I. What does Trump's inauguration mean for the crypto industry?
The "Trump trade" since December has set the entire market on fire, and for the crypto industry, the focus has now shifted to the extent to which Trump will fulfill his campaign promises. During the power transition vacuum, Trump quickly nominated several key positions, and the selection of these officials will determine the direction of U.S. and global crypto policy over the next four years. This means that Trump's inauguration will truly change the current industry landscape, and regardless of the extent to which he fulfills his policies, it portends new and greater opportunities for the industry, as well as the policy uncertainties that come with it.
Before Trump officially takes office, let's first take stock of which officials have been nominated for key positions and how their attitudes and positions on the crypto industry are.
In terms of the U.S. political system, the cabinet of each president is mainly composed of two parts: one is the formal cabinet members who need to be confirmed by the Senate (such as the Secretary of State and other major administrative department heads); the other is cabinet-level officials who do not necessarily need Senate confirmation (such as the Chief of Staff and the National Security Advisor). Therefore, currently, in Trump's entire cabinet, the institutions directly staffed by crypto industry supporters or that have influence on the direction of crypto industry policy are as follows:
From the above figure, the most closely watched in Trump's entire cabinet system is the Office of Artificial Intelligence and Cryptocurrency Affairs, which is currently reported to be primarily responsible for formulating the regulatory framework for the entire crypto industry, liaising with the SEC, CFTC, Congress, etc., and the Crypto Advisory Council under it, which claims to be composed of 24 CEOs of crypto companies, providing policy recommendations. According to Trump's promises, the following new policies are worth noting:
1) Make the U.S. the global crypto capital
2) Stop the crackdown on cryptocurrencies upon taking office
3) Prevent the development of central bank digital currencies (CBDCs)
4) Establish a strategic Bitcoin reserve
5) Fire the SEC chairman
6) Prevent the sale of Bitcoin held by the U.S. government
7) Use Bitcoin to solve U.S. debt
8) Establish a more comprehensive crypto policy
9) Establish a Crypto Advisory Council
Looking at Trump's personnel appointments during the transition period, he has already completed items 5 and 9. Regardless of the new advisory agency, the Senate Cryptocurrency Committee, or the replacement of the SEC chairman, the crypto credentials of these promoted officials at least indicate that Trump is indeed fulfilling his campaign promises as planned.
For the crypto industry, at least on the regulatory front, on the one hand, the previously suppressed policies may be gradually relaxed, and on the other hand, more comprehensive legislation will further promote the industry's mainstream development.
II. What information does the Trump family's first project layout reveal?
Trump's change of attitude towards cryptocurrencies in his second term has undoubtedly had a tremendous boost to the entire industry. Not only has he set up a cabinet-level advisory team in the government, but his family has also begun to venture into crypto industry investments, which also provides a certain forward-looking basis for the subsequent relaxation of the entire regulatory environment.
At the beginning of 2025, the biggest trigger point for the industry is undoubtedly the MEME coin TRUMP personally released by Trump himself on the Official Twitter. The project was released in one day and surpassed a market capitalization of $30 billion, once again creating the industry's myth of overnight wealth.
The significance and value of Trump himself launching a coin is not limited to the addition of a celebrity MEME in the market. To a certain extent, it reflects that Trump's support and depth of involvement in the crypto industry may exceed market expectations, and after witnessing the rapid explosion of the TRUMP token's market value, he may further become an important support for Trump and his cabinet departments to promote the rapid normalization and relaxation of regulations in the crypto industry, which is undoubtedly a major positive for the crypto industry. In addition, a potential impact behind Trump's coin launch is that the on-chain trading volume and the myth of overnight wealth will directly put competitive pressure on centralized exchanges, making the competition in the entire industry more intense.
In addition to Trump's personal launch of the MEME coin, the most important project for the Trump family currently is World Liberty Financial (hereinafter referred to as WLFI). Although the project website states that Trump and his family members and companies are not employees of the project, Trump's three sons are all given the title of "ambassador", and Trump's close ally Steve Witkof (nominated as Middle East envoy) and his son are both co-founders of the project. In addition, the advisory team also includes partners and CEOs from well-known investment institutions such as Polychain and Scroll.
The project legally isolates itself from its relationship with the Trump family, but this kind of promotion, including the tireless promotion of the project by several of Trump's sons, makes it difficult for the market not to interpret it as: this is the Trump family's project.
The WLFI project has done relatively comprehensive legal work, using various means to avoid current regulations, such as making the tokens non-transferable and raising funds through the SEC's Regulation D Rule 506(c) provision, which has reduced the overall compliance risk of the project to a minimum. The project is still in public fundraising, with a total token supply of 20 billion, of which 5.49 billion have been sold so far. Due to the current non-transferability of the tokens, the overall progress is not as expected.
In terms of specific operations, the initial information provided is a DeFi project, mainly based on Aave to build decentralized lending, and there is not yet a relatively clear specific operation page. Another noteworthy thing is that since the end of November, the WLFI project has started to gradually buy a large amount of tokens, and due to its Trump-backed nature, this has also made the token purchases of the project a new market trend indicator. Overall, the areas and tracks involved in the project are as shown in the figure below:
From the tokens held in the above figure, it can be seen that in addition to BTC, ETH and stablecoins, the tokens mainly purchased by the WLFI project are mostly related to DeFi, due to its own DeFi positioning, and after the announcement of the cooperation with ENA in December 2024. In terms of trading, in addition to Coinbase, the other major operations are conducted on CowSwap.
From the team configuration, it can also be seen that the core team of WLFI is mostly from the DeFi background. For example, the technical lead Corey Caplan previously worked at the DeFi project Dolomite, and the chief developer Bogdan Purnavel was previously a developer at the DeFi project Dough Finance.
From the recent series of actions, it can be seen that regardless of personnel configuration or token asset purchases, the WLFI project of the Trump family is still focused on the DeFi field, which points to the possibility of some more relaxed policy expectations around the DeFi field.
III. What impact will the Trump family's project have on the DeFi track?
The MEME coin launched by Trump has undoubtedly brought huge imagination space to the market, and the president's personal involvement in launching a coin is unprecedented. Putting aside the consideration of vested interests, at least at the overall tone, it points to a more relaxed regulatory environment for the entire industry development in the next four years. If we further analyze the specific operation of this project, we can see that it is not a hasty coin launch, but has made full preparations in the legal framework, compliance, and institutional cooperation. The certainty and super narrative of the president's coin issuance is unique, and has thus created a unique on-chain market performance, but its support for the industry is currently limited to relaxed expectations. In the long run, its sustainability remains to be verified, and the Trump family hopes to build WLFI into a sustainable project.
Here is the English translation, with the terms in <> retained as is:Based on the series of operations and subsequent investments of the WLFI project, it can be roughly sorted out that the project has made some proactive responses based on regulatory compliance. Combining the fact that the US Internal Revenue Service proposed new DeFi tax regulations by the end of December 2024, it can be inferred that there will likely be relatively systematic legislative and regulatory measures for DeFI introduced in 2025, although they may not be as strict as the previous proposals from departments such as the US Internal Revenue Service. The foreseeable scenario is that DeFI compliance will become an important initiative that may be implemented in 2025, such as KYC (which the WLFI project also requires), anti-money laundering, and counter-terrorist financing.
However, from a more optimistic perspective, the WLFI project, as the first non- project promoted by the Trump family, on the one hand, indicates their optimism about the DeFi track, especially the future growth potential of DeFi; on the other hand, from a policy perspective, its compliance architecture has been relatively comprehensive in design and consideration from the very beginning, which means the project clearly knows that after Trump takes office, the relaxation of regulations and the comprehensive implementation of compliance may progress in parallel, which will be beneficial for the entire DeFI to enter the mainstream view.
Looking at Trump's own token issuance, the composition of his cabinet, and the DeFi projects launched by his family, Trump's supportive attitude towards the entire cryptocurrency industry has become relatively clear. However, the extent to which his regulation will be relaxed still remains uncertain, and the market will continuously adjust its expectations around these new policies. But at least before the 2027 US midterm elections, the resistance to the implementation of many of Trump's policies will be significantly reduced, which is a relatively favorable key period for DeFi and the entire cryptocurrency industry.
