Since President Trump’s election in November, the worth of bitcoin has skyrocketed. On Election Day 2024, one bitcoin traded beneath $75,000. Final week, bitcoin reached an all-time excessive of over $123,000. (On Monday, it hovered round $118,000.)
This isn’t an accident. Trump has systematically used the facility of the presidency to promote bitcoin and different cryptocurrencies.
On Monday, Trump Media & Know-how Group (TMTG), a publicly traded firm majority-owned by Trump, introduced that it had acquired $2 billion in bitcoin. Trump is popping a failing media firm right into a bitcoin holding firm. TMTG, the mother or father firm of Truth Social, misplaced over $185 million on simply $3.6 million in income in 2024.
TMTG is mimicking a method pioneered by Microstrategy. The corporate, now often called Technique, formally sells software program and different know-how companies, however it’s actually within the enterprise of shopping for bitcoin. (Technique and comparable bitcoin-focused corporations are valued far above their precise bitcoin holdings, for reasons that aren’t entirely clear.)
If the worth of bitcoin continues to rise, the transfer might repay handsomely for TMTG and Trump. The distinction is that TMTG doesn’t simply have to hope bitcoin costs rise. Trump has the authority to take actions that may drive the worth of bitcoin increased. If current historical past is any information, that’s precisely what Trump will do.
On January 23, shortly after taking workplace, Trump signed a pro-crypto executive order, Strengthening American Management in Digital Monetary Know-how, signaling sturdy assist for the crypto trade. Trump’s government order repealed a 2022 executive order by former President Joe Biden, which included quite a lot of provisions to “defend customers, traders, and companies” from monetary dangers. Trump’s government order underscored that “particular person residents and private-sector entities” had a proper to use “open public blockchain networks with out persecution.” Underneath Biden, the Securities and Change Fee (SEC) had investigated and charged crypto buying and selling platforms and others for advertising unregulated securities to Individuals. It additionally established the “President’s Working Group on Digital Asset Markets,” chaired by David Sacks, a enterprise capitalist and crypto investor who joined the White Home as a particular advisor. In different phrases, the world was on discover that extra excellent news for the crypto trade was forthcoming.
It got here on March 6, when Trump signed an government order establishing a “Strategic Bitcoin Reserve and U.S. Digital Asset Stockpile.” The federal authorities was moving into the enterprise of buying and holding bitcoin and different cryptocurrency property. It’s unclear how the American public advantages from the creation of such a stockpile. However the announcement was a boon to bitcoin traders. Their property now had the imprimatur of the world’s largest economic system.
On April 9, the Senate confirmed Paul Atkins, Trump’s choose to chair the SEC. Atkins was a member of the SEC in the course of the George W. Bush administration. After leaving that place, he turned CEO of a consulting agency the place he advised numerous clients in the crypto industry. He additionally served as co-chair of the Token Alliance, a crypto trade lobbying group. After taking workplace, Atkins introduced he would “accommodate the crypto industry” and set up a “rational regulatory framework.” He bemoaned that the crypto trade “has been stifled for the last several years” due to the enforcement of securities legal guidelines. He shortly dropped several SEC lawsuits in opposition to main gamers within the crypto trade, together with a long-running lawsuit in opposition to the crypto fee community Ripple.
Most just lately, on July 18, Trump signed the GENIUS Act, the primary main piece of laws to regulate the cryptocurrency trade. The brand new regulation, largely written by crypto lobbyists, units requirements for stablecoins — cryptocurrency tokens pegged to the worth of a authorities foreign money, such because the U.S. greenback. Bitcoin shouldn’t be a stablecoin, however stablecoins are used to facilitate many crypto transactions. The GENIUS Act, by legitimizing stablecoins, units the stage for wider adoption of crypto general, together with bitcoin. Trump additionally has a big monetary curiosity in a crypto firm, World Liberty Monetary, which just lately launched its own stablecoin, often called USD1. Main banks may follow suit.
This might all simply be the start. Trump is contemplating a bunch of different strikes to additional enhance bitcoin’s worth, together with allowing 401(k) retirement plans to invest in bitcoin, eliminating or reducing capital gains taxes on crypto, directing the Federal Reserve to maintain Bitcoin as a part of its international foreign money reserves, and shifting most regulation of bitcoin and different cryptocurrencies from the SEC to the more permissive Commodity Futures Buying and selling Fee.
The widespread adoption of cryptocurrencies, that are extremely unstable and have little sensible utility, poses a danger for the American economic system. When FTX collapsed, the broader impacts have been restricted as a result of FTX had comparatively few connections to the broader financial system.
Trump seems much less involved with these dangers than merely pumping up the worth of bitcoin. And now he has one other automobile to revenue from his future pro-bitcoin coverage strikes.
Trump has not all the time been an ally to the crypto trade, famously calling bitcoin a “scam” in 2021. However an intense lobbying marketing campaign in the course of the run-up to his re-election modified Trump’s thoughts, and the payoffs for the trade and his marketing campaign have been large.
Trump’s first foray into the crypto trade was pushed by a former enterprise accomplice, Invoice Zanker. In 2022, Zanker satisfied Trump to promote non-fungible tokens (NFTs), which make the most of the identical know-how as crypto, together with his likeness — primarily $99 digital Trump baseball playing cards. The NFTs sold out virtually instantly, and Trump made thousands and thousands.
The crypto trade’s courtship of Trump started in earnest at first of 2024, according to the New York Times. Crypto government David Bailey led the cost, exhibiting Trump how the worth of Bitcoin had grown throughout his first time period and convincing him that crypto supporters could possibly be tapped as voters and donors. Quickly after, Trump gave a speech attacking Democrats like Biden and Senator Elizabeth Warren (D-MA) for supporting regulation of the crypto trade. Just a few months later, Bailey organized for Trump to be the keynote speaker at Bitcoin’s annual convention, the place he first introduced his assist for a nationwide Bitcoin reserve.
Trump’s embrace of crypto supplied a large fundraising enhance. The New York Occasions reported that Bailey raised $30 million for the Trump marketing campaign from fellow crypto executives. Sacks additionally hosted a multimillion-dollar fundraiser with San Francisco tech executives. Main crypto traders like Marc Andreessen, Ben Horowitz, and Tyler and Cameron Winklevoss donated millions of {dollars} to numerous pro-Trump tremendous PACs. In complete, the crypto trade accounted for over half of all company cash within the 2024 election throughout federal races, elevating $245 million.
The Trump marketing campaign additionally accepted thousands and thousands of {dollars} in donations within the type of cryptocurrency. In October, the Trump 47 joint fundraising committee reported $7.5 million in crypto donations. Bailey contributed practically $500,000 in bitcoin, including to the committee’s $5 million bitcoin stockpile and $1.5 million in Ether.
After Trump received re-election, money from the crypto trade continued to pour in. Ripple donated $5 million to Trump’s inauguration committee, the second largest sum from a single donor. Crypto exchanges Coinbase and Kraken every donated $1 million, as did Circle, a stablecoin firm which sells tokens based mostly on the U.S. greenback’s worth. Moreover, Bailey hosted a sold-out inauguration occasion sponsored by a number of different crypto corporations.
The monetary conflicts within the White Home transcend Trump. Sacks, Trump’s crypto czar, is continuous to work as a partner at Craft Ventures, a enterprise capital agency co-founded by Sacks that has investments in crypto corporations.
A memo launched by the White Home in March states that Sacks and Craft Ventures divested over $200 million in digital-asset associated investments. Nonetheless, the memo additionally states that Craft Ventures continues to maintain “personal fairness of digital asset-related corporations which might be extremely illiquid and thus not simply divested.” On the time of the memo, Sacks additionally had a direct curiosity in a enterprise capital investing platform “that will presently have some minor digital asset trade holdings or would possibly sooner or later.”
Usually, authorities staff are topic to battle of curiosity legal guidelines. However the White Home has issued multiple waivers to enable Sacks to work within the Trump administration whereas sustaining his investments. The primary waiver, launched within the March memo, permits Sacks “to take part as a particular authorities worker in sure explicit issues concerning regulation and coverage associated to the digital asset trade, together with cryptocurrency.”
The White Home memo acknowledges that Sacks’ work within the Trump administration might have an effect on his investments, however argues that his private monetary curiosity is “not so substantial as to be deemed seemingly to have an effect on the integrity of [his] companies.”
The White Home has not launched Sacks monetary disclosures, so Sacks’ precise crypto investments and conflicts will not be publicly recognized. Sacks is required to file a monetary disclosure, but it surely doesn’t have to be launched publicly “until [he begins] drawing a considerable authorities wage,” NBC reported. Sacks’ work as a part-time “particular authorities worker” was reportedly designed particularly in order that Sacks might stay at Craft Ventures.
In Might, Warren, rating member of the Senate Banking Committee, wrote a letter to the U.S. Workplace of Authorities Ethics asking for Sacks’ monetary disclosures to be launched publicly. “Sacks concurrently leads a agency invested in crypto whereas guiding the nation’s crypto coverage,” Warren wrote in a press release. “Usually, federal regulation would prohibit such an specific battle of curiosity.”
