Author: 4E Labs
In January 2025, Donald Trump was sworn in as the second term of the US President and immediately launched a financial policy revolution that shocked the world. In stark contrast to the skeptical attitude towards cryptocurrencies in his first term, the Trump 2.0 government launched a series of policies such as "Strategic Bitcoin Reserve", "Crypto Tsar", and "Stablecoin Federal Legislation" with thunderous momentum, completely reversing the US's position on digital assets. This historic shift not only triggered a crazy surge in the price of Bitcoin to $106,000 in a single day, but also profoundly affected the wallets of ordinary people, the strategic layout of enterprises, and even the redistribution of global financial power.
The European Central Bank warned that this was "planting the seeds of financial instability for the future", and pioneers such as El Salvador have begun to adjust their national Bitcoin strategies. In this transformation, how can investors avoid becoming victims of policy experiments? How will ordinary people's payment habits be reshaped? This article uses market data and authoritative analysis to reveal the strategic game and practical impact behind Trump's new crypto policy.
(Core data: 200,000 bitcoins are included in the US permanent reserve, accounting for 6% of the circulation)
The Trump administration's attitude towards cryptocurrencies has undergone a dramatic change. In his first term (2017-2021), Trump publicly criticized Bitcoin as a "scam", claiming that cryptocurrencies were "highly unstable and without foundation", and supported the US Securities and Exchange Commission (SEC)'s crackdown on initial coin offerings (ICOs). However, starting in 2022, Trump’s attitude changed subtly. In December of that year, he released the “Trump Digital Trading Cards” NFT series, which sold out within 24 hours and generated about $4.5 million in revenue, which allowed him to experience the potential of the crypto economy for the first time. During the 2024 campaign, Trump completed his full embrace of the crypto industry. Not only did he accept cryptocurrency donations, he also promised at the “Bitcoin 2024 Conference” to list Bitcoin as a U.S. strategic reserve asset and vowed to make the United States the “global cryptocurrency capital.”
Regulatory framework reorganization (January 21, 2025)
(1) The SEC established a crypto asset working group, led by Hester Peirce, a pro-cryptocurrency commissioner, to focus on formulating standards for the classification of securities/non-security tokens and a differentiated disclosure system.
(2) Establish the position of "Crypto Tsar", to be held by David Sacks, former COO of PayPal, to coordinate crypto policies at the federal level.
Relaxation of accounting standards (January 23)
The SEC abolished SAB 121, which had forced companies to list custodial crypto assets as liabilities, hindering traditional financial institutions from entering the crypto custody market.
Enforcement policy adjustment (Q1 2025)
The SEC withdrew its lawsuit against Coinbase and terminated its investigation into OpenSea, sending a signal of easing regulation.
Digital Asset Executive Order (January 23)
(1) Support the development of blockchain, establish a "Presidential Digital Asset Task Force" and promote open public chain access.
(2) Encourage US dollar stablecoins, while prohibiting the US government from promoting CBDCs.
Strategic Bitcoin Reserve (March 6)
(1) The Ministry of Finance included 200,000 BTC (6% of the circulation) in the "permanent ban on sale" reserve, which was sourced from judicially confiscated assets to avoid fiscal expenditure disputes.
(2) Policy impact: reducing market circulation, strengthening Bitcoin's "digital gold" attributes, and laying the foundation for the United States' advantage in digital currency competition.
The GENIUS Stablecoin Act was passed (May 20)
(1) The United States' first federal stablecoin regulatory framework adopts a two-tier system of "federal charter + state license".
(2) Core requirements:
- Issuers must have 100% US dollar reserves and be connected to a real-time audit system.
- Only licensed institutions can issue stablecoins, and reserve assets are limited to highly liquid assets such as US dollars and US bonds.
(3) Market impact: The share of compliant stablecoins such as USDC has increased, while the growth rate of USDT has slowed down due to regulatory review.
Banks’ crypto business liberalized (March 7)
OCC explicitly allows banks to participate in crypto custody, stablecoins and blockchain networks, cancels prior approval requirements, and lowers the compliance threshold for financial institutions
Analysts point out that the Trump administration’s crypto policy is not a simple economic decision, but a systematic layout with multiple strategic goals:
Consolidating digital financial hegemony
- In the face of global CBDC (central bank digital currency) development, the United States chooses to support cryptocurrency rather than CBDC to maintain the dollar’s dominance in the digital age.
- Finance Minister Bessant criticized the previous government for “killing the industry with law enforcement and supervision” and emphasized that the current government fully supports digital assets.
Stimulate economic growth
- The crypto industry is seen as a new growth engine that can attract capital and create high-paying jobs.
- The Trump team estimates that friendly policies may bring trillions of dollars in blockchain economic value.
Coping with the US dollar credit crisis
Under the global trend of "de-dollarization", crypto assets (such as Bitcoin reserves) may become a "financial backup plan" to help maintain capital trust.
Political interest considerations
- The crypto industry provides Trump with funds and support from young voters in the 2024 election, and the new policy is partly a return to allies.
- By embracing crypto innovation, Trump has shaped the image of a "technology promoter" in contrast to traditional politicians.
(Key case: 813,000 investors lost $2 billion due to "TRUMP coin")
Different crypto asset categories have shown significant differences in their responses to policy changes:
Bitcoin, as a core asset of the policy focus and "digital gold" narrative, has performed relatively steadily overall. From Trump's victory to March 2025, the price of Bitcoin has risen by about 50% in total, despite the sharp fluctuations during the period. Analysts generally believe that as the most likely crypto asset to be included in the national reserve, Bitcoin's positioning as a long-term value storage has been strengthened.
Ethereum has become an unexpected winner of the policy shift. Trump's executive order on January 23 expanded the national reserve target from Bitcoin to the entire digital asset field, which is a major positive for Ethereum. The market has noticed that the US government holds 53,900 ETH, and the Trump family's WLFI has recently bought ETH several times in a row, making its holdings in the portfolio as high as 72%. These signs are interpreted as Ethereum may become the second crypto asset to be included in the national reserve after Bitcoin.
Meme Coins get the regulatory "green light". On February 27, 2025, the SEC's Corporate Finance Department staff issued a statement clarifying that meme coins generally do not constitute "securities" under the US federal securities law, and those involved in their issuance and sale do not need to register with the SEC. The decision triggered a frenzy in the memecoin market, with Trump's "TRUMP coin" soaring 73% to $46.06 during Asian trading hours, with a market value of about $9.2 billion and a 24-hour trading volume of $42.2 billion. However, an assessment commissioned by The New York Times, Chainanalysis, showed that more than 813,000 investors suffered heavy losses after purchasing "Trump coins", with cumulative losses of $2 billion, while the Trump Organization and its partners received $100 million in transaction fees.
Stablecoins benefit from the advancement of the GENIUS Act. As the bill gained bipartisan support in the Senate, the compliance prospects of major stablecoin issuers such as Tether and Circle improved, and the market expected stablecoins to be more widely integrated into the traditional financial system. Analysts predict that the requirement for stablecoin endorsement could create "trillions of dollars" in demand for U.S. Treasury bonds because issuers need to hold high-quality liquid assets as reserves.
The volatility of the crypto market is quickly transmitted to the traditional financial market, forming a complex interactive relationship:
US technology sector: The stock prices of crypto-related companies have diverged. On the one hand, the stock prices of compliant exchanges such as Coinbase have benefited from the improvement of the regulatory environment; on the other hand, companies that rely too much on crypto business face revaluation. Tesla's stock price fell 32.87% due to Musk's excessive involvement in international politics and the "simple and crude" approach of the DOGE department, while Trump Media and Technology Group (DJT) fell 34.75%.
Gold market: As a traditional safe-haven asset, gold prices have steadily climbed as uncertainty in crypto policies has increased, with significant gains in early 2025, reflecting some investors' concerns about cryptocurrencies replacing gold.
Foreign exchange market: The US dollar index rose 4% after Trump's victory, reaching a 26-month high of around 110.17. Analysts believe that the new crypto policy has strengthened the dollar's position as a global reserve currency, as most stablecoins are still anchored to the US dollar.
The Trump administration’s new crypto policy is reshaping the geographical distribution of global crypto companies:
The United States is becoming more attractive: Crypto companies that moved overseas during the Biden administration are beginning to consider returning to the U.S. market. Kara Calvert, vice president of policy at Coinbase, said: “Trump has signaled that the United States is back and we are ready to lead the industry.”
Intensified regulatory competition: Traditional crypto-friendly jurisdictions such as Singapore and Switzerland are under pressure and may be forced to adjust their policies to maintain competitiveness. The European Union has taken a more cautious stance under the framework of the Market Regulation of Crypto Assets (MiCA), forming a different regulatory path from the United States.
Miners re-position: The low energy costs and gradually clear regulatory environment in the United States have attracted Bitcoin miners to migrate from East Asia, Central Asia and other places to the United States, further consolidating the United States' dominant position in Bitcoin network computing power.
Regarding the impact of the new encryption policy on the global status of the US dollar, there are completely different interpretations in academia and policy circles:
The strengthening theory believes that cryptocurrencies, especially US dollar stablecoins, will become a new tool to expand the influence of the US dollar. The US "Politico News Network" and other media pointed out that providing stablecoins to countries and regions with high inflation and need for US dollars can further enhance the influence of the US dollar, which is a "flexible use of US soft power." Finance Minister Bessant stressed that the Trump administration's "all-in on Bitcoin and cryptocurrencies" position will consolidate the United States' leadership in the global financial system.
The weakening theory warns that cryptocurrencies may shake the dollar's hegemony. Some analysts believe that if Bitcoin is widely accepted as a global reserve currency, it may weaken the dollar's position as the world's main reserve currency. In addition, cryptocurrencies can circumvent traditional financial sanctions in the United States, which will also deal a blow to the dollar's hegemony. History shows that when a country's credit system begins to collapse, capital will spontaneously find new ways of circulation - the surge in Japan's black market economy and offshore dollar transactions during the US-Japan trade friction in the 1980s is a clear example.
Trump’s new crypto policy has forced other major economies to reassess their digital asset strategies:
The European Union has chosen to part ways with the United States, continuing to advance its central bank digital currency (CBDC) plan and taking a more prudent regulatory stance on crypto assets. The ECB has launched a two-phase plan for CBDC infrastructure construction, clearly distinguishing it from the United States’ “cryptocurrency first” path.
China accelerates the pilot of the digital RMB while maintaining a strict ban on cryptocurrencies. Zhou Xiaochuan, former governor of the People’s Bank of China, recently said that the U.S. crypto policy shift could increase the vulnerability of the global financial system and reinforce the need for China to develop a controllable digital currency.
Emerging markets react differently: Although El Salvador adopted Bitcoin as legal tender as early as 2021, the latest poll shows that about 92% of the people do not use Bitcoin, and the government has also relaxed the mandatory acceptance of Bitcoin under pressure from the IMF. In contrast, financial centers such as Singapore and the United Arab Emirates are trying to find a balance between innovation and stability and may adjust policies to remain competitive.
Historical experience shows that financial innovation and financial risks often go hand in hand. Trump's new crypto policy may introduce new sources of systemic risk:
The correlation between the crypto market and traditional finance has increased: As banks are allowed to engage in crypto asset custody and other businesses, the two originally relatively isolated markets will form a risk transmission channel. In times of stress, volatility in the crypto market may trigger broader financial instability.
Regulatory arbitrage and shadow banking risks: A loose regulatory environment may lead to the transfer of risky activities to the less regulated crypto field, reproducing the expansion of the shadow banking system before the 2008 financial crisis. 16 Nobel Prize winners in economics have warned that Trump's fiscal policy may trigger inflation and lead to global economic instability.
The monetary policy transmission mechanism is blocked: If cryptocurrencies are widely adopted, the ability of central banks to influence the economy through interest rate adjustments may be weakened, especially in small economies with open capital accounts. MIT research predicts that if 20% of transactions are switched to stablecoins, the effectiveness of the Federal Reserve's interest rate policy may be weakened by 40%.
The cryptocurrency policy in the Trump 2.0 era is reshaping the financial landscape, bringing unprecedented opportunities and risks to ordinary people. This change not only affects investors' asset allocation strategies, but is also likely to change daily payments, savings and wealth inheritance methods. The following are specific suggestions for different groups of people:
Re-evaluate risk tolerance: The volatility of crypto assets far exceeds that of traditional assets. The $1 billion liquidation event in March 2025 shows that leveraged operations may swallow up the principal in an instant. It is recommended to control the allocation of crypto assets within the range of 5–15% of investable assets.
Focus on infrastructure rather than speculative products: Bitcoin, Ethereum and other underlying protocol tokens have long-term value support due to their inclusion in the national reserve category, which is more durable than meme coins (such as the lesson of 813,000 investors losing $2 billion in TRUMP coins).
Use compliant channels to participate: As the supervision of platforms such as Coinbase becomes clearer, it is preferred to choose spot ETFs regulated by the SEC (such as BlackRock IBIT) rather than overseas exchanges to reduce the risk of fraud.
Daily application of stablecoins: Compliant stablecoins (such as USDC) under the GENIUS Act may become a new option for cross-border payments, with fees 80% lower than traditional remittances, but it is necessary to confirm that the service provider holds 100% of the reserves.
Beware of the "crypto-inflation" trap: Some merchants may charge a 3-5% surcharge in the name of cryptocurrency payments, and the actual cost may exceed that of credit cards. It is recommended to use the fiat currency price as the benchmark when comparing prices.
Web3 Entrepreneurship Window Period: After the OCC allowed banks to participate in encryption business, the demand for compliant DeFi middleware and institutional-level custody solutions surged. However, it should be noted that the SEC's enforcement focus on "unregistered securities issuance" remains.
Regional compliance strategy: Even if the US policy is loose, it is still necessary to comply with regional regulations such as MiCA for the global market. It is recommended to adopt a "subject separation" structure (such as US entities handling compliance business, and offshore entities undertaking high-risk innovation).
Skill upgrade path: The median annual salary of blockchain engineers has reached $178,000 (Robert Half data in 2025), and the demand for learning smart contract languages such as Solidity has increased by 300%. However, it is necessary to distinguish between core development and hype concept projects.
Pension allocation adjustment: Some 401(k) plans have begun to provide crypto exposure such as Grayscale ETHE, but the Department of Labor warned that such assets "do not meet the rules of prudent investors" and recommended that traditional assets be maintained as the main assets.
The symbiotic relationship between the US dollar and Bitcoin: Although the US strategic reserve may enhance the status of Bitcoin, the US dollar stablecoin (accounting for 75% of global trading volume) has instead strengthened the hegemony of the US dollar. The two are not a zero-sum game.
Prediction of the regulatory cycle: The current loose environment may change with the 2026 mid-term elections. SEC Commissioner Pierce's term expires in August 2025, and the position of his successor will affect policy continuity.
Tax compliance: IRS lists cryptocurrency as a 2025 audit focus. Use tools such as CoinTracker to fully record transaction history, and pay special attention to the tax reporting obligations of forked coins and airdrops.
Security practices: Phishing attacks increased by 300% during policy easing periods (Chainalysis data). Hardware wallets store large amounts of assets, leaving only small amounts in exchanges.
Intergenerational communication: Cryptocurrency investments by young family members may raise estate planning issues. Clarify digital asset inheritance terms (such as private key custody arrangements) in legal documents.
Historical experience shows that every technological-financial revolution will create a new rich class, but also make the unwary pay a heavy price. After the bursting of the Internet bubble in the 1990s, the real value was retained by infrastructure providers such as Amazon, rather than hype concepts such as Pets.com. In the field of crypto, ordinary people should focus on: (1) the value accumulation of the underlying blockchain protocol; (2) the practical functions of compliant stablecoins; (3) tokenized applications combined with the real economy. Only by avoiding the illusion of "getting rich quickly" can we achieve steady growth of wealth in this round of changes.
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