Trump Went All In On Crypto, What Comes Next?

As Trump takes office, his executive orders could significantly influence the crypto market. Analysts predict a potential mania stage in the ongoing bull run, with certain altcoins presenting opportunities while others remain highly volatile. Over the next 1 to 3 months, short-term strategies will be crucial for navigating this dynamic period. Looking further ahead into Trump's administration, questions arise about whether his policies will foster long-term growth or challenges for cryptocurrency adoption in the U.S.

Trump's Entry into Crypto with Meme Coins Donald Trump has entered the crypto world by launching his official meme coin, "Official Trump," which reached an $8 billion market cap within days. His wife Melania also introduced her own meme coin, though it appears to be a short-term venture compared to Trump's more significant impact. The global recognition of the 'Trump' name makes this one of the most viral coins ever created, surpassing even Dogecoin in cultural reach and influence.

Challenges and Opportunities for Mainstream Adoption The launch of these coins on Solana presents onboarding challenges for mainstream users unfamiliar with decentralized exchanges or wallets like Phantom Wallet. This situation mirrors past phenomena such as Dogecoin’s rise in 2021 when non-crypto enthusiasts sought ways to participate despite technical barriers. While adoption takes time, these developments highlight how influential figures can drive interest toward blockchain ecosystems.

Ethical Concerns and Future Implications There are constitutional restrictions preventing presidents from using their office for personal enrichment through ventures like cryptocurrency launches post-inauguration. Rumors about additional Trump-related tokens should be approached cautiously due to potential scams exploiting his brand without direct association or legitimacy. Officially launched projects include only "Official Trump" and "Melania Coin," while other rumored initiatives lack credibility under current legal frameworks.

Trump's inauguration speech did not mention cryptocurrency, but this does not rule out the possibility of executive orders related to Bitcoin or other digital assets. Historically, major events like a Bitcoin ETF approval cause significant market volatility; thus, caution is advised against leverage trading during such times. The absence of crypto-related announcements in his initial address doesn't preclude future actions once he assumes office.

The US government already holds over 200,000 Bitcoins from seizures, making it the largest national holder of Bitcoin. Recognizing these holdings as a "Strategic Bitcoin Reserve" would require minimal effort and could enable official actions like passing laws or borrowing against them. However, implementing a law to purchase additional Bitcoins annually—such as acquiring 200,000 per year for five years—is unlikely due to budget constraints and taxpayer resistance. While formal recognition of existing reserves is feasible under an executive order by Trump or others in power, expanding those reserves through new purchases faces significant financial hurdles.

The SEC is undergoing significant changes with the appointment of a new pro-crypto chairman, Paul Atkins, replacing Gary Gensler. Key priorities include withdrawing rule 3b-6 to enable US residents unrestricted access to DeFi platforms like Uniswap for on-chain swaps and lending. Efforts are also underway to halt de-banking practices targeting crypto companies, improving their banking access in the US. Additionally, there’s momentum behind passing the "Fifth for 21st Century Act," which will clarify regulatory oversight between altcoins governed by either the SEC or CFTC. Lastly, potential executive actions could revive staking within ETFs if more pro-crypto commissioners join under this leadership.

The US government is likely to implement tax reductions for crypto companies, particularly focusing on capital gains taxes. This move aims to boost innovation in the domestic tech sector without additional spending while increasing local job numbers. Three potential executive actions include establishing a Bitcoin strategic reserve, revising SEC rules to support DeFi and staking activities, and reducing tax burdens for US-based crypto firms.

The possibility of Trump implementing significant crypto policies, such as adding Bitcoin or altcoins like Ethereum and Solana to the U.S. strategic reserve, is highly unlikely due to taxpayer resistance. Instead, he may focus on supporting U.S.-based crypto companies by improving banking access and reducing regulatory pressures without directly investing in cryptocurrencies using public funds. In the short term, investments in Bitcoin (due to its status), Ethereum (with staking benefits), and Solana (linked with his meme coins) are seen as promising opportunities for growth.

Bitcoin is expected to rise in the next three months, influenced by macroeconomic factors. The Federal Reserve’s delayed money printing and quantitative easing, due to political dynamics opposing Trump, have kept recent FOMC meetings subdued. However, with Trump's return to office potentially shifting policies, upcoming FOMC meetings on January 29th and March 18th could increase demand for rising assets like Bitcoin. Holding Bitcoin remains a straightforward strategy unless actively trading.

The next three months present a promising period for Ethereum, driven by factors like the Federal Reserve’s impending quantitative easing cycle and its historically strong seasonality in early-year performance. Significant institutional interest is evident with substantial Ethereum ETF inflows following Trump’s presidency confirmation, alongside notable acquisitions by entities linked to the Trump family. Regulatory developments around DeFi protocols and staking further bolster optimism for Ethereum's growth potential during this timeframe. However, historical trends suggest caution as May often marks a correction phase within bullish cycles.

Recent developments indicate Trump's increasing focus on Solana. The appointment of David Sacks, a prominent Silicon Valley venture capitalist and major investor in Multicoin (a key backer of Solana), as the White House crypto and AI advisor signals this shift. Unlike Ethereum, which is seen as more established, Trump appears to favor emerging platforms like Solana for their startup potential. Additionally, rumors suggest plans for an 'America First' strategic reserve involving altcoins such as Solana.

Speculation about a U.S.-based cryptocurrency reserve prioritizing coins like Solana, USDC, and XRP appears unfounded. No official statements from the Trump family support this idea. However, Trump's actions suggest he is pro-Solana—not by adding it to balance sheets but through active usage of its infrastructure. The launch of Millennia and Trump coins on-chain via decentralized platforms has driven unprecedented activity on Solana’s network.

Potential Growth of Altcoin ETFs and Market Dynamics Altcoin ETFs, including Solana and XRP, are expected to gain approval this year but may not see immediate inflows until Ethereum ETF adoption increases. Bitcoin, Ethereum, and Solana could benefit significantly in the short term due to broader market dynamics. Key altcoins likely to receive ETF approvals include Litecoin, Hedera (HBAR), Solana, and XRP—especially those recognized as decentralized by regulatory bodies like the SEC.

Long-Term Macro Effects on Crypto Under Trump Administration In the long-term perspective under a potential Trump administration return or similar macro influences over 1-4 years ahead: direct executive orders cannot drastically alter crypto markets such as massive government purchases of Bitcoin being unrealistic; instead focus shifts towards Federal Reserve & Treasury policies shaping economic conditions indirectly affecting cryptocurrency trends overall stability globally remains key determinant factors beyond political noise alone.

The Federal Reserve has been postponing its decision to pivot towards printing more money and supporting the US bond market through quantitative easing. Despite hints in May, no action has occurred as of January, with key dates like January 28-29 and March 18-19 being critical for potential announcements. The Fed’s balance sheet continues to decrease, signaling ongoing quantitative tightening where assets are sold rather than purchased. A reversal is inevitable to prevent a government debt default by injecting liquidity into financial markets.

Impact of Dollar Strength on Bitcoin and Crypto The strength of the US dollar, measured by the DXY index, has a significant inverse correlation with Bitcoin's value due to its global trading against USD. A strong dollar typically weakens crypto markets as it reduces risk-on asset appeal like Bitcoin. Unlike stocks traded in local currencies globally, cryptocurrencies predominantly trade against USD or USDT across exchanges worldwide.

Trump Administration’s Potential Dollar Policy Shift While public sentiment favors a strong dollar for national pride and reserve currency status, economic realities suggest Trump may pursue a weaker dollar policy under new Treasury Secretary Scott Bessent. Weakening the domestic currency could boost exports while reducing imports—aligning with Trump's goals to bring manufacturing jobs back onshore. This potential shift would be bullish for Bitcoin; tracking speeches from Bessent and movements in DXY will provide insights into this critical macroeconomic factor affecting crypto markets.

Navigating Short to Medium-Term Crypto Strategies In the short term, avoid leverage trading due to market volatility and hold Bitcoin, Ethereum, and Solana as they are poised for growth. Trump-related meme coins carry high risk but may offer speculative opportunities. Over the next three months, these major cryptocurrencies will likely benefit from developments such as a potential Bitcoin strategic reserve announcement and increased adoption of Ethereum by Trump's family alongside favorable SEC regulations supporting DeFi initiatives.

Long-Term Macro Factors Influencing Crypto Markets Key long-term factors include Federal Reserve policies on asset purchases and balance sheet adjustments during upcoming FOMC meetings. The strength or devaluation of the US dollar under new Treasury leadership will significantly impact crypto markets; a weaker dollar could boost Bitcoin's value while a stronger one might hinder it. Monitoring indicators like Federal Reserve statements, balance sheets on TradingView charts, Scott Besson’s stance on monetary policy decisions regarding USD valuation is crucial for understanding future trends in this bull run.