Market performance fell short of expectations; has Trump's cryptocurrency policy been underestimated?

Author: Huo Huo, Baihua Blockchain

At the end of last year and the beginning of this year, the newly elected President Trump made numerous promises regarding Bitcoin and the cryptocurrency industry during the election and before taking office, directly fueling waves of enthusiasm in the crypto market. Although Trump did not "burn bridges" as some commentators suggested after taking office, he constructively implemented various favorable policies for crypto that he had previously promised. However, the subsequent rollercoaster market for his family's TRUMP Memecoin, combined with complex external factors such as tariffs, caused market sentiment to shift from euphoria to panic, sparking considerable controversy.

Currently, the performance of the crypto market is below expectations, seemingly not reflecting the long-term impact of Trump's series of Bitcoin/crypto policies. Are these really being underestimated?

01. Implementation Status of Trump's Ten Crypto Policy Promises

During his 2024 presidential campaign, Trump proposed ten cryptocurrency policy commitments, clearly stating his intention to promote the development of the U.S. crypto industry and establish a friendly regulatory framework for it.

However, in his inauguration speech on January 20, Trump did not mention anything related to crypto. Nevertheless, David Bailey, CEO of Bitcoin Magazine, later stated that executive orders related to Bitcoin and cryptocurrencies had been included in the first 200 executive orders after Trump's inauguration, indicating that crypto policies would still be promoted.

As time has passed, Trump has been in office for nearly a month. How are these ten policies being fulfilled?

1) Make the U.S. the global cryptocurrency capital

On January 23, 2025, Trump signed an executive order aimed at promoting the U.S. leadership in crypto assets and financial technology, emphasizing support for the development of blockchain and crypto assets. David Sacks, the AI and cryptocurrency commissioner appointed by Trump, stated, "We want to make America the world capital of artificial intelligence and bring substantial economic benefits to the nation."

2) Stop the crackdown on the crypto industry within an hour of taking office

On January 23, Trump signed an executive order to establish a cryptocurrency working group aimed at proposing a new regulatory framework for crypto assets and exploring the creation of a national Bitcoin reserve.

3) Prevent the U.S. government from further developing Central Bank Digital Currency (CBDC)

The executive order on January 23 explicitly prohibits the establishment, issuance, or promotion of CBDCs within the U.S. and requires the immediate termination of any related plans.

4) Establish a strategic Bitcoin reserve

Currently, the government is evaluating the possibility of establishing a reserve of crypto assets, but no final decision has been made yet. However, on January 23, Senator Cynthia Lummis, who proposed the "Bitcoin Bill," was appointed as the chair of the Senate Banking Committee's crypto asset subcommittee, which should further promote the bill.

5) Dismiss SEC Chairman Gary Gensler

Gary Gensler had already left office by January 20, and on January 21, Trump announced that Republican SEC Commissioner Mark T. Uyeda would serve as acting chairman until Paul Atkins (Trump's nominee to replace Gensler) completes the Senate confirmation process. On the same day, Mark announced the establishment of a cryptocurrency working group to develop a clear and concise regulatory framework for U.S. crypto assets.

Additionally, according to news on February 4, the Trump administration is reducing the members of the SEC's cryptocurrency enforcement team, which was specifically responsible for crypto enforcement actions and consisted of over 50 lawyers and staff, although the exact number of layoffs is not yet known.

6) Prevent the U.S. from selling its Bitcoin holdings

Currently, there has been no official statement clarifying the U.S. government's Bitcoin holdings, so we will have to wait for further news.

7) Suggest using cryptocurrency to solve the U.S. debt problem

There is currently no public information indicating that the government has taken concrete measures to use crypto assets to address national debt.

8) Propose a comprehensive crypto policy

There has been no comprehensive crypto policy introduced yet. The crypto group established by the newly signed executive order mentioned below has instructed relevant agencies to submit regulatory and legislative recommendations regarding crypto assets within 180 days to formulate a comprehensive cryptocurrency policy.

9) Establish a cryptocurrency advisory committee

A working group composed of senior officials from multiple departments has been established to propose a regulatory framework for crypto assets.

10) Reduce the sentence of Silk Road founder Ross Ulbricht

On January 23, Trump signed a pardon that released Ross Ulbricht, who had been serving an 11-year sentence.

As of now, most of the ten crypto-friendly policies promised by Trump have been implemented, especially in terms of establishing regulatory frameworks and policy support, although some policies will require time to fully realize.

02. Other Crypto Developments from Trump

However, in addition to the crypto-related parts of the first 200 executive orders after taking office and the previously promised crypto policies, Trump has also engaged in many other explorations related to crypto before and after his term.

1) Support the launch of the DeFi platform World Liberty Financial

World Liberty Financial (WLFI) is a decentralized finance (DeFi) project supported by the Trump family, launched in September 2024, providing blockchain financial services such as lending, trading, and yield. Although Trump and his children actively promote it, WLFI has no direct legal relationship with the Trump family and is only authorized to use their brand for promotion. This ambiguous relationship has raised market skepticism, and the WLFI token only has governance functions without economic rights, with initial token sales being mediocre.

However, with Trump's inauguration and the spread of the TRUMP Memecoin effect, WLFI's market popularity has risen. After January 20, 20% (2 billion tokens) of its tokens were sold, raising $1 billion. Driven by market demand, WLFI sold an additional 5% (500 million tokens) at a price of $0.05, which was an increase from the initial price. As of February 12, 81% of the tokens had been sold.

WLFI not only relies on the Trump brand but also includes seasoned professionals from the crypto industry in its team and has established partnerships with organizations such as Aave and Ethena Labs. Its multi-signature address currently holds over $74.5 million in crypto assets, primarily invested in ETH, WBTC, AAVE, and others.

2) Launch TRUMP Memecoin

On January 17, just three days before the presidential inauguration, Trump launched "TRUMP Memecoin" on Solana, which saw its market cap soar to $14.5 billion within just two days, driving Bitcoin to break $109,000. However, the hype quickly faded, and by January 30, the market cap had dropped by two-thirds, with transaction fees reaching as high as $86 million to $100 million. Trump's wife, Melania, subsequently launched "MELANIA Memecoin," which also experienced a sharp decline, with TRUMP falling 64.7% in a week and MELANIA dropping over 80%.

Price trend of TRUMP Memecoin since its issuance, source: CoinmarketCap

TRUMP is primarily led by Trump's CIC Digital company, which profits mainly through transaction fees, with specific earnings and ownership remaining opaque. On-chain data analysis indicates that TRUMP initially launched on the DEX Meteora, and among the early holders of this Memecoin, at least 50 major investors each made over $10 million, while about 200,000 small investors suffered losses.

It is noteworthy that the issuance of TRUMP temporarily caused a "vampiric effect" in the market, draining liquidity and leading to a general decline in cryptocurrencies outside the Solana ecosystem. Subsequently, the WLFI project supported by Trump began to buy ETH assets in batches.

3) Establish a cryptocurrency working group

On January 23, 2025, the executive order signed by Trump established a new special group—the cryptocurrency working group—aimed at proposing new regulatory laws for crypto assets and exploring the possibility of establishing a national cryptocurrency reserve. This working group is led by David Sacks, the AI and cryptocurrency commissioner appointed by Trump, and includes high-ranking government officials such as the Secretary of the Treasury, Attorney General, Secretary of Commerce, SEC Chairman, and CFTC Chairman.

According to the executive order, the working group will submit a report within 180 days, proposing regulatory recommendations regarding stablecoin management, market structure, consumer protection, and assessing the feasibility of establishing a national crypto asset reserve. Sacks stated, "We want to make America the world capital of artificial intelligence and bring substantial economic benefits to the nation."

This initiative focuses on the integration of artificial intelligence and crypto assets, which was not mentioned in Trump's election promises. Currently, Trump aims to position the U.S. as a global leader in these key technology areas, attempting to leverage the synergistic development of artificial intelligence and crypto assets to further enhance the U.S.'s competitive advantage in global technology.

03. What Do Crypto KOLs Think?

The views of KOLs on Trump's crypto policies are diverse and complex. Based on some discussions and analyses online, here are some summarized categories of major viewpoints:

1) Optimists

Some KOLs believe that Trump's policies will have a positive impact on the cryptocurrency industry. They point out that Trump's executive orders may signify a shift from regulatory suppression to supportive policies, such as stopping the SEC's crackdown on cryptocurrencies, making the government more accepting of crypto technology, and involving entrepreneurs in policy-making. These changes are seen as potentially bringing more innovation opportunities and regulatory clarity to the industry.

For example, Marc Andreessen, co-founder of a16z, stated that Trump's policies are favorable for the cryptocurrency industry. He has expressed confidence in the regulatory easing and policy support that the Trump administration may bring in various interviews and public discussions.

Crypto analyst @skydegencall noted that Trump has not only continued to support cryptocurrencies after the election but has also included Ethereum in his economic plan, believing this will change the game and that crypto assets will become part of Trump's legacy.

Solana community leader @sol_jingou believes that Trump's executive orders will trigger a series of chain reactions, including stopping the SEC's crackdown on cryptocurrencies, making government agencies accept crypto technology, involving entrepreneurs in policy-making, and the government itself becoming a participant in the crypto market, asserting that the winners this time will not be short-term speculators.

Crypto technology expert @0xCheshire also mentioned that Trump's executive orders would lead to the SEC easing its crackdown on cryptocurrencies and the government accepting crypto technology, while pointing out that this policy shift is very beneficial for the industry, viewing the transition from high-pressure regulation to full support as a 180-degree turn.

2) Skeptics and Critics

There are also KOLs who are skeptical of these policies. They worry that Trump's policies may be more driven by political or personal interests rather than a genuine understanding and support of crypto technology. Particularly in discussions about Trump's own cryptocurrency, such as TRUMP, some have questioned whether this could lead to market manipulation or conflicts of interest.

For instance, Coinbase CEO Brian Armstrong expressed that he welcomes the potential regulatory easing that Trump's policies may bring, but he is concerned about whether the policies can truly serve the industry, avoid conflicts of interest, and provide long-term stability. He has repeatedly emphasized in public that any policy must genuinely understand and support the fundamental principles of cryptocurrencies, such as decentralization and user privacy.

Finance associate professor @LarisaYarovaya published a critical article in The Guardian, arguing that Trump's crypto policies could leave investors unprotected and vulnerable to financial manipulation, misconduct, and bubble bursts.

Bloomberg investigative reporter @ZekeFaux expressed concerns during an NPR interview about Trump and his family's entry into the crypto space, particularly regarding potential conflicts of interest arising from Trump launching his own cryptocurrency.

U.S. Senator @ElizabethWarren expressed concerns about Trump's crypto policies, emphasizing that such policies may be for personal gain rather than public benefit.

Overall, the views of KOLs reflect a duality of expectations and concerns regarding Trump's crypto policies. Most acknowledge that policy changes may bring opportunities, but many voices also caution the need to carefully observe the actual execution and impact of the policies.

04. Conclusion

On one hand, many of the ten crypto policy commitments proposed by Trump have begun to be implemented, such as the establishment of a cryptocurrency working group, stopping the crackdown on the crypto industry, and exploring the establishment of a Bitcoin reserve. However, some commitments have not yet been fully realized, such as using cryptocurrencies to solve national debt issues and launching a comprehensive crypto policy.

On the other hand, Trump's active involvement in the crypto space extends beyond policy support to actual business operations. He has established a cryptocurrency working group, launched the TRUMP coin, and supported decentralized finance (DeFi) projects like World Liberty Financial. This indicates that Trump's participation in cryptocurrencies goes beyond mere rhetoric; he is pushing market innovation through specific projects and policies, aiming to establish his influence in the cryptocurrency field.

Additionally, these initiatives reflect Trump's desire to leverage the potential of cryptocurrencies and related technologies to enhance the U.S.'s leadership position in the global crypto market and financial technology sector. Whether through his own cryptocurrency or supporting decentralized finance platforms, he is bringing more policy support and market opportunities to the cryptocurrency industry. However, these actions have also raised market concerns about potential conflicts of interest and transparency, especially regarding Trump's and his family's roles in crypto projects, which have drawn some criticism.