The crypto community watches closely as Donald Trump prepares for his second inauguration. Investors wait with anticipation to find out how Trump's new administration will shape the future of blockchain technology and Web3 assets. In recent years Cryptocurrency has grown exponentially with the likes of Bitcoin, Ethereum, and decentralized finance (DeFi) becoming ever more important in the global financial ecosystem.
With cryptocurrency becoming more mainstream in recent years, Trump's incoming administration could inspire innovation across the industry, or create new challenges. Cryptocurrency was up and coming during Donald Trump’s first term, and his administration took a more hands-off approach.
Big Things for Crypto in 2025
A deregulatory and pro-business approach from the Trump administration could be of huge benefit to upcoming blockchain projects in 2025, driving more investment into the space. For example, the new Solana Layer-2 solution Solaxy, which has already generated 10 million in its crypto presale, could continue to see a positive impact under Donald Trump’s administration if his pro-business stance continues.
2025 has already seen amazing new developments in the crypto world. This includes the rise of many new meme coin projects including Trump's very own “TrumpCoin”. Like many up-and-coming meme coins, it is designed as a collectible and fun asset. Mainly driven and designed around Donald Trump's influence and brand. The coin has been designed around fun and humour. However, its mere existence could also signify a positive stance on cryptocurrency from the incoming administration.
What Are the Benefits for Cryptocurrency under Trump?
Pro-business Policies and Deregulation
Trump is renowned around the globe for his pro-business, deregulatory stance which could be a great advantage for the cryptocurrency world. In his previous term, Trump favoured policies that reduced bureaucracy and encouraged corporate growth. It is hoped that this will extend into the crypto sector in the future meaning fewer regulations and promoting innovation.
With fewer regulations, the crypto world could be free to grow and innovate without worrying about complex compliance requirements. This would be of huge benefit to crypto exchanges, blockchain startups, and DeFi platforms. In a recent survey by PwC, it was found that 60% of crypto executives believe that regulatory clarity is key to the industry's growth. Showing the benefit that a lenient regulatory approach would have on the crypto world.
If the Trump administration chooses to reduce regulatory strains and encourage crypto adoptions, projects like Trump’s own meme coin and the new Solaxy, will be free to grow with little interference.
Investment and Growth Opportunities
The pro-business policies of the incoming Trump administration could also encourage increased investment into the cryptocurrency space. This will boost the overall market size and stability of the crypto world. This increase in investment won’t only benefit established players but will also support innovative startups and new blockchain projects.
As per the Grayscale 2023 Digital Assets Report. Institutional investors made up 58% of the total cryptocurrency investment in 2022. This was a significant increase from previous years and goes to show that cryptocurrency investment is on the rise and will continue to rise under favorable policies.
The US as a Global Leader in Cryptocurrencies
Trump may be keen to maintain the nation’s position as a key global player in the cryptocurrency industry. The U.S. is home to 23% of the global crypto trading volume. If the Trump administration agrees to a business-friendly environment for the crypto scene, the U.S. will remain a hub for cryptocurrency innovation. This will attract more talent, new projects, a skilled workforce, and increased capital.
With other countries around the world looking to tighten up their regulations around cryptocurrency, Trump could solidify U.S. dominance in the Web3 space. This could also inspire others around the world to take a more pro-business approach to cryptocurrencies. With U.S-based firms leading in international markets, they could push for international standards that favor open and decentralized platforms.
Widespread Adoption of Blockchain Technology
Trump’s new administration could also be a huge benefit to blockchain technology in general. Whilst historically, Trump has expressed skepticism about cryptocurrencies, he has always had a keen interest in blockchain technology. Especially its beneficial impact on the global financial sector. For example, its ability to improve transparency, streamline industries, and reduce fraud.
One of Trump’s key goals is to reduce inefficiencies in government operations. One way he could do this is to capitalize on the use of Blockchain technology in various fields. From healthcare to supply chain management, and finance. For example using blockchain to improve the delivery of social services, or to reduce costs in public sector procurement.
What are the risks for Cryptocurrency under Trump?
The Potential for Market Instability
As we can see, there are many upsides associated with a new Trump administration for the crypto world. However, there are some key risks that crypto investors should be aware of. The main concern right now is regulatory uncertainty.
As cryptocurrency becomes more mainstream, the SEC and other regulatory bodies might decide to go on the offensive and tighten regulations. Last year, the SEC issued more than $1.5 billion in fines for crypto violations. This could be a sign of things to come, with heightened scrutiny investors may be deterred creating questions about market stability.
Crackdown on Fraud and Increased Taxation
In a 2023 report by Chainalysis, crypto-related crimes, including fraud and scams, increased by 80% in 2022. This has prompted governments across the globe to increase their management and oversight of the crypto space. If crypto-related crimes continue to increase in the U.S. there is the potential that the Trump administration could crackdown on the sector.
On top of this, another risk to the cryptocurrency world under Trump could be new taxation regulations. In a bid to increase revenue for the U.S. Trump may need to introduce new taxes on cryptocurrency transactions and profits. With more stringent tax rules and reporting regulations, crypto may start to lose its appeal from investors. Many who are drawn to crypto because of its tax benefits in comparison to traditional financial assets.
Both of these issues could mean investors and businesses move from the U.S. to more crypto-friendly jurisdictions, reducing and hindering the crypto market in the states.
Other risks to cryptocurrency under the new Trump administration include the impact of Donald Trump’s rhetoric. Bitcoin saw significant fluctuations in price after Donald Trump made comments about the future of the financial markets in the US during his first term. A repeat of this could make potential buyers uneasy and could trigger panic selling and market volatility.
Trump's incoming policies on the environment could also have an impact on the crypto world - particularly coins that use energy-intensive algorithms. Policies aimed at curbing energy consumption could impact U.S.-based crypto miners who may choose to relocate to other countries.
It’s a balanced look for crypto under Donald Trump, with most hoping for a positive outcome. With Trump already planning for a crypto-specific position in the white house, his own meme coin, and his historical support for the sector - we can only hope for positive changes that will benefit the crypto industry for years to come.
Conclusion
Overall, there are both huge benefits and significant risks for crypto under Trump’s new administration. Crypto investors across the world will be watching closely over the coming months for updates on regulations, taxation, and new environmental policies that could affect their digital assets.
