Trump’s Return to Presidency and the Crypto Frenzy

Donald Trump’s return to the White House has sparked intense debates within the crypto community. While many people were optimistic about his pro-crypto stance during the campaign, his actions in the first few days of his presidency have raised questions about their long-term effects for the industry. 

In this article, we’ll discuss the events connected to the world of digital assets that took place around President Trump's inauguration: from the launch of the TRUMP coin to the probable implications for the digital dollar. 

TRUMP Memecoin: A Market Sensation or a Cash Grab?

One of Trump’s most attention-grabbing moves was the surprise launch of the TRUMP crypto on January 18. It soared to an all-time high the following day, achieving a fully diluted valuation of over $70 billion and flipping major memecoins. With 200 million TRUMP coins in circulation, its price has already experienced dramatic highs and lows.

Source: CoinMarketCap

When Trump claimed he didn't “know much about it,” it caused the price to decline. But still, the frenzy around the token pushed Solana's total value locked (TVL) to a record $12 billion, and the network even faced serious congestion due to increased activity.

Source: DeFiLlama

Adding to the chaos, First Lady Melania Trump launched her own memecoin, MELANIA, which briefly hit $13 before plummeting to under $3. Its launch also caused a fall in price for the TRUMP coin.

Critics argue the initiative appears to be a mere cash grab, potentially damaging the reputation of the broader crypto and Web3 industries and turning the attention away from serious matters.

Memecoins and ETFs

The excitement surrounding TRUMP memecoin has sparked interest in this kind of cryptocurrencies, which is why asset managers like Osprey Funds and REX Shares filed with the SEC for exchange-traded funds (ETFs) focused on such tokens as Dogecoin, TRUMP, and Bonk. 

This marks a significant step toward institutionalizing memecoins, though skepticism about their long-term value is still very present.

DOGE and Elon Musk’s Involvement

The newly created US Department of Government Efficiency, led by Elon Musk, displayed the Dogecoin (DOGE) logo on its website. While the connection to the token itself is not direct, other than the name, DOGE’s price grew 13% in response, breaking its short-term downtrend. However, there was a correction shortly after.

Source: CoinMarketCap

The move attracted criticism from legal advocacy groups, which accused the committee of violating transparency laws.

Trump’s $500 Billion Stargate Venture

During the event for launching TRUMP crypto, the president unveiled a $500 billion joint venture, Stargate. This initiative aims to establish data centers in Texas and invest heavily in artificial intelligence (AI) infrastructure. Stargate’s announcement has also increased the interest in AI-related cryptocurrencies. 

The Crypto AI Agent Sector

The crypto AI agent sector has experienced rapid growth, emerging as a multibillion-dollar asset class since October. AI tokens represent autonomous programs designed to perform tasks such as trading, providing market insights, etc.

This week, tokens like AI16Z and AI Rig Complex’s ARC surged by over 30% influenced by Trump’s announcement of significant private-sector investments in AI infrastructure involving firms like OpenAI, Oracle, and SoftBank.

The End of CBDCs Under Trump?

Trump’s presidency likely means the end of any plans for a US central bank digital currency (CBDC), digital dollar, coming true any time soon. Trump has been a vocal opponent of CBDCs, arguing they would give the government too much control over peoples’ finances. Key Republican figures in Congress have echoed these concerns. They mention privacy risks and criticize government involvement in the market.

Meanwhile stablecoin legislation is gaining traction, with bills under review in both houses of Congress. Stablecoins, seen as a middle ground, may provide the US with a digital currency solution while addressing privacy concerns.

Market Reactions and Speculation

The crypto market has been very volatile, partly due to Trump’s unclear views. It started after Trump failed to mention crypto during his first day in office, a noticeable contrast to his campaign rhetoric. Additionally, GOP congressional priorities excluded crypto and Bitcoin from their agenda, which was a major disappointment for many in the industry.

On prediction platform Polymarket, the odds of a strategic Bitcoin reserve being created during Trump’s first 100 days fell from 60% to 21%.

Source: Polymarket

Conclusion

Even though Donald Trump’s return to the presidency is still so fresh, it has already caused many controversies in the Crypto World. From what we’ve seen so far, his administration is set to influence the industry in the most unpredictable ways. While some view his initiatives as innovative and aligned with Web3 growth, others see them as overly opportunistic and risky for the crypto ecosystem.

As the dust settles, the crypto community must navigate these developments carefully, balancing optimism for new opportunities with caution about potential failures. With the intersection of politics, technology, and finance growing ever closer, the coming months will obviously be crucial for the future of crypto under Trump’s leadership.

SimpleSwap reminds you that this article is provided for informational purposes only and does not provide investment advice. All purchases and cryptocurrency investments are your own responsibility.