Trump’s Victory: The Impact on Crypto Explained
Preliminary U.S. election results highlight Donald Trump’s victory. Let’s revisit his key campaign promises to evaluate their potential impact on the crypto industry.
In his election campaign, Trump pledged a series of important measures for the crypto community. Many of these were articulated at Bitcoin 2024, one of the largest gatherings in the crypto world.
Among his commitments was the immediate dismissal of SEC Chairman Gary Gensler upon assuming office. Trump also emphasized his plans to boost Bitcoin mining in the U.S., establish a BTC strategic reserve, and oppose the introduction of a CBDC.
The champion of making America great again also indicated his willingness to ease the life sentence of Ross Ulbricht, the creator of the anonymous marketplace Silk Road.
Gary Gensler: The Man Crypto Wants Fired
At the Bitcoin 2024 conference in Nashville, U.S. presidential hopeful Donald Trump stated his intentions to immediately dismiss SEC Chairman Gary Gensler. For background, Gensler took up the role during President Biden’s term in 2021.
To many, Gensler has become the era’s antihero: rather than promoting a crypto-friendly environment that encourages integration with traditional industries, his actions have kept that goal at arm’s length.
Gensler’s time in office has been marked by numerous lawsuits against crypto firms and major exchanges, including Coinbase, Kraken, Genesis Global Capital, Gemini Trust Co., and Ripple.
It’s no wonder Trump’s announcement stirred such a positive reaction among the conference audience.
Can Trump Actually Fire Gary Gensler?
In U.S. history, no SEC chair has been dismissed by a new president; they either stay in their role or resign voluntarily. Often, resignation occurs before elections when a chair expects to be replaced.
“When a new party takes over the presidency, traditionally the chair resigns right on or before inauguration hour,” said Andrew Vollmer, former deputy general counsel of the SEC.
Mary Jo White, the SEC chair under Obama, resigned on January 20, 2017, as Trump was sworn in. Jay Clayton, Trump’s SEC appointee, followed suit, leaving his post on December 23, 2020, before Biden’s term began.
Whether Gensler will step down willingly is still unclear. If not, dismissing him could pose a challenge since there’s no defined legal precedent for such a presidential move.
Some believe that an alternative route could be for Gensler to remain as one of the SEC commissioners, allowing Trump to appoint a new chair and shifting Gensler to one of the five commissioner roles.
Emergence of New Crypto ETFs
Leadership shifts at the SEC could reduce regulatory pressure on the crypto sector and open doors for new crypto ETFs. Under Trump, the market might see approvals for ETFs like Solana-ETF and Ripple-ETF.
Daniel Cheung, co-founder of hedge fund Syncracy Capital, shared this perspective on X. He suggested that a Solana-ETF could be approved as early as the first quarter of 2025. Chung also mentioned potential ETF approvals for altcoins like the AI project Bittensor (TAO).
If a Solana-ETF gains approval, Cheung foresees SOL potentially reaching $1,000. He also predicts a BTC value of $250,000 if the concept of a strategic BTC reserve for the U.S. Treasury is executed.
Trump's Promise of Clemency for Ross Ulbricht
Ross Ulbricht, a notable programmer, was convicted for facilitating drug transactions and money laundering through his 2011-founded darknet marketplace, Silk Road. This platform enabled transactions involving illegal goods, including drugs and weapons, in BTC.
At the Nashville conference, Trump committed to reducing Ulbricht’s sentence if he is elected president. Currently, Ulbricht serves a life sentence without parole, having spent 11 years in prison.
This pledge seems targeted at strengthening Trump’s standing within the crypto community, where the #FreeRoss movement advocating for clemency has deep roots. His statement resonated particularly well among early contributors to the Bitcoin ecosystem.
Trump could potentially commute the sentence to time already served or modify it to make the punishment less severe than life imprisonment.
Trump’s Vision of a National BTC Reserve
One of Trump’s noteworthy crypto promises includes the creation of a strategic BTC reserve, focusing on storing bitcoins seized by U.S. law enforcement. Presently, the U.S. holds approximately 210,000 BTC.
And so, as the final part of my plan today, I am announcing that if I am elected, it will be the policy of my administration … to keep 100% of all the bitcoin the U.S. government currently holds or acquires into the future ... This will serve, in effect, as the core of the strategic national bitcoin stockpile,Trump revealed during Bitcoin 2024.
The specifics of how this plan might be executed—or if it will be enacted—are not yet known. However, there is an existing legislative draft by Cynthia Lummis, a prominent crypto supporter, unveiled at the same Bitcoin 2024 event.
The proposal requires the U.S. government to keep its BTC holdings and continue purchasing more until they surpass 1 million BTC, with a 20-year holding period to be used solely for managing public debt.
This would transform BTC from a once-controversial asset into a strategic reserve akin to gold, underscoring its new role in the financial strategy of the U.S.
Sounds compelling. But is it plausible?
Skeptics say no.
They point out that the government cannot simply appropriate seized BTC for debt repayment. These funds still belong to their rightful victims, who should be found and compensated to uphold justice.
Critics also warn that maintaining a BTC reserve could backfire on its value. If, two decades from now, the U.S. opts to sell 1 million BTC to settle national debt, it could trigger significant downward pressure on BTC’s market price.
Finally, what’s the rationale behind a BTC reserve for the U.S.? The Strategic Petroleum Reserve (SPR), for instance, is used to balance the market when oil prices surge or supply diminishes, serving as a safety net against an energy crisis.
Why would Bitcoin be needed in the same way? So far, neither Trump nor other politicians have clearly addressed this question.
Still, holding BTC might be part of a subtle stance against China. As the U.S. vies for crypto leadership, possessing BTC reserves could be an essential component of that strategy.
No Room for CBDCs
Trump has made it clear: there will be no development of a central bank digital currency (CBDC) or state-run blockchain payment system under his watch. Such networks, unlike decentralized crypto, are under full government control.
The topic of CBDCs has split the crypto community. Some view them as an innovative update to aging banking systems; others warn they could compromise privacy.
Trump’s assurance that an official U.S. digital dollar won’t be created has been received positively by a significant part of the crypto world.
Backing BTC Mining in America
Trump has voiced his intention to bolster Bitcoin mining domestically, stating his ambition for all future bitcoins to be mined within the United States. This initiative appears to tie into his larger vision of establishing crypto supremacy and countering China's foothold in the sector.
Details on how this would be accomplished remain vague, but many in the crypto space saw it as a step forward. Samson Mow, CEO of Jan3, commented on June 13 that Trump's pro-mining agenda could provide a boost to the industry.
Yet, not everyone shared this enthusiasm.
Laura Shin, CEO of crypto media outlet and podcast Unchained, highlighted the potential downsides of BTC concentration in the U.S. She argued this could create jurisdictional vulnerabilities and threaten Bitcoin's decentralization.
Bitcoin mining's environmental impact is another challenge, often drawing criticism for its carbon footprint. Should Trump pursue his plan, it could trigger a backlash from environmental groups.
If such opposition arises, Trump might be compelled to introduce mining regulations—restricting power usage or limiting CO2 emissions—potentially impacting the BTC mining sector negatively.
Expanding Pro-Crypto Political Presence and Reassessing Crypto Crime Penalties
Dismissing Gary Gensler might only be the first of Trump’s personnel changes. The former president has plans to form a dedicated Bitcoin council tasked with creating and pushing pro-crypto legislation in Congress.
Trump’s administration could also propose modifications to the legal system that might lead to lighter punishments for debatable crypto offenses.
Roman Storm, co-founder of Tornado Cash, is a prominent example. His trial, initially scheduled, has been moved to April 2025.
Roman Storm (second from the right) with his legal counsel outside a New York courthouse. Source: coindesk.com
To summarize, Storm has been charged with three offenses: conspiracy to launder money, running an unlicensed money transfer service, and breaching sanctions, facing up to 45 years in prison.
Trump’s Promises: What’s the Real Outcome for Crypto?
Trump's pledges to back Bitcoin mining, push back against the introduction of a digital dollar, and reduce regulation have been welcomed by the crypto community as a promising shift toward a more accommodating digital asset ecosystem.
Yet, it’s important to remember that translating words into action requires more than campaign speeches. Real progress will depend on strategic political maneuvers, their effective execution, and the response of other regulatory institutions. Despite his ambitious vision, the question remains: can Trump achieve lasting support for crypto, and what will be the global ramifications?
For now, the answer remains uncertain. Only time will tell!
