Trump’s Second Term: A Game Changer for Crypto?
In Brief
Trump’s administration’s rapid institutional adoption and maturing market could significantly transform the global trajectory of digital assets, preparing the crypto sector for a transformation.
As Donald Trump starts his second term at the white house, the crypto sector is bracing itself for a long-awaited transformation. But, with institutional adoption accelerating and the market maturing, Trump’s administration has the power to redefine the global trajectory of digital assets.
Let’s see how he can do just that.
Executive Orders on The First Day
On his first day in office, President Trump could dramatically alter the crypto landscape through a wave of executive orders targeting regulatory challenges.
Some of these directives are rumored to roll out within his first week as president. At the forefront is a proposal to establish a Bitcoin Strategic National Reserve, a move that could cement Bitcoin’s status as a vital financial and strategic asset for the United States.
Another initiative includes creating a presidential crypto council featuring around 20 industry leaders while pushing the SEC to revoke SAB 121, which would relax stringent accounting standards for digital assets.
Additionally, Trump’s administration plans to implement broader crypto reforms, urging the SEC and CFTC to work together on digital asset oversight. This approach aims to create a unified and efficient regulatory framework.
Collectively, these measures highlight a strong commitment to positioning the U.S. as a global frontrunner in crypto innovation and governance.
A Change of Leadership in the SEC
Trump has suggested a shake-up in SEC leadership, criticizing its aggressive enforcement, which has cost crypto firms over $426 million in litigation. While replacing key officials without formal cause would be difficult, his campaign remarks signal a shift toward a more crypto-friendly regulatory approach.
Instead of heavy-handed penalties, his administration may push for clearer guidelines that balance compliance with innovation. If enacted, this change could create a more predictable environment for digital assets, encouraging growth while reducing the uncertainty that has plagued the industry in recent years.
Bitcoin Strategic Reserve
A cornerstone of Trump’s potential crypto policy is the creation of a Bitcoin Strategic Reserve (BSR)—a move that could elevate Bitcoin to the status of a national financial asset, similar to gold. Proposed by figures like Senator Cynthia Lummis, this initiative suggests that the U.S. Treasury holds Bitcoin as part of its reserves.
The reserve would likely begin with 80,000 BTC (worth ~$8 billion) currently held by the U.S. Marshals, seized from enforcement actions. Rather than auctioning these assets, as has been done in the past, they would be redirected into federal holdings. However, expanding the reserve to a substantial level—potentially 1 million BTC—would require congressional approval.
While executive orders could direct agencies to retain and study Bitcoin holdings, large-scale acquisitions would need legislative authorization and funding. The additional 920,000 BTC would have to be purchased through market or OTC transactions, potentially backed by U.S. gold reserves. This shift would require regulatory amendments to formally classify Bitcoin as a strategic asset, signaling a major shift in U.S. monetary policy and cementing Bitcoin’s role in the global financial system.
Blockchain in a Free Framework
Blockchain operates fundamentally differently from traditional banking systems, according to Georgia Tech Associate Professor Vassilis Zikas. While banks rely on centralized private ledgers, blockchain is a decentralized, transparent system accessible to all participants. This openness is a double-edged sword that enhances accountability but also raises privacy concerns.
Zikas highlights blockchain’s potential to streamline global transactions, making international transfers as seamless as domestic ones. Unlike traditional banking, which involves delays and fees, Bitcoin transactions between countries are identical to local transfers—a game-changer for global finance.
Trump’s previous administration took a mixed stance on crypto, cautiously supporting regulation of initial coin offerings and blockchain research funding. The Biden administration’s SEC-driven policies created uncertainty, pushing crypto innovation overseas and contributing to a prolonged “crypto winter.”
A return to pro-crypto policies under Trump could reposition the U.S. as a leader in blockchain development and digital asset regulation.
Two Tall Forks in the Road
While Trump has floated bold crypto initiatives, not all campaign promises materialize. Regulatory and legislative hurdles could slow or derail such plans, making it uncertain how much of his pro-crypto stance will translate into action.
Technology is Still Limited
Despite enthusiasm around blockchain, Georgia Tech’s Vassilis Zikas urges caution. He notes that while blockchain enhances privacy, it isn’t foolproof—identities can still be uncovered using certain tracking techniques. Absolute privacy is possible but could also facilitate illicit activities, making it a double-edged sword.
Geopolitical Crises
Market stability is another concern. Crypto’s volatility, combined with upcoming Basel III capital standards in 2025, could create new financial challenges.
The turbulence began Saturday night when Trump imposed 25% tariffs on imports from Mexico and Canada and 10% on China. Given the $1.6 trillion in trade at stake, uncertainty looms over financial markets, including crypto.
Jeff Park of Bitwise Asset Management believes a prolonged tariff war could ultimately boost Bitcoin by weakening the U.S. dollar and interest rates.
However, in the short term, Bitcoin often behaves like a risk asset, meaning it could react negatively to economic instability before benefiting from inflationary pressures.
A Fair Outlook
Trump’s presidency presents both opportunities and challenges for Bitcoin.
Pro-business policies and clearer regulations could drive adoption, but risks of centralization and overregulation remain. Bitcoin’s decentralized nature will face new tests in this shifting political landscape.
The administration may push for U.S. leadership in blockchain, using public-private partnerships to fuel innovation. For investors, the key is balancing optimism with caution—understanding policy impacts, preparing for volatility, and staying informed.
By adapting to these changes, Bitcoin holders can navigate uncertainty and position themselves for success in an evolving crypto market.
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About The Author
Victoria is a writer on a variety of technology topics including Web3.0, AI and cryptocurrencies. Her extensive experience allows her to write insightful articles for the wider audience.
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Victoria is a writer on a variety of technology topics including Web3.0, AI and cryptocurrencies. Her extensive experience allows her to write insightful articles for the wider audience.
