After Donald Trump’s election, the cryptocurrency market experienced a significant surge, with Bitcoin surpassing $100,000 due to investors banking on Trump’s pro-crypto promises. But what promises generated such optimistic speculation in the market? The key proposals include restructuring the SEC, establishing a national Bitcoin reserve, and halting the development of a U.S. central bank digital currency (CBDC). In addition to these major initiatives, Trump has also floated several smaller ideas, which this article will explore.
Restructuring the SEC
Trump plans to fire the current Chairman of the SEC, Gary Gensler, who is infamous in the crypto community due to his unfavorable regulatory decisions for crypto. This hints that Trump would likely replace Gary with a chairman who is much more favorable to crypto, who would lessen strict regulation, and who would create a friendlier environment for crypto innovation.
Creating a Bitcoin reserve
Trump has claimed and supported the idea of the US creating and holding a strategic Bitcoin reserve, which would be comparable to the gold reserve currently. The idea stems from Senator Cynthia Lummis which entails buying one million bitcoins over a five-year period and holding these bitcoins for at least 20 years. The US already has 200 thousand bitcoins, which were seized from illegal activities. To meet the proposed goal, the government would need to invest an estimated $78.2 billion, based on Bitcoin’s value as of January 5, 2025.
Stop the creation of the CBDC
The U.S has been trying to establish a digital currency for some time now, and the reason is to better monitor financial activity increasing the chances of spotting money laundering, terrorism funding, and tax evasion, also with better surveillance of the economy the government could make more informed decisions when regulating. However, the crypto community and Trump are against the idea because it would endanger the crypto market, especially stablecoins, and it is better for freedom that digital currencies remain decentralized.
Some other promises
- Establish a Bitcoin and crypto Presidential advisory council. The council would assist President Trump when making regulatory decisions for crypto, and the council’s members would be people who “love your industry”. As the council would be filled with people who support crypto, this means that they would likely advise policies that are good for crypto.
- America becoming the leader in “Bitcoin mining”. Trump has expressed that he wants that the rest of the bitcoin mined would be mined in America.
- Lower interest rates. Lowering interest rates would increase borrowing and make investing in cryptocurrency more attractive, driving prices.
Trump’s election win triggered a boom in the crypto market, fueled by the anticipation of his pro-crypto policies. However, whether cryptocurrency continues to grow depends on Trump’s ability to deliver on these promises. Hence, some argue that since Trump most likely won’t fulfill all his promises, crypto will fall due to the market expecting more than what will happen in reality. Whether Trump fulfills his promises and crypto booms or busts is still highly debatable.
It is also necessary to mention that Trump has a personal gain in crypto as the Trump family owns “World Liberty Financial” which is a cryptocurrency company that plans to sell tokens.
– Roberts Marenis