With the aid of Trump's personal brand effect, the political endorsement of the U.S. government, and the clustering of multiple market forces, the global cryptocurrency industry is expected to usher in a rapid period of prosperity.
Bitcoin is the standout digital asset in this year's 'Trump Trade,' while cryptocurrency is the asset category with the most significant price increase in 2024. After hitting the milestone of $100,000, Bitcoin is now aiming for $110,000. With Trump’s personal brand effect, the political endorsement of the U.S. government, and the clustering of multiple market forces, the global cryptocurrency industry is expected to usher in a rapidly prosperous and euphoric period.
From hatred to love: for the sake of winning elections
During his first term, Trump scoffed at Bitcoin. In his view, the value of cryptocurrencies is built on thin air and is extremely unstable, thus they are not currencies at all. Trump also believed that unregulated crypto assets would promote illegal activities and crimes such as drug trafficking.
It is precisely for this reason that during Trump's first term, the Financial Crimes Enforcement Network under the U.S. Treasury strengthened its supervision of crypto asset transactions, the U.S. Securities and Exchange Commission (SEC) intensified its crackdown on unregistered crypto asset securities issuance, and the Department of Homeland Security and the FBI increased monitoring of crypto assets.
After leaving office as President of the United States, Trump did not stop his disparagement of Bitcoin and crypto assets. During his presidential campaign against Biden, he publicly advocated for a tougher regulatory stance on crypto assets. During this time, when Facebook planned to launch the digital currency Libra, Trump openly criticized it on Twitter and stated in an interview with Fox Business that 'Bitcoin is a fraud against the dollar.'
However, just before and after this year’s election, Trump made a 180-degree turn on cryptocurrencies, not only showing affection for Bitcoin but also continuously releasing positive policy support for crypto assets. Behind this turnaround lies a dual-driven logic of subjective recognition and objective demand.
Trump's wife Melania was his guide into the realm of crypto assets. In 2021, Melania launched her own NFT (non-fungible token) project, one of which, titled 'Head of State,' is a watercolor painting of her meeting with French President Macron wearing a white hat. This artwork drew immense attention from the crypto circle upon release. The following December, Trump launched his first limited edition digital trading card NFT on the Polygon platform, which became an instant hit, with 45,000 NFTs priced at $99 each selling out rapidly. Over the next year and a half, Trump released three more sets of NFTs, all of which were sold out.
These four sets of NFT cards are themed around Trump’s character Cosplay, showcasing cartoon images of either superheroes and Western sheriffs, or astronauts and race car drivers, or Trump in a suit engaging in a heated debate with Biden, or with a hole shot through the sleeve of his speaking outfit. The Trump on the cards varies from cute to silly; from pitiful to arrogant; from serious to playful; from ugly to kind-looking...
The issuance of NFTs allowed Trump to make a hefty profit, but he is not short on money. His fondness for NFTs stems from recognizing their immense potential, which is that NFTs can become the ultimate way to attract traffic. The super traffic effect and brand value exhibited by NFTs made Trump strongly feel the power of returning to the public eye.
Tracking reveals that Trump officially announced his candidacy for the 2024 presidential election on November 15, 2022, which coincided with a peak in the popularity of Trump's NFTs; on May 22 of this year, Trump clearly stated that his campaign would accept Bitcoin donations; two months later, at the 2024 Bitcoin conference, Trump loudly proclaimed 'Make Bitcoin Great Again' and threw out the vow to make the U.S. a 'Bitcoin Superpower' and 'Global Crypto Capital.' His presidential campaign is gradually moving closer to cryptocurrency.
As a political strategy, Trump has achieved tremendous success. In the U.S., about 40% of adults own cryptocurrencies, and this voter base has been captured by Trump. Cryptocurrencies, long marginalized, are desperately seeking political protection, and Trump has opened his arms at the right moment, leading to a harmonious embrace between the two sides. While capturing the voter base, Trump has also garnered donations from the cryptocurrency sector that far exceeded expectations. At a sensitive time when the Democratic Party's stance on cryptocurrencies remains uncertain, Trump boldly stepped forward to warm up the stage, and the eventual victory of his presidential campaign will further reinforce the historical logic of 'money politics' in the U.S.
Cryptocurrency receives multi-layer political endorsement
In addition to NFTs, Trump's digital asset wallet also contains several cryptocurrencies, including TROG, ETH, TRUMP, etc., with a total holding value exceeding $7 million. Trump, along with his son, established a cryptocurrency platform called World Liberty Financial aimed at providing digital asset lending and storage services, and is also actively working on acquiring the cryptocurrency trading platform Bakkt under his media technology group. As the first president globally to personally engage in the layout of crypto assets, Trump's powerful political endorsement is self-evident.
Just as many questioned whether Trump’s commitments to cryptocurrency could be fulfilled, he quickly responded with action. First, he nominated Paul Atkins for the SEC chair, and second, he selected David Sacks to be in charge of cryptocurrency affairs, known as the 'Crypto Tsar,' a new institution specifically established for cryptocurrencies by Trump. Paul Atkins is a renowned financial entrepreneur on Wall Street and a staunch supporter of cryptocurrency and fintech companies, while David Sacks is a well-known venture capitalist who holds blockchain technology and cryptocurrencies in high regard. The change in SEC leadership indicates that the regulation cryptocurrency will face going forward will be significantly relaxed. Additionally, this new institution will serve as a communication bridge between Trump, Congress, and various federal agencies around cryptocurrency-centric topics, and will effectively coordinate with specialized functional agencies such as the SEC and the Commodity Futures Trading Commission (CFTC), leading to systemic policy support for cryptocurrencies.
Further analysis reveals that nearly all key members of the cabinet appointed by Trump are enthusiasts of digital currency. Vice President Vance not only owns Bitcoin worth $250,000 but also explicitly advocates for relaxed regulation on digital assets; Treasury Secretary Kevin Walsh has expressed the view that 'cryptocurrency represents freedom'; Commerce Secretary Lutnik is a leading figure in the blockchain and digital enterprise Cantor Fitzgerald; National Intelligence Director Tulsi Gabbard has long advocated a decentralized ideology and has publicly claimed that Bitcoin can help the nation achieve financial sovereignty; Secretary of Health and Human Services Robert Kennedy sees Bitcoin as a powerful tool against the devaluation of fiat currency; National Security Advisor Mike Waltz also holds Bitcoin worth $100,000; Elon Musk, who heads the Office of Government Efficiency, is a 'trendsetter' in the cryptocurrency market. This formidable team will allow Trump’s crypto asset policies to be implemented smoothly, and with the upcoming change in the Federal Reserve Chair in 2026, Trump's proposals for establishing a Bitcoin strategic reserve and never allowing the creation of a CBDC (Central Bank Digital Currency) may accelerate realization.
In addition to government support, the crypto industry has also rarely received backing from Congress. Statistics show that the number of congressional members supporting cryptocurrencies exceeds 300. Regarding Trump's plan to establish a Bitcoin strategic reserve, Senator Cynthia Lummis proposed the '2024 Bitcoin Act,' which centers on acquiring Bitcoin through the Federal Reserve System and internal funds of the Treasury, purchasing no more than 200,000 Bitcoins annually for five years, totaling 1 million Bitcoins, and holding the Bitcoins purchased by the government for at least 20 years, during which time they cannot be sold, exchanged, or auctioned except for repaying national debt. The bill proposes that the U.S. Treasury operate a decentralized Bitcoin storage network to ensure the physical and network security of national Bitcoin assets at the highest standards. Although the bill is still a rough idea, since the Republican Party controls both houses of Congress, similar matters that Trump endorses are expected to face little obstruction in Congress.
Welcoming a faster period of prosperity
The year 2024 is seen as a milestone year for the development of cryptocurrencies, marked by the SEC not only agreeing to issue a spot Bitcoin exchange-traded fund (ETF) but also opening the policy floodgates for Ethereum and other cryptocurrency ETFs. Large institutions such as U.S. listed companies, pensions, BlackRock, and Stanford funds are beginning to pour into the cryptocurrency market, thereby driving the size of spot Bitcoin ETFs to 82% of gold ETFs, achieving the trading goal of gold ETFs 20 years ahead of schedule. With the Trump administration about to further relax regulations and introduce supportive policies, even more pension funds and sovereign wealth funds may flood into the cryptocurrency market.
Compared to providing a legitimate trading channel for cryptocurrencies at the regulatory level, if Trump's proposal to include Bitcoin as a strategic reserve for the United States materializes, the resulting support and stimulation for cryptocurrencies will undoubtedly be greater. If Bitcoin attains the status of a strategic reserve, it would signify a grand transformation from a niche market asset to a public asset in the national treasury, significantly enhancing its legitimacy and recognition, and investor confidence in its long-term value would also increase markedly. As a strategic reserve asset, Bitcoin would join traditional reserve assets like gold and foreign currency reserves, providing economic stability and financial security for the nation. This recognition is likely to expand Bitcoin's place within the global financial system and encourage more central banks and governments worldwide to reassess their stance on Bitcoin and cryptocurrencies.
Due to the unique status of the dollar, the U.S. holds an advantage in influencing global financial changes, and the global cryptocurrency industry may be entering a significant opportunity for widespread application.
Currently, countries friendly to cryptocurrencies worldwide, in addition to the U.S., include developed economies such as Germany, Switzerland, and Italy, as well as newly industrialized countries like South Korea and Singapore, and emerging market economies like Russia and Brazil. Among them, El Salvador is the first sovereign nation in the world to upgrade Bitcoin to legal tender and has specifically enacted the 'Bitcoin Law'; Portugal allows property transactions to be conducted using cryptocurrencies; and countries like El Salvador, Singapore, Dubai, and Switzerland exempt cryptocurrency investments from capital gains tax and income tax. According to the 'Time Machine Theory,' innovative assets and mechanisms often spread from the U.S. to developed countries and finally to developing countries. Therefore, under the demonstration effect of the U.S., many countries around the world may further open policy doors for cryptocurrencies and even grant legal recognition.
Finally, it is important to emphasize the inherent uniqueness of Bitcoin itself. Unlike fiat currencies in reality, which have an unlimited supply (as long as the economy permits and human needs exist), Bitcoin has locked in a limit on its quantity from the very beginning, with a maximum supply of 21 million, of which 90% has already been mined, and mining difficulty continues to reach historical highs. The key issue is that the Bitcoin used for network transactions is actually much less. Some early 'miners' have forgotten their Bitcoin wallet accounts due to computer obsolescence, and it is estimated that about 2.78 million to 3.79 million Bitcoins may permanently disappear, equivalent to 17% to 23% of the total Bitcoin supply. The collectible value of Bitcoin associated with its scarcity is extraordinarily precious.
Moreover, Bitcoin, adhering to the principle of 'decentralization,' allows everyone to mine freely and engage in peer-to-peer transactions anonymously, significantly enhancing the security of circulation without interference and control from any third party, thus relieving people of the troubles caused by a lack of mutual trust (such as encountering counterfeit money or fraud) and somewhat alleviating public consumption panic (such as inflation). As the 'big brother' of the crypto industry, Bitcoin is followed and emulated by 'latecomers' like Ethereum. Although the latter may not be as fortunate as Bitcoin to be included in the U.S. strategic reserve, they can still share in the sunlight that falls from the industry.
