1. Introduction

In recent years, the cryptocurrency market has rapidly emerged globally, attracting significant attention from investors with assets like Bitcoin and Ethereum. Based on blockchain technology, cryptocurrencies are decentralized, anonymous, and facilitate convenient transactions, leading to rapid growth and increasing influence over traditional finance and the broader economy. However, the cryptocurrency market is highly volatile and lacks a mature regulatory framework, posing numerous uncertainties.

Donald Trump, as a highly influential political figure in the U.S., has exerted a broad influence on the economic sector. His stance on cryptocurrencies has undergone a significant transformation. Initially, he was critical of cryptocurrencies, viewing them as unstable and potentially fueling illegal activities, emphasizing that the U.S. dollar should remain the only reliable currency. However, during his 2024 presidential campaign, he shifted to strongly supporting cryptocurrency development, proposing a series of supportive policies, such as making Bitcoin a U.S. strategic reserve asset, establishing a Bitcoin and cryptocurrency advisory committee, and promoting the transfer of cryptocurrency regulatory authority. This shift not only sparked political discussions but also sent ripples through the cryptocurrency market, drawing significant attention to the potential impact of his policy changes.

2. Overview of Trump’s Relationship with the Cryptocurrency Market

2.1 Trump’s Shifting Stance on Cryptocurrencies

Trump’s attitude toward cryptocurrencies has undergone a marked shift, showing distinct stages. Initially, Trump adopted a critical and skeptical view. In 2019, he emphasized on Twitter, “We have only one real currency in the U.S., and it’s called the dollar,” clearly expressing his disapproval of cryptocurrencies. In 2021, during an interview with Fox News, Trump described Bitcoin as a “scam,” likening its value to “thin air,” pointing out its volatility and stating that unregulated cryptocurrencies might encourage illegal activities, such as drug trafficking. He also called for strict banking regulations on cryptocurrency issuers. During this period, Trump’s views were shaped by concerns over traditional monetary systems, financial risks, and the fight against illegal activities, reflecting the widespread concerns over the early-stage development of cryptocurrencies, including technical issues and regulatory gaps.

A turning point came between 2022-2023 when Trump, preparing for his second presidential bid, began to engage more with the cryptocurrency sector. A notable event was his release of NFT products. His series of NFTs featuring caricatures of himself sold out in a single day, marking a success that not only generated revenue but also opened his eyes to the market potential and promotional value of cryptocurrencies. This experience became a key catalyst for his attitude shift.

By 2024, during his presidential campaign, Trump made a dramatic 180-degree turn, embracing cryptocurrency enthusiastically. At the 2024 Bitcoin conference, he announced that if he returned to the White House, he would make Bitcoin a strategic reserve asset for the U.S., stating, “If Bitcoin is going to the moon, I want the U.S. to be at the forefront.” He emphasized that he wanted the U.S. to become a “Bitcoin superpower and the global hub for cryptocurrency,” pledging to fire the head of the SEC, Gary Gensler, on his first day in office in order to reduce regulatory burdens and promote cryptocurrency development. Since then, he has continuously proposed policies and made statements to support the cryptocurrency industry, driven by both political considerations to appeal to voters and recognition of the vast potential of the cryptocurrency market.

2.2 Key Events Involving Trump and Cryptocurrencies

1. Launch of Trump Meme Coin: On January 17, 2025, Trump announced the release of his personal “meme coin” (TRUMP) on the “Truth Social” platform and X. This coin was dubbed the “official Trump meme coin” and celebrated a leader who never backs down. The coin had no intrinsic economic or trading value and was seen as a speculative trading tool. After its release, its trading price surged by over 600%, peaking above $32, with a market capitalization exceeding $5 billion. This event caused significant volatility in the cryptocurrency market and raised ethical concerns about Trump possibly profiting from his presidential status. Seeing the success of “TrumpCoin,” Melania Trump, the First Lady, also launched her own meme coin—“MelaniaCoin” ($MELANIA).

   
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2. Issuance of Cryptocurrency Executive Order: On January 23, 2025, Trump signed an executive order to establish a Presidential Working Group on Digital Assets, aimed at evaluating the feasibility of creating a national digital asset reserve and developing a regulatory framework. This move was seen as a response to the Biden administration’s “crackdown” on the cryptocurrency sector and reflected Trump’s determination to boost the U.S.’s influence in the digital asset field, laying the groundwork for future cryptocurrency policies.

3. Announcement of Cryptocurrency Reserve Plan: On March 2, 2025, Trump announced that XRP, Solana (SOL), and Cardano (ADA) would be added to the U.S. cryptocurrency reserve. He had also previously planned to include Bitcoin and Ethereum in this reserve framework. After the announcement, the cryptocurrency market surged by over $300 billion in a single day. Bitcoin surpassed $95,000, and the 24-hour price increases of ADA, XRP, and ETH were 59.61%, 23.73%, and 9.57%, respectively, demonstrating the significant influence of Trump’s statements on the market.

4. Hosting the White House Cryptocurrency Summit: On March 7, 2025, Trump hosted the first-ever White House Cryptocurrency Summit, attended by around 30 senior government officials, lawmakers, and corporate executives. During the summit, Trump declared that the previous administration’s “war” on cryptocurrencies had ended, supporting legislation from Congress to provide regulatory certainty for the cryptocurrency and digital asset markets. While no substantive policy documents were released, the summit symbolized a significant shift in the U.S. government’s stance on cryptocurrencies, signaling a pivotal moment for the industry.

3. Trump’s Policies and Their Direct Impact on the Cryptocurrency Market

3.1 Analysis of Campaign Promises and Policy Proposals

During the 2024 presidential campaign, Trump proposed a series of notable new cryptocurrency policies covering multiple key areas, aiming to reshape the U.S.’s position in the global cryptocurrency landscape and drive industry growth.

1. Building the World’s Cryptocurrency Hub and a Bitcoin Superpower: Trump explicitly stated his intention to establish the U.S. as the world’s cryptocurrency hub and a Bitcoin superpower. This goal stems from an understanding of global cryptocurrency market trends. As cryptocurrencies gain increasing influence worldwide, countries are scrambling to position themselves in this emerging field. Trump believes that if the U.S. does not actively embrace crypto technology, nations like China will dominate the sector, posing a challenge to America’s economic and technological leadership. By positioning the U.S. as the central hub for cryptocurrencies, Trump aims to attract global crypto businesses, investors, and innovators, thereby enhancing U.S. leadership in financial innovation and solidifying its status as an economic powerhouse.

2. Establishing a Presidential Advisory Committee on Bitcoin and Cryptocurrencies: Trump plans to create a dedicated Presidential Advisory Committee on Bitcoin and Cryptocurrencies, composed of professionals passionate about the industry, tasked with designing transparent regulatory guidelines. Currently, the cryptocurrency industry lacks a unified and clear regulatory framework, leading to market chaos and inadequate protection for investor rights. The establishment of this committee would pool industry expertise to develop practical regulatory policies that align with market development, standardize market order, provide institutional safeguards for the healthy growth of the cryptocurrency industry, and boost market confidence.

3.Creating a Strategic Bitcoin Reserve: One of the standout proposals in Trump’s policy agenda is the creation of a strategic Bitcoin reserve. He plans to incorporate Bitcoin and other cryptocurrencies into the national strategic reserve system, signaling direct U.S. government participation in the digital asset market. This move carries multiple implications. On one hand, recognizing Bitcoin’s value and committing not to sell government-held Bitcoin demonstrates long-term confidence in cryptocurrencies, providing macro-level stability to the market. On the other hand, a strategic reserve would enhance the U.S. government’s influence in the global cryptocurrency market, securing a competitive edge in international finance.

1. Leveraging Cryptocurrencies to Address the Debt Crisis: Trump proposed using cryptocurrencies to tackle the U.S. debt crisis, opening new avenues for crypto applications. The U.S. has long grappled with debt issues, and traditional solutions have had limited effectiveness. Cryptocurrencies, with their decentralized and globally circulating nature, could offer innovative approaches—such as issuing crypto-based financial products or attracting international capital through crypto markets—to address debt challenges while creating new opportunities for the global cryptocurrency market.

2. Ending the Biden Administration’s “Crackdown” on Cryptocurrencies: Trump pledged to reverse the Biden administration’s “crackdown” on cryptocurrencies and Bitcoin, protecting Bitcoin mining and trading rights while ensuring sufficient electricity supply to establish the U.S. as a Bitcoin mining powerhouse. Under Biden, strict regulatory measures stifled industry growth. Trump’s policy aims to lift these restrictions, unleashing industry potential. Bitcoin mining is a critical component of the crypto ecosystem, and by providing policy support and energy guarantees, the U.S. can attract more mining firms, foster a complete industrial chain, promote related industries, and create jobs.

3. Firing the SEC Chairman: Trump plans to dismiss Gary Gensler, the current SEC chairman known for imposing stringent regulations on crypto activities, to foster a more innovation-friendly regulatory environment. Under Gensler’s leadership, the SEC implemented rigorous oversight, which, while mitigating financial risks, also dampened innovation. Trump believes excessive regulation hinders the industry’s growth, and replacing the SEC head could recalibrate regulatory priorities, offering a more relaxed policy environment to spur innovation.

4. Establishing a Clear and Unified Regulatory Framework: Trump emphasized the need for a clear and unified regulatory framework covering stablecoin oversight, user self-custody rights, and other aspects to promote the safe and responsible expansion of stablecoins and cryptocurrencies. Stablecoins, as a bridge between cryptocurrencies and traditional finance, require robust regulatory clarity to reduce market risks and protect investors. Ensuring user self-custody rights aligns with the decentralized ethos of the crypto industry, fostering trust and healthy market development.

5. Terminating Central Bank Digital Currency (CBDC) Plans: Trump opposes the Treasury and other federal agencies’ plans to launch a CBDC, arguing that it would infringe on personal freedoms and undermine market competition. While many countries are exploring CBDCs, Trump’s stance is unique. He worries that CBDCs could lead to excessive government control over money supply and circulation, erode financial privacy, and stifle competition and innovation in the financial sector. This reflects his commitment to free markets and individual rights.

6. Reducing the Sentence of Silk Road Founder Ross Ulbricht: Trump proposed commuting the life sentence of Ross Ulbricht, founder of the darknet marketplace Silk Road, signaling support for the libertarian values within the crypto community. Silk Road was a notorious case of illegal crypto transactions, and Ulbricht’s harsh sentence was seen by some as overly punitive. Trump’s move aims to balance the need for combating illegal activities with fostering innovation, creating a more accommodating environment for the crypto community.

3.2 Policy Implementation Progress and Impact Assessment

After taking office, Trump swiftly acted on his campaign promises, advancing cryptocurrency policies that have had multifaceted effects on the market.

1. Executive Order and Task Force Formation: On January 23, 2025, Trump signed an executive order establishing the Presidential Task Force on Digital Asset Markets, laying the groundwork for future policy development. The task force is tasked with assessing the feasibility of a national digital asset reserve and drafting a regulatory framework, marking a new phase in U.S. government oversight of the crypto industry. This move signaled active government engagement, boosting market confidence and attracting more investors and businesses to the U.S. crypto market.

2. Progress on the Cryptocurrency Reserve Plan: On March 2, 2025, Trump announced the inclusion of Bitcoin, Ethereum, Ripple, Solana, and Cardano in the U.S. strategic cryptocurrency reserve. The market reacted strongly, with the total crypto market cap surging by over $300 billion in a single day, Bitcoin surpassing $95,000, and Cardano, Ripple, and Ethereum rising by 59.61%, 23.73%, and 9.57%, respectively, within 24 hours. However, the rally was short-lived, as prices later plummeted, reflecting market skepticism about the plan’s specifics and sustainability.

3. Regulatory Environment Shifts: The Trump administration adopted a more lenient stance toward crypto regulation. The SEC dropped investigations into several crypto firms and abandoned its lawsuit against Coinbase, the largest U.S. crypto exchange. This reduced compliance pressures, allowing companies to focus on innovation. New crypto projects and financial products, such as DeFi initiatives, emerged, offering investors more options.

4. Impact on Market Confidence and Investment: Trump’s policies initially boosted market confidence, driving significant capital inflows. In Q1 2025, U.S. crypto investment funds saw a 50% year-on-year increase in inflows, and the number of new crypto-related businesses surged. However, lingering uncertainties—such as the specifics of the crypto reserve plan and regulatory details—kept some investors cautious, contributing to ongoing market volatility.

3.3 Case Study: The Strategic Bitcoin Reserve Plan

1. Background: The U.S. decision to establish a strategic Bitcoin reserve stems from profound economic and geopolitical considerations. Globally, the dominance of the U.S. dollar in the international monetary system is under pressure. According to IMF data, by Q3 2024, the dollar’s share of global official reserves had declined to 57.4%, down 1.8 percentage points year-on-year—the lowest level since 1995. To counter this trend, the U.S. sought innovative financial instruments. Bitcoin, with its decentralized nature and fixed supply, emerged as a compelling option for diversifying national reserves. Domestically, the U.S. faces a persistent debt crisis, and traditional fiscal and monetary policies have shown limited efficacy. Trump’s proposal to explore Bitcoin as a strategic reserve asset reflects an attempt to leverage cryptocurrency as a potential tool for debt management.

2. Implementation: In January 2025, Trump signed an executive order to establish the Presidential Task Force on Digital Asset Markets, with the creation of a national digital asset reserve as one of its key tasks. On March 2, 2025, Trump officially announced the inclusion of Bitcoin, Ethereum, and other cryptocurrencies in the strategic reserve. The U.S. government holds approximately 200,000 Bitcoins, acquired through criminal or civil asset forfeiture proceedings, which will be counted as part of the strategic reserve. The executive order also requires a comprehensive accounting of the federal government’s digital asset holdings to ensure the transparency and standardization of the reserve plan.

3. Market Reaction: After the announcement, the cryptocurrency market immediately surged, with prices of Bitcoin and other cryptocurrencies rising sharply. The total market capitalization of cryptocurrencies increased by approximately 10% within hours, exceeding $300 billion. However, the market subsequently experienced a correction, with the price of Bitcoin dropping by about 5%, and Ethereum, Ripple, and others also declining to varying degrees. The market’s “voting with its feet” was primarily due to two reasons: first, the market had originally expected the U.S. government to continue purchasing and increasing its Bitcoin holdings to drive prices higher, but in reality, the plan only involved reclassifying existing Bitcoins as reserve assets without any new capital inflows; second, the executive order did not provide detailed explanations regarding whether tokens like Ripple would be included in the reserve, leading to increased market uncertainty.

4. The plan has sparked widespread controversy. In terms of controversies, first, there is the risk of insider trading, as anonymous traders placed bets on Bitcoin hours before Trump’s announcement, profiting from the surge and raising concerns that the cryptocurrency reserve could become a vehicle for fraud and insider trading. Second, there are suspicions of market manipulation, with the Federal Reserve publicly opposing the government-led hoarding of Bitcoin, fearing that the government’s large-scale holdings of Bitcoin could allow it to influence prices through policy adjustments, leading to accusations of the government “acting as both referee and player.” Third, the actual effectiveness of the plan is questionable. Some financial experts believe that the idea of establishing a cryptocurrency reserve to address inflation and debt issues is unrealistic. Austin Campbell, a professor at NYU Stern School of Business, pointed out that this could pose a threat to the global value of the U.S. dollar. In terms of impact, if the plan is successfully implemented, it will position the United States as a major player in the global cryptocurrency market, enhancing its influence over the market. At the same time, it may also prompt other countries to follow suit, leading to a reshaping of the global cryptocurrency market landscape.

4. The Impact of Trump’s Statements on Cryptocurrency Market Investor Sentiment

4.1 Impact of Statements on Short-Term Market Volatility

Trump’s remarks on cryptocurrency have consistently acted like boulders thrown into calm waters, creating significant short-term waves in the cryptocurrency market. Throughout his shifting stance, statements made at different stages have had immediate and pronounced effects on price movements.

In his early years, Trump maintained a critical view of cryptocurrencies. In 2019, he emphasized that the U.S. dollar was the only “real currency,” and in 2021, he bluntly called Bitcoin a “scam.” These statements triggered noticeable market turbulence. Following his negative comments on Bitcoin in 2021, the price of Bitcoin dropped by approximately 15% within a week, with other major cryptocurrencies like Ethereum also experiencing declines. As an influential political figure, Trump’s skepticism raised concerns among investors about the legitimacy and future of cryptocurrencies, prompting some to sell their holdings to mitigate risks. This led to an imbalance in market supply and demand, driving prices down.

However, during 2024-2025, Trump shifted to a supportive stance, and his pro-cryptocurrency remarks became powerful catalysts for short-term rallies. On March 2, 2025, when he announced plans to include Bitcoin, Ethereum, and other cryptocurrencies in the U.S. strategic reserve, the market erupted in euphoria. Bitcoin surged past $95,000 within hours, and the total cryptocurrency market capitalization jumped by 10%, 300 billion in value. Investors interpreted this as a sign of government endorsement, anticipating greater market opportunities and capital inflows, which fueled rapid buying activity. Yet, due to lingering uncertainties about policy specifics and macroeconomic conditions, prices later experienced sharp corrections—highlighting the market’s hypersensitivity to Trump’s statements and the extreme volatility they induce.

4.2 Long-Term Effects and Shifts in Market Expectations

Over the long term, Trump’s statements have profoundly altered investor strategies and market expectations. During his anti-crypto phase, investor confidence in cryptocurrency as a long-term investment was dampened. Many institutional and conservative investors, wary of regulatory risks, adopted a cautious approach—some even reducing or exiting their positions. This led to diminished capital inflows, slower market growth, and hindered mainstream financial acceptance of cryptocurrencies.

When Trump pivoted to support cryptocurrencies, investor behavior underwent a marked transformation. Institutional players began reassessing crypto’s investment merits, with previously hesitant firms increasing their exposure. For instance, certain hedge funds started allocating portions of their portfolios to Bitcoin and other major cryptocurrencies, seeking higher returns and diversification. Retail investors also followed suit, driving market expansion.

Market expectations shifted fundamentally, with investors anticipating more favorable U.S. policies—such as regulatory clarity and tax incentives—further influencing long-term investment decisions. This optimism has encouraged sustained participation in cryptocurrency markets.

4.3 Case Study: Trump’s Speeches and MAGA Memecoin Price Movements

The MAGA Memecoin, a cryptocurrency closely tied to Trump’s “Make America Great Again” slogan, serves as a real-time barometer of his influence on crypto markets. Launched on the Ethereum blockchain, it has attracted both Trump supporters and crypto traders.

Price fluctuations in MAGA Memecoin have directly mirrored Trump’s key statements. For example, during his 2024 Bitcoin conference speech, where he pledged to make the U.S. a crypto leader, the coin’s price skyrocketed by over 30% within hours. Investors viewed it as a direct beneficiary of Trump’s policies, triggering a buying frenzy.

Conversely, when Trump underperformed in events like the 2024 presidential debates, MAGA Memecoin plunged 14% as doubts emerged about his ability to deliver on crypto promises. This volatility underscores how Trump’s rhetoric and political fortunes directly impact asset prices, with investor sentiment acting as the critical transmission mechanism.

5. Indirect Impact of Trump’s Economic Policies on the Cryptocurrency Market

5.1 The Relationship Between Macroeconomic Policies and the Cryptocurrency Market

The series of macroeconomic policies implemented during Trump’s presidency, including fiscal and monetary policies, had a significant indirect impact on the cryptocurrency market. In terms of fiscal policy, the Trump administration enacted large-scale tax cuts aimed at stimulating economic growth and business investment. For example, the Tax Cuts and Jobs Act of 2017 lowered the corporate tax rate from 35% to 21%. This measure increased corporate disposable income in the short term, promoting economic expansion. However, the tax cuts also led to an expansion of the government’s fiscal deficit, with the U.S. federal government deficit reaching $984 billion in fiscal year 2019, the highest in seven years. The growing fiscal deficit resulted in a rising national debt, which surpassed $27 trillion in 2020.

These fiscal policy adjustments had several ripple effects on the cryptocurrency market. On one hand, the tax cuts stimulated economic growth and increased liquidity in the market, with some of the capital possibly flowing into the cryptocurrency market, driving cryptocurrency prices up. As businesses and individuals had more funds at their disposal, they may have sought additional investment channels, and cryptocurrencies, being a new investment asset with high potential returns, attracted the attention of some investors. On the other hand, the expansion of the fiscal deficit and the increase in national debt raised concerns about inflation. To preserve and grow their capital, investors might have allocated some funds into assets with anti-inflation properties, such as cryptocurrencies. Bitcoin, with its finite supply, was seen by some investors as “digital gold,” possessing certain anti-inflation properties, and thus, during rising inflation expectations, its demand and price could have increased.

In terms of monetary policy, the Federal Reserve’s policies during the Trump administration had a significant impact on the cryptocurrency market. When the economy faced downward pressure, the Fed implemented an accommodative monetary policy, such as multiple interest rate cuts and quantitative easing programs. In 2020, to combat the economic impact of the COVID-19 pandemic, the Fed reduced the federal funds rate target range to 0-0.25% and launched a massive quantitative easing program, purchasing government bonds and mortgage-backed securities. This accommodative monetary policy led to a sharp increase in the money supply, a depreciation of the dollar, and lower interest rates.

This monetary policy environment had a notable impact on the cryptocurrency market. The low interest rate environment caused traditional financial assets to offer lower returns, prompting investors to shift funds into the cryptocurrency market in search of higher yields. The high volatility and potential high returns of the cryptocurrency market attracted a large number of investors, driving cryptocurrency prices higher. Bitcoin’s price surged significantly between 2020 and 2021, rising from less than $10,000 in early 2020 to nearly $70,000 by the end of 2021, with accommodative monetary policy being a key driving factor. Additionally, the depreciation of the dollar made cryptocurrencies priced in dollars relatively more expensive, further attracting investor attention.

5.2 The Spillover Effects of Trade Policies on the Cryptocurrency Market

Trump’s “America First” trade policies, characterized by frequent trade disputes, had profound effects on the global trade landscape, which also spilled over into the cryptocurrency market. The Trump administration implemented several protectionist trade measures, such as imposing tariffs and setting up trade barriers. In 2018, the U.S. imposed tariffs on goods from multiple countries and regions, including China, the European Union, and Canada, affecting industries such as steel, aluminum, and automobiles. These trade policies led to heightened global trade tensions, suppressed international trade volumes, and created pressure on global economic growth.

The trade policies led to significant changes in the supply, demand, and capital flows within the cryptocurrency market. The escalation of trade tensions increased global economic uncertainty, undermining investor confidence in traditional financial markets. As a result, investors sought safer assets, and the cryptocurrency market, being relatively independent with decentralized and anonymous characteristics, was seen by some as a hedge against risks. During the escalation of trade disputes, some investors shifted their funds from traditional financial markets to the cryptocurrency market, leading to increased capital inflows and higher demand. Between 2018 and 2019, amid intensified U.S.-China trade friction, Bitcoin prices saw some level of increase, despite fluctuations, reflecting the impact of trade policies on capital flows in the cryptocurrency market.

Trade policies also affected the supply side of the cryptocurrency market. Trade disputes disrupted global supply chains, and some cryptocurrency-related companies faced operational challenges. The production and transportation of cryptocurrency mining equipment might have been hindered due to trade barriers, affecting mining efficiency and market supply. Furthermore, trade policies could have impacted cryptocurrency exchanges and related financial institutions’ business expansion, leading to a reduction in the trading activity of cryptocurrencies.

5.3 Case Analysis: Tariff Policy and Cryptocurrency Market Volatility

Trump’s tariff policies had a direct and significant impact on cryptocurrency market volatility. A notable example was the U.S.’s imposition of tariffs on Chinese goods in 2018, which triggered turmoil in global financial markets, and the cryptocurrency market was not immune. In March 2018, Trump announced a 25% tariff on imported steel and a 10% tariff on aluminum, followed by a list of $50 billion worth of Chinese goods subject to a 25% tariff. Following the announcement, global stock markets plunged, and investor panic spread.

The cryptocurrency market was also impacted, with Bitcoin’s price experiencing sharp fluctuations. Within a week of the tariff announcement, Bitcoin’s price dropped from around $9,000 to below $8,000, a decline of over 10%. Other major cryptocurrencies, such as Ethereum and Litecoin, also saw price drops, and the total market capitalization of cryptocurrencies significantly shrank. This occurred because the tariff policies increased global economic uncertainty, leading investors to reduce their exposure to riskier assets, including cryptocurrencies, which caused a supply-demand imbalance and a drop in prices.

As trade disputes escalated, the volatility in the cryptocurrency market further intensified. In September 2018, the U.S. announced a 10% tariff on $200 billion worth of Chinese goods, and China retaliated with corresponding measures. This event triggered another round of panic selling in the cryptocurrency market, with Bitcoin’s price falling from around $6,500 to about $5,800, a drop of over 10%. The trading volume in the cryptocurrency market surged, indicating the high uncertainty and investor panic.

Correlation analysis showed that Bitcoin’s price had a high negative correlation with global stock market indices during the trade dispute. When stock markets fell due to tariff policies, Bitcoin’s price tended to rise, and vice versa. This suggests that, during periods of economic uncertainty triggered by trade policies, Bitcoin functioned as a safe-haven asset, exhibiting an inverse relationship with traditional financial markets. However, this relationship was not absolute, as the cryptocurrency market was also influenced by its own technological developments, regulatory policies, and other factors, making its price movements complex and uncertain.

6. Impact of the Trump Family’s Cryptocurrency Business on the Market

6.1 The Family’s Engagement in the Cryptocurrency Field

The Trump family has been actively involved in the cryptocurrency sector, with its businesses and family members venturing into various crypto-related activities, demonstrating a diversified development strategy. Eric Trump, the second son of Donald Trump, announced the establishment of American Bitcoin in collaboration with Hut 8 Mining. The goal of this initiative is to set new standards for Bitcoin mining. The company plans to build the world’s largest cryptocurrency mining enterprise and intends to establish its own “Bitcoin Reserve.” This move indicates the Trump family’s deepening involvement in the Bitcoin mining industry, aiming to play a significant role by integrating resources and technology.

The Trump family-affiliated crypto platform “World Liberty Financial” (WLF) launched its “Strategic Token Reserve” plan, designed to support Bitcoin, Ethereum, and other cryptocurrencies. WLF stated that the new token reserve would help mitigate market volatility, invest in decentralized finance (DeFi) innovations, and establish a well-capitalized reserve. WLF also plans to collaborate with traditional financial institutions to inject tokenized assets into the reserve, thereby promoting transparency and innovative marketing through strategic partnerships. The Trump family also holds a majority stake in Trump Media & Technology Group, the company behind social media and streaming services. On January 29, it announced a shift towards crypto-related financial services, further expanding its business footprint in the crypto industry.

On the third day of Trump’s presidency, he launched his personal meme coin, “Trump Coin” (TRUMP). The initial offering on the first day was 200 million coins, with a plan to issue an additional 800 million over the next three years. The official website states that two subsidiaries of the Trump Group own 80% of “Trump Coin” and will benefit from the revenues generated by the trading activity of the coin. Later, on the evening of January 19, Melania Trump, the First Lady, announced the launch of her own cryptocurrency, “Melania Coin” (MELANIA). These two cryptocurrencies quickly attracted market attention due to the Trump family’s fame and influence, becoming a hot topic in the cryptocurrency market.

6.2 The Impact on Market Competition Dynamics

The Trump family’s business activities in the cryptocurrency field have led to multiple changes in the market competition landscape. In the mining sector, the establishment of American Bitcoin, backed by the Trump family’s influence and Hut 8 Mining’s expertise, may disrupt the existing competition in the Bitcoin mining market. The Bitcoin mining industry is highly competitive, with major players controlling a significant share of the hashing power and market share. The entry of American Bitcoin could introduce new technology and capital, increasing the level of competition in the market. This would encourage other mining companies to accelerate technological innovation and cost control in order to maintain their competitive edge. This could lead to a redistribution of mining power and drive the industry towards greater efficiency and sustainability.

In the cryptocurrency financial services sector, the “Strategic Token Reserve” plan by World Liberty Financial and Trump Media & Technology Group’s pivot to crypto-related financial services introduce new players and business models. The traditional cryptocurrency financial services market is dominated by large cryptocurrency exchanges and financial institutions, offering services such as trading, lending, and asset management. The entry of Trump family businesses enriches the range of services and competition in the market. With their unique brand advantages and resource integration capabilities, they could attract more users and capital, redistributing the market share. This will force other service providers to innovate and improve their service offerings to remain competitive.

The introduction of celebrity cryptocurrencies like Trump Coin and Melania Coin also has a unique impact on the cryptocurrency market’s competition. These celebrity-backed cryptocurrencies, leveraging the influence of famous personalities and social media promotion, attracted a large number of retail investors, forming a distinct market segment compared to mainstream cryptocurrencies. The emergence of these coins has altered the investment structure and market trends in the crypto space, diversifying market competition. Traditional cryptocurrency projects may face challenges from celebrity-backed cryptocurrencies, while those focused on social media marketing and community-building may take cues from their success to enhance their own competitiveness.

6.3 Case Study: Market Performance and Controversies Surrounding Trump Coin

1. Launch and Price Movement: Trump Coin was launched on the evening of January 17, 2025, and the official website called it “the only official Trump meme.” After its release, the coin’s trading price surged more than 600% overnight, with the price reaching over $32 at its peak. By January 18, 2:30 PM, its market capitalization exceeded $5 billion, trading volume surpassed $11 billion, and fully diluted valuation exceeded $27 billion. However, the price of Trump Coin subsequently plummeted, falling nearly 80% from its peak of $76 to around $17. According to reports from blockchain analytics company Chainalysis and The New York Times, the price drop led to losses for 810,000 investors, with total losses exceeding $2 billion.

   

2. Market Controversy: The launch and market performance of Trump Coin have sparked widespread controversy. The method of issuance has raised suspicions of insider trading. The first public bet on Trump Coin was made 3 hours before Trump’s announcement of the meme coin, with an investment exceeding $1 million. In the initial minutes of trading, a crypto wallet identified by the code 6QSc2Cx obtained a large amount of new tokens at the opening price of $0.18 per coin, accumulating 5,971,750 coins. Subsequently, this batch of tokens saw a significant price surge. Furthermore, Trump Coin was created 12 hours prior to Trump’s public announcement, providing insiders ample time to prepare, leading to accusations of market manipulation and insider trading.

3. Impact on Investors: The massive price fluctuations of Trump Coin had a severe impact on investors. Early traders and insiders are estimated to have made $6.6 billion in profit, while late-stage investors, mostly retail investors, suffered significant losses. Many retail investors bought in when the price was high, hoping to make substantial gains, but as the price plummeted, they faced enormous losses. Corey Frayer, a former cryptocurrency advisor at the U.S. Securities and Exchange Commission, stated that Trump is involved in a cryptocurrency scheme that harms investors’ interests, and the financial regulators he appointed would withdraw protections for the victims and possibly shield him and his family from regulatory consequences.

4. Impact on the Cryptocurrency Market: The appearance of Trump Coin has also had a negative impact on the reputation of the cryptocurrency market. Critics of the crypto industry have pointed to this as an example of the worst aspects of the market, arguing that celebrities are using cryptocurrencies to engage in hype, damaging the healthy development of the market. Maxine Waters, a member of the U.S. House Financial Services Committee, stated that many regulators, advocates, and policymakers have long been concerned about the rampant speculation in the crypto industry, and Trump’s actions would further tarnish the industry’s environment.

7. Market Responses to Trump’s Influence on the Cryptocurrency Market

7.1 Investor Responses and Behavioral Changes

As Trump began influencing the cryptocurrency market, investors’ strategies and behaviors underwent significant changes. When Trump initially expressed a critical stance on cryptocurrencies, investors generally adopted a cautious approach. Many investors reassessed the risks associated with cryptocurrency investments, fearing that policy uncertainty could lead to substantial asset value fluctuations. Conservative investors reduced their cryptocurrency investments or even exited the market completely, shifting their funds toward more traditional and stable investment areas such as bonds and gold. On the other hand, some more aggressive investors sought short-term speculative opportunities in market fluctuations, attempting to profit from buying low and selling high, but this strategy also involved significant risks.

As Trump’s stance shifted toward actively supporting cryptocurrency development, investor behavior changed again. Market confidence was greatly boosted, and large amounts of capital began flowing into the cryptocurrency market. Investors’ strategies gradually shifted from cautious to more aggressive. They not only increased investments in mainstream cryptocurrencies like Bitcoin and Ethereum but also began to pay attention to emerging cryptocurrency projects and related financial products. Some investors started to hold cryptocurrencies for the long term, expecting greater returns in the future. This change in investment behavior contributed to the flourishing of the cryptocurrency market, with a substantial increase in trading volume and a rapid rise in market capitalization.

Different types of investors responded differently to Trump’s policies. Institutional investors tend to be more cautious in their decision-making, considering various factors such as policy stability and the long-term development trends of the market. After Trump announced support for cryptocurrency policies, some large financial institutions began exploring how to integrate cryptocurrencies into their investment portfolios, with some even establishing dedicated cryptocurrency investment departments. In contrast, retail investors are more sensitive to market news, and their investment behavior is more easily influenced by emotions. After Trump’s remarks and policy announcements, retail investors often react quickly, leading to increased short-term volatility in the market.

7.2 Attitudes and Actions of Cryptocurrency Industry Professionals

Cryptocurrency industry professionals have generally welcomed Trump’s policies and actions, taking a series of steps to adapt to the new policy environment. Industry enterprises believe that Trump’s support for cryptocurrency development presents new opportunities for growth. Cryptocurrency exchanges have actively expanded their businesses, launching new trading products and services to meet the growing demands of investors. Some exchanges have plans to introduce more cryptocurrency derivatives trading, such as futures and options, to diversify the investment tools in the market.

Cryptocurrency mining companies have also seen new development opportunities. Trump’s promises to provide ample electricity support and protect Bitcoin mining and trading rights have improved the operating environment for mining enterprises. Many mining companies have increased their investments in mining equipment, expanded mining operations, and enhanced computing power. Some companies are also exploring more environmentally friendly and efficient mining technologies to meet the requirements for sustainable development.

Industry associations and organizations have played a positive role in communication and coordination during this process. They actively engage with government departments, reflecting the industry’s needs and suggestions, and providing references for policy formulation. Industry associations have also organized various seminars and training activities to help professionals better understand and adapt to the new policy environment, enhancing the overall quality and competitiveness of the industry.

7.3 Government Regulatory Authorities’ Positions and Actions

Government regulatory bodies in the U.S. and other countries have responded differently to Trump’s influence on the cryptocurrency market. Domestically in the U.S., there is some division among regulatory agencies regarding Trump’s cryptocurrency policies. The U.S. Securities and Exchange Commission (SEC) has previously implemented strict regulatory measures on the cryptocurrency industry, and Trump’s plan to dismiss the current SEC chairman could lead to changes in the SEC’s regulatory approach. Some SEC officials have expressed concerns about Trump’s policies, fearing that loosening regulations could increase financial risks and lead to market chaos. Meanwhile, the U.S. Commodity Futures Trading Commission (CFTC) has a relatively open stance on cryptocurrencies, and Trump’s policies could lead the CFTC to play a more significant role in cryptocurrency regulation, promoting the development of cryptocurrency derivatives markets.

Internationally, government regulatory bodies in other countries have been closely monitoring Trump’s cryptocurrency policies. Some countries are concerned that changes in U.S. policies could have spillover effects on the global cryptocurrency market, affecting their own financial stability. European Union countries have emphasized the need to strengthen regulatory coordination within the cryptocurrency market to avoid regulatory arbitrage due to changes in U.S. policies. Some emerging market countries are observing the implementation of U.S. policies, considering whether to adopt similar approaches to adjust their own cryptocurrency regulations. A few countries have raised concerns about Trump’s family involvement in the cryptocurrency business, fearing potential conflicts of interest and market manipulation. As a result, some countries have intensified their regulation of their domestic cryptocurrency markets to prevent risks related to Trump’s family’s cryptocurrency business from affecting their own markets.

Conclusion

The reactions of various market participants to Trump’s influence on the cryptocurrency market have been diverse. Investors adjusted their investment strategies based on Trump’s policies and statements, shifting from cautious observation to active investment. Cryptocurrency industry practitioners welcomed the policy shift, taking steps such as expanding their businesses and increasing investments. Government regulatory agencies showed differing views, with various U.S. regulatory bodies holding different stances, while other countries internationally closely monitored the situation and implemented varying responses.