Regulatory Approach: Promises vs. Implementation

During the 2024 campaign, Donald Trump positioned himself as a pro-crypto candidate, vowing to roll back stringent regulations and make the U.S. the global leader in digital assets. His administration quickly acted on this vision by signing an executive order titled “Strengthening American Leadership in Digital Financial Technology”, which established a crypto regulatory task force and explicitly banned a U.S. central bank digital currency (CBDC). His team also worked to dismantle restrictive financial rules, such as the SEC’s SAB 121 accounting rule, which had made it difficult for banks to hold crypto assets. While these moves initially fueled optimism, the evolving political and economic landscape has created challenges that weren’t part of the campaign narrative.

Political and Economic Challenges: Tariffs and Crypto Market Instability

Trump’s economic policies have introduced volatility into the market. One of the key shifts has been the imposition of new trade tariffs, particularly against China, Mexico, and the plans to impose tariffs on the European Union. These tariffs, meant to protect American industries, have led to increased inflation concerns and a strong dollar, both of which have negatively impacted riskier assets like cryptocurrency. Investors who initially celebrated Trump’s pro-crypto stance have started to offload their holdings due to fears of economic instability and restricted capital flows.

Additionally, the political landscape remains deeply divided. Congress remains split, with Democrats pushing for continued oversight and consumer protection measures. Some Republican lawmakers, despite supporting crypto, are also hesitant about fully deregulating the industry due to concerns over fraud and financial instability. This gridlock has slowed down efforts to pass comprehensive legislation, leaving the industry in a regulatory gray area.

SEC and CFTC: Changing Course but Facing Resistance

One of Trump’s most anticipated moves was replacing SEC Chair Gary Gensler with acting Chair Mark Uyeda, signalling a shift away from aggressive enforcement against crypto firms. The SEC quickly paused or dropped several lawsuits against major crypto exchanges, marking a clear departure from the previous administration’s regulatory stance. However, this policy reversal has not been without consequences.

Some financial watchdogs have raised concerns that an overly lax approach to regulation could lead to market manipulation and investor losses. Meanwhile, the Commodity Futures Trading Commission (CFTC), now led by crypto-friendly officials, launched a Digital Asset Markets pilot program designed to foster innovation. However, without clear legislative backing, these efforts remain temporary and vulnerable to future political shifts.

Legislation and Market Reality

Trump’s administration has promised pro-crypto legislation, backing bills such as the GENIUS Act, which aims to establish a clear regulatory framework for stablecoins. Despite support from Republican lawmakers, Congressional opposition and economic uncertainties have delayed passage of major crypto-friendly bills. The absence of new laws has contributed to market uncertainty, with investors unsure how the administration’s policies will hold up over time.

Market Reactions: Boom to Bust

Initially, Trump’s return to office triggered a crypto market rally, with Bitcoin surging past $100,000 in early 2025. However, the euphoria was short-lived. A combination of rising tariffs, inflation concerns, and security breaches in major exchanges led to a sharp market correction. Bitcoin fell below $85,000, with altcoins experiencing even greater losses.

Additionally, Trump’s personal involvement in launching the $TRUMP meme coin raised concerns about credibility. The token experienced extreme volatility, surging on hype but crashing by over 50% within days. Critics argued that such speculation detracted from serious crypto adoption efforts, further undermining confidence in the industry.

Trump’s Crypto Stance: More Symbolic Than Substantive

While Trump branded himself as the “crypto president”, the reality suggests that his involvement in crypto policy has been more symbolic than transformative. Despite early regulatory wins, his administration has not introduced any substantial policy shifts that directly benefit the industry. The formation of crypto regulatory groups and discussions on a Bitcoin reserve have yet to yield concrete actions that significantly impact the market. Meanwhile, tariff policies and broader economic risks have overshadowed any crypto-friendly rhetoric.

The crypto industry remains hopeful for legislative clarity, but market instability, political division, and global economic challenges continue to shape the landscape. Investors who initially believed in a pro-crypto government have had to reassess their expectations, as economic turmoil weighs heavier than political promises.

Final Thoughts

Trump’s presidency has undeniably changed the crypto landscape, delivering on regulatory promises while also introducing economic policies that have sparked market volatility. The initial optimism has given way to a more cautious outlook, with investors watching closely to see if legislative efforts materialize or if political and economic turbulence will continue to overshadow crypto’s long-term growth. For now, the U.S. remains a crypto battleground, with opportunities and risks coexisting in an unpredictable market.

Written by PepeX-AI.