The price of Bitcoin and the broader crypto market rose after the election victory of Donald Trump in November, with the rally gaining new momentum in the days before his inauguration on January 20.
Crypto enthusiasts are largely sold on Trump's image as the message of the industry, reinforced by his own role as a supporter of pro-crypto policies. But are these hopes based on reality, or is the market held up in make believe?
During his stirring speech in Nashville last July, Trump made bold promises to turn the US into the crypto capital of the world. To support this view, he confirmed the establishment of a resolution Strategic Bitcoin Reserve (SBR).
“We're going to do something good with crypto because we don't want China or anybody else to get ahead,” Trump said CNBC last month.
Now, as initial signs of rising inflation fuel fears of an economic crisis, Trump is expected to issue several crypto-related executive orders upon his return to the White House. The incoming administration has already announced plans to loosen regulations, establish a Crypto Presidential Advisory Council – reportedly including around 20 CEOs and founders with strong ties to Trump – to give business a voice in government, to revoke restrictive policies such as SAB 121and the position of the US as the global center of Bitcoin mining.
Crypto endings
Trump appointed venture capitalist and podcast host David Sacks as the country's first artificial intelligence and crypto czar.
As part of the weekend's kick-off celebration, Sacks hosted a crypto ball at the Andrew W. Mellon Auditorium in Washington, DC, on January 17. The event was co-hosted by BTC Inc., Stand With Crypto, Exodus, Anchorage Digital, and Kraken. Sponsors included MicroStrategy, MetaMask, Coinbase, Solana, Galaxy Digital, Kraken, and others.
According to the New York Post, the president-elect report considering an 'America-first' crypto reserve strategy that would include Bitcoin as well as US-founded digital assets such as XRP and Solana.
Whether Trump's own meme base (TRUMP), now with a market cap of about $13 billion, is included in that reserve.
The Solana-based meme coin is currently $21, according to data from CoinGecko. The coin ended with 200 million tokens in circulation out of a total supply of 1 billion, with the remaining supply to be released gradually over the next three years.
It reached a high of $73.43 and is currently hovering around $66 at the time of writing.
Based on data from the analytics company Arkham, the US government currently has nearly $20 billion worth of Bitcoin, seized in various law enforcement actions. This portfolio includes 198,109 BTC, worth approximately $20.63 billion, along with other digital assets such as 54,753 ETH ($189.03 million), 122.13 million USDT ($122.13 million), and 750.722 WBTC ($ 77.77 million).
Current government ownership also features Binance Coin (BNB), Ghost (GHOST), USD coin (USDC), and others.
Analyzing the possible impact of these developments on the cryptocurrency market, it is reasonable to expect that the market will continue to grow.
The creation of a crypto reserve indicates strong government support for Bitcoin as a store of value and a strategic asset. As with previous institutional adoption events, such a move could increase Bitcoin demand, and reduce market supply. As a result, it could start a global domino effect, with more governments adopting similar strategies and increasing demand.
Speaking of precise price targets, the price of Bitcoin could experience a rally similar to previous institutional adoption events, with the potential to reach $120,000 – $150,000 within six to 12 months, depending on market sentiment and macro factors – economic.
Prioritizing US based assets like XRP and Solana could allow these crypto projects to be adopted on a global scale. XRP and Solana could rally 30–50% in the short term, depending on the details of the strategy. As for the decision to launch the TRUMP meme coin just days before the inauguration, it appears to be a strategic move aimed at reinforcing Trump's pro-crypto stance and a sense of euphoria among his supporters.
Perhaps a result that will not be overlooked is the government stepping into areas that were traditionally outside of its purview. Although framed as deregulation, top-down crypto policies are inherently regulated, which contrasts with the core decentralization values ​​of the crypto community.
Also, if deregulation is indeed the goal, how will consumer protection be ensured? Striking this balance is a Herculean task. From my experience leading Outset PR, I've seen firsthand how even well-intentioned policies can create friction between innovation and direction. In addition, political promises often stall or face roadblocks before they come to fruition. If these initiatives are not implemented effectively, the market response can be lukewarm.
Closing remarks
Enthusiasts of the crypto market have reason to be excited – the proposed policies could significantly increase adoption and valuation.
The government has long been Crypto's biggest obstacle, but if alignment between policymakers and the industry can be achieved, the potential for growth is very promising.
However, as always in the crypto market, performance and external factors will ultimately determine the size and sustainability of this growth.
