealth from the debasement of fiat currencies caused by inflation.
Trump’s Views on Crypto
On several occasions, Donald Trump has expressed negative views on Bitcoin. In 2019, he called Bitcoin and other cryptocurrencies “unstable” and “having no intrinsic value.” Trump prefers the US dollar as a global currency and opposes the idea that crypto could diminish the dollar’s influence.
In 2024, Donald Trump has significantly changed his stance on cryptocurrency compared to his skepticism during his presidency. He is now seen as more supportive of the crypto industry, even promoting innovative and pro-crypto ideas.
Trump has proposed creating a “strategic Bitcoin reserve” for the US. The plan, announced at a Bitcoin conference in 2024, aims to accumulate up to 1 million Bitcoins over five years as part of an effort to stabilize the national debt and propel the US into a hub for crypto innovation.
Trump has vowed to ease regulatory pressure on the crypto industry, which has been the target of frequent crackdowns by the Securities and Exchange Commission (SEC). He also said he plans to replace current SEC chairman Gary Gensler in a bid to create a more friendly environment for digital assets.
The move received a positive response from the crypto community, including Bitcoin’s price rising to an all-time high of around $75,000. Trump also supported the development of the Bitcoin mining sector in the United States, which attracted investors and boosted the stock prices of related companies.
Trump has described himself as “fine with crypto” and said the threat to the US dollar comes more from current government policies than from crypto itself. This is a major change from his previous rhetoric, which criticized Bitcoin as a “fraud.”
During his presidential campaign, Trump accepted donations in Bitcoin, Ether, and other stablecoins, indicating a shift in his stance on adopting digital assets as part of the modern economy.
