The United States is ready to usher in a new era with the Jan. 20 inauguration of Donald Trump as the 47th president. The ceremony marks Trump’s triumphant return to the White House after a four-year hiatus during former President Joe Biden’s administration, and it is already massively lifting spirits and prices across the cryptocurrency market.
Trump’s return aligned with Bitcoin (BTC) price soaring to new highs as anticipation builds for an industry-friendly approach to emerging technologies. Trump’s appointments of crypto-friendly staff to his cabinet, including prominent Silicon Valley investor David Sacks as White House Crypto Czar also has investors feeling optimistic for the future of the industry.
In an interview with Cointelegraph, Eugene Epstein, the head of trading and structured products at Moneycorp, said,
“We have had bull runs in crypto before in a cyclical fashion, but of all times I can remember, this is the first time where the hype is actually at the government level. There has just been a lot of rhetoric so far, and still, it is simply the furthest that crypto has ever come in terms of being accepted.”
A strategic Bitcoin reserve
President Trump’s election victory ignited a massive rally, serving as a key catalyst for bullish activity and driving Bitcoin to surpass an all-time high of $109,000 on inauguration day.
The US is already the largest sovereign holder of Bitcoin, mostly due to judicial seizures. According to data from Bitbo, the country holds over 200,000 Bitcoin in custody—equivalent to nearly $22 billion.
But crypto markets are trading on the expectation that the US will unload massive purchases going forward, Epstein said. During the campaign, Trump floated the idea of building a strategic Bitcoin reserve for the country, akin to El Salvador’s initiative in recent years.
Supporters, including MicroStrategy´s CEO Michael Saylor, Tether, and other major institutional players, have praised this idea, advocating for the US and other countries to accumulate Bitcoin as a means to stave off inflation.
“Masses showed up and voted for more economic freedom in 2024 when they elected Donald Trump,” Coinbase CEO Brian Armstrong wrote in a Jan. 17 post.
“The next global arms race will be in the digital economy, not space. Bitcoin could be as foundational to the global economy as gold.”
While such a move would certainly bode well for Bitcoin, it remains unclear so far whether Trump will eventually pull the trigger.
According to Epstein, a large-scale purchase of crypto by any level of the US government has already been priced in and could revert if expectations are not met. “I have a hard time seeing markets moving higher unless some sort of state-level plan actually begins,” he said. “And I would expect this to be led by the Treasury.”
“Mined, minted and made in the USA”
Trump has shown a renewed interest in cryptocurrencies during his 2024 presidential campaign, highlighting the sector as a priority for his second term. He has also hinted at the possibility of introducing US regulations to provide clarity for the industry.
“If crypto is going to define the future, I want (it) to be mined, minted and made in the USA,” he said last year.“ America should build the future, not block it.”
The crypto-friendly appointments across Trump’s administration hint at a dramatic departure from the policies of the previous administration, during which the Securities and Exchange Commission (SEC) pursued a sweeping crackdown on the industry. Although Trump has yet to detail the responsibilities of Sacks as Crypto Czar, the choice signals a likely bullish stance on both AI and cryptocurrency.
Related: US Bitcoin reserve has pundits in tailspin as Trump inauguration looms
Indeed, Trump’s return to the White House has already cheered up many in the crypto space.
“President Trump in the White House is really good for us,” Stacy Herbert, who leads El Salvador’s National Bitcoin Office, said to Cointelegraph. The country is one of the few jurisdictions that already has its own regulations for the sector.
“The US is a $30 trillion economy. So if that amount of capital flows into the space, then you definitely have to be prepared for the good times ahead.”
Analysts are calling for caution in crypto
Still, experts warn that there is still much to be seen, urging for caution amid a buying frenzy in the space.
On Jan. 17., the then-US president-elect made waves in the crypto world by launching his own memecoin, TRUMP, which saw record demand in no time and created a market cap worth billions out of thin air.
“Let’s be very clear: this is more gambling than investing,” Nigel Green, CEO of UAE-based deVere Group, said in a press release.
Trump’s presidency is expected to usher in an era of pro-crypto policies, he said, and while this could pave the way for legitimate growth for established assets like Bitcoin, it also “raises questions about the risks of speculative trading driven by social media hype.”
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.