Will Trump’s Inauguration Spark an Unexpected Cryptocurrency Market?

The price of Bitcoin and the broader cryptocurrency market rose following Donald Trump’s election victory in November, with the rally gaining new momentum in the days leading up to his inauguration on January 20.

Cryptocurrency enthusiasts rely largely on Trump’s image as the industry’s messiah, buoyed by his self-proclaimed role as a champion of pro-cryptocurrency policies. But are these hopes based on reality, or is the market stuck in an illusion?

During his rousing speech in Nashville last July, Trump said Make bold promises To turn the United States into the crypto capital of the world. To support this vision, he confirmed his intention to establish it Strategic Bitcoin Reserve (SBR).

“We’re going to do something great with crypto because we don’t want China or anyone else to get ahead of themselves,” Trump said. CNBC last month.

Now, as initial signs of rising inflation raise fears of an economic crisis, Trump is expected to issue several cryptocurrency-related executive orders upon his return to the White House. The incoming administration has already announced plans to ease regulations, create a Presidential Cryptocurrency Advisory Council — including about 20 CEOs and founders with strong ties to Trump — to give the industry a voice in government, and rescind restrictive policies such as… Saab 121and positioning the United States as a global hub for Bitcoin mining.

Crypto friends

Trump specific Venture capitalist and podcast host David Sachs as the country’s first AI and cryptocurrency leader.

As part of the inauguration weekend celebration, Sachs hosted a cryptocurrency dance party at the Andrew W. Mellon Auditorium in Washington, D.C., 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 is It is said to look An “America First” cryptocurrency reserve strategy that will include Bitcoin as well as US-founded digital assets such as XRP and Solana.

Whether Trump’s own coin (Trump), which now has a market capitalization of about $13 billion, will be included in this reserve.

The Solana-based meme coin is currently worth $21, according to data from CoinGecko. The coin debuted with 200 million tokens in circulation out of a total supply of 1 billion, with the remaining supply scheduled to be released gradually over the next three years.

It reached a high of $73.43 and is currently hovering at around $66 at the time of writing.

Based on data from analytics firm Arkham, the US government currently holds approximately $20 billion worth of Bitcoin, which has been seized in various law enforcement actions. This wallet includes 198,109 Bitcoins, worth approximately $20.63 billion, along with other digital assets such as 54,753 Ethereum ($189.03 million), 122.13 million USD ($122.13 million), and 750,722 WBTC ($77.77 million).

The government’s current holdings also feature Binance Coin (BNB Bank), ave (Avi), US dollar currency (US dollars), and others.

Analyzing the potential impact of these developments on the cryptocurrency market, it is reasonable to expect that the market will continue to grow.

The creation of cryptocurrency reserves indicates strong government support for Bitcoin as a store of value and a strategic asset. Similar to previous institutional adoption events, such a move could increase demand for Bitcoin, and reduce its supply in the market. As a result, a global domino effect may begin, as more governments adopt similar strategies and demand rises.

Speaking of specific price targets, the price of Bitcoin could see 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 macroeconomic factors.

Prioritizing US-founded assets like XRP and Solana could boost the adoption of these cryptocurrency projects on a global scale. The price of XRP and Solana could rise by 30-50% in the short term, depending on the details of the strategy. Regarding the decision to launch Trump Coin a few days before the inauguration, it appears to be a strategic move aimed at strengthening Trump’s pro-crypto stance and sparking a sense of excitement among his supporters.

An overlooked consequence may be the government’s entry into areas that traditionally fall outside its jurisdiction. Although framed as deregulation, top-down cryptocurrency policies are inherently regulated, which contradicts the cryptocurrency community’s core values ​​of decentralization.

If deregulation is indeed the goal, how can consumer protection be ensured? Achieving this balance is a daunting task. Through my experience leading Outset PR, I have seen first-hand how well-intentioned policies can create friction between innovation and oversight. Moreover, political promises are often stalled or face obstacles before they become a reality. If these initiatives are not implemented efficiently, the market response may be lukewarm.

Concluding thoughts

Cryptocurrency market enthusiasts have reasons to be excited, as the proposed policies could significantly boost its adoption and valuation.

The biggest stumbling block for cryptocurrencies has long been the government, but if alignment between policymakers and industry can be achieved, the growth potential is very promising.

However, as is always the case in the cryptocurrency market, execution and external factors will ultimately determine the scale and sustainability of this growth.