Author: David Feliba, CoinTelegraph; Compiled by Tong Deng, Jinse Finance
With Donald Trump's inauguration as the 47th president on January 20, the United States is ready to usher in a new era. This inauguration marks Trump's return to the White House after a four-year hiatus under former President Joe Biden, which has greatly boosted the morale and prices of the entire cryptocurrency market.
As people's expectations for the adoption of emerging technologies favorable to the industry's development have grown stronger, Trump's return is consistent with the surge in the price of Bitcoin (BTC) to new highs. Trump's appointment of cryptocurrency-friendly staff to the cabinet, including the famous Silicon Valley investor David Sachs as the White House's cryptocurrency czar, has also made investors optimistic about the future of the industry.
Epstein, Head of Trading and Structured Products at Moneycorp, said in an interview: "We have experienced cyclical bull markets in cryptocurrencies before, but I remember this is the first time there has been hype at the government level. So far, there have been a lot of statements, but in terms of acceptance, this is still the biggest progress the cryptocurrency industry has ever made."
Strategic Bitcoin Reserves
President Trump's election victory triggered a massive rebound, becoming a key catalyst for bullish activity and pushing Bitcoin to a historic high of $109,000 on the day of the inauguration.
The United States is now the largest sovereign holder of Bitcoin, mainly due to judicial seizures. According to Bitbo's data, the country holds over 200,000 Bitcoins, equivalent to nearly $22 billion.
But Epstein said, the cryptocurrency market's trading is based on the expectation that the US will make large-scale purchases in the future. During the campaign, Trump proposed the idea of establishing a strategic Bitcoin reserve for the country, similar to El Salvador's recent moves.
Supporters, including MicroStrategy CEO Michael Saylor, Tether, and other major institutional participants, have expressed appreciation for this idea, advocating for the US and other countries to accumulate Bitcoin as a means of avoiding inflation.
Coinbase CEO Brian Armstrong wrote in an article on January 17, "In 2024, when people elect Donald Trump, the masses will vote for more economic freedom."
"The next global arms race will be in the digital economy, not in space. Bitcoin may become the foundation of the global economy, just like gold."
While such a move would undoubtedly benefit Bitcoin, it is currently unclear whether Trump will ultimately take action.
According to Epstein, the behavior of large-scale cryptocurrency purchases by various levels of the US government has already been factored into the price, and if the expectations are not met, it may revert. "Unless some state-level plan really starts to be implemented, I find it hard to see the market going up," he said. "I expect this will be led by the Treasury Department."
"Mined, Minted, and Manufactured in America"
Trump has reiterated his interest in cryptocurrencies during his 2024 presidential campaign, emphasizing that the industry is a priority for his second term. He also hinted that he might introduce US regulations to provide clarity for the industry.
"If cryptocurrency is to define the future, I hope it will be mined, minted, and manufactured in America," he said last year. "America should build the future, not hold it back."
The Trump administration's crypto-friendly appointments suggest a stark contrast with the policies of the previous administration, during which the US Securities and Exchange Commission (SEC) cracked down on the industry. Although Trump has not yet detailed Sachs' responsibilities as the crypto czar, this choice indicates that his stance on AI and cryptocurrencies may be quite optimistic.
In fact, Trump's return to the White House has already energized many in the crypto realm.
"President Trump's return to the White House is really a good thing for us," said Stacy Herbert, head of the National Bitcoin Office of El Salvador, one of the few jurisdictions that have already developed its own regulations for the industry.
"The US is a $30 trillion economy. So if so much capital flows into this field, you have to be prepared for a bright future."
Analysts Call for Caution on Cryptocurrencies
However, experts warn that there are still many areas of concern and call for caution when it comes to the frenzy of cryptocurrency purchases.
On January 17, the then President-elect launched his own memecoin TRUMP, which caused a stir in the cryptocurrency world, with the coin seeing record-high demand and creating billions of dollars in market capitalization out of thin air.
"Let's be clear: this is more gambling than investing," Nigel Green, CEO of the deVere Group in the UAE, said in a press release.
He stated that Trump's presidency is expected to usher in an era of supportive cryptocurrency policies, which may pave the way for the legitimate growth of mature assets like Bitcoin, but also "raises questions about the risks of speculative trading driven by social media hype."
