Investors Are Pinning Hope That Trump Could Send Crypto Valuations to The Moon

In a highly speculative cryptocurrency landscape, the arrival of the outspoken and crypto-friendly President Trump appears to be a match made in heaven for investors. With talk of a Strategic Bitcoin Reserve, deregulation, and the recent launch of an official Trump meme token, it’s clear that Trump’s relationship with the crypto ecosystem will be pivotal. But can Trump 2.0 drive the likes of Bitcoin and other altcoins higher?

Trump was keen to underline the proactive role that he will take with cryptocurrencies throughout his Presidency. On the campaign trail, the Republican candidate talked of making the United States the ‘crypto capital of the planet’, and shared bold ambitions to stockpile Bitcoin in a way that would’ve catapulted the cryptocurrency’s scarcity.

It’s perhaps no surprise that the President’s courting of cryptocurrency investors saw Bitcoin rally beyond a value of $100,000 for the first time in its history in the weeks following Trump’s resounding US election victory.

The first move Trump made in the cryptocurrency ecosystem, launching his own official meme coin called $TRUMP, followed by $MELANIA, proved controversial, to say the least. But it still represents the first direct involvement of a President within the world of crypto.

With investors hungry for more positive news as Trump’s second term is underway, could the returning President’s attitude towards cryptocurrencies like Bitcoin really cause the market to reach new heights?

Hopes for a Strategic Bitcoin Reserve

Many cryptocurrency investors have been eager to see Trump make good on his pledge to create a Strategic Bitcoin Reserve, which would see the US invest heavily into the cryptocurrency.

Optimism among investors is that the move would add billions to the market capitalization of the crypto landscape, helping to grow their investments and improve crypto acceptance on a wider scale.

While some had hoped for plans to be announced on day one of Trump’s return to office, the President instead instructed his administration to evaluate the credibility of creating a national digital asset stockpile.

The announcement did little to boost crypto markets, and investors will have to wait a little longer to see whether a Strategic Bitcoin Reserve could come to fruition.

“Crypto bulls are eagerly waiting for Trump to create a ‘Strategic Bitcoin Reserve,’ suggests Maxim Manturov, head of investment research at Freedom24. “Under the so-called Bitcoin Act, the US must accumulate 1 million bitcoins within 20 years, with the goal of owning roughly 5%of the total supply.”

“The industry is enthusiastic about the idea. Assuming that a limited supply of the token will drive up the price, accumulating some bitcoin today could allow the U.S. to offset its growing debt problems in the coming years,” Manturov adds. “Coupled with huge demand from ETF funds, this could create a strong supply-demand imbalance, against this backdrop there are various expectations for the price of BTC from $125k in 2024 to $2.9 million by 2050.”

The Prospect of Deregulation

The departure of Gary Gensler as head of the Securities and Exchange Commission was welcomed by cryptocurrency enthusiasts who believed Gensler adopted an unfairly aggressive stance on the ecosystem.

Trump appears set to go further than creating a more conducive regulatory environment for crypto and seems set on embracing widespread deregulation as part of a larger growth-focused initiative toward boosting markets.

The prospect of a more lenient regulatory environment for cryptocurrencies, and the repeal of some existing rules, could help to boost the entire cryptocurrency sector.

With Congress firmly under republican control, it will be easier to enact new laws and proposals, including regulatory frameworks and a stablecoin bill to help foster more widespread acceptance of digital assets.

However, there will need to be some caution in how far regulators can loosen the cryptocurrency landscape. The industry has proven time and again to be filled with predators looking to scam unwitting investors, and without a sufficient framework in place, there may be further reputational damage to the crypto landscape.

The Curious Case of $TRUMP

In the days leading up to Trump’s inauguration, affiliated companies launched the $TRUMP meme token, which has divided investors.

The key cause for concern is the ownership structure of the token, which has an ownership structure where linked companies CIC Digital LLC and Fight Fight Fight LLC own 80% of the supply of tokens. The three-year unlocking schedule of these tokens has caused critics to view $TRUMP as a money-making scheme.

Omid Malekan, associate professor at Columbia Business School, stopped short of calling the meme coin launch a ‘scam’ because there was no element of deception associated with the coin.

Taking an optimistic view, the launch of $TRUMP could represent a testing of the crypto waters, where the President can gain an insight into the mechanics of the industry for future policies. However, in a deregulatory environment, pivoting to the famously volatile meme coin faction of crypto investing is likely to be a cause for concern for cryptocurrency enthusiasts.

Patience May be a Virtue

Given that Trump has made a series of economic, trade, geopolitical, and immigration-focused pledges on the campaign trail, we may have to wait a little longer to gain an impression of the President’s intentions for crypto.

Whether the Trump administration’s exploration into the viability of a Strategic Bitcoin Reserve leads to its creation will be especially pivotal for Bitcoin investors at a time when expectations are high for a market rally in 2025.

However, with Trump making 46 Presidential actions on his first day in office, all of which focused on matters away from the crypto industry, the path to the moon may be a little longer than initially hoped.