As crypto investors and service providers have braced for heightened regulation, President Trump’s inauguration has reshaped the conversation, signalling a potential shift in the industry’s future.
Self-dubbed the “Crypto President”, Trump signed an executive order in January titled “Strengthening American Leadership in Digital Financial Technology” (“the Order”), seeking to promote the growth and use of digital assets and blockchain technology across all sectors of the US economy.
The Order stipulates that it will provide “regulatory clarity and certainty… transparent decision making, and well-defined jurisdictional regulatory bodies”, and continues to state that these elements are “essential to support a vibrant inclusive digital economy and innovation in digital assets, permissionless blockchains, and distributed ledger technologies”.
The mention of regulation may have come as a surprise to some crypto investors and enthusiasts, as Trump’s presidential campaign promised to ‘unseat’ the Chairman of the Securities and Exchange Commission, who was notoriously aggressive in his approach to crypto regulation. ‘Regulatory clarity’, however, does not necessarily mean any increased regulation, and may signal a potential return to crypto’s decentralised roots. Meanwhile, the rest of the world continues to push for tighter regulatory frameworks and greater clarity, albeit at a potentially slower pace depending on the outcomes of the Order.
While an executive order on cryptocurrency was widely expected, many investors and enthusiasts were caught off guard by the unexpected launch of Donald Trump’s own meme coin – $TRUMP – just three days before his presidential inauguration. A stark reminder of the market’s volatility, $TRUMP’s market capital surged to US$14.5 billion within its first 48 hours. The token’s price peaked at over $73 on 19 January, only to decline steadily following the 20 January inauguration. A month later, the value has plummeted to below $13.
The unprecedented launch of $TRUMP was a near-perfect case study of the current regulatory freedoms of the cryptocurrency market. With minimal oversight, a high-profile political figure was able to introduce a digital asset that rapidly amassed billions of dollars, only to experience extreme volatility within days. The event raised serious questions over the need for clearer regulations, enhanced investor protections, and the broader implications of political figures – or other high-profile individuals – influencing cryptocurrency markets.
We saw a similar rise and fall of Bitcoin pre- and post-inauguration. Bitcoin investment surged after Trump’s election win, rising to an all-time high in December 2024, before plummeting through February 2025. The collapse was speculatively linked – at least in part – to Trump’s seeming inaction on the pro-crypto claims of his campaign. The influence of Trump’s actions on the price of Bitcoin was evident on Sunday [2 March 2025] when the price surged again following his announcement of a US crypto reserve.
Bitcoin’s price fall also coincided with the “world’s biggest ever theft”, after hackers stole approximately US$1.5bn from Dubai-based crypto trading platform, Bybit. Scepticism around the security of cryptocurrencies – including due to a lack of regulation – has been ever present as the market evolved, with events such as the recent Bybit theft, and the high-profile FTX fraud case, standing as reminders of the substantial risks for crypto investors. Although, Bybit has pledged to fully reimburse investors.
Trump’s stance on deregulation – which extends across a broad spectrum beyond crypto -indicates a reduced emphasis on government intervention, with greater control for the market and minimal oversight, presenting both benefits and risks.
Potential benefits
Increased interest and accessibility
Reduced regulatory barriers may make it easier for novice investors to enter the crypto market, fostering innovation and encouraging wider adoption. With less red tape, startups and investors can engage with digital assets more freely, potentially accelerating the mainstream acceptance of cryptoassets.
Around the noise of Trump’s “Crypto President” campaign, and the launch of his own coin, we saw enquiries about crypto investment from clients who had never expressed an interest in digital assets before. Enough awareness was being raised to prompt people to invest despite knowing little – or sometimes nothing at all – about the market.
While increased interest may be beneficial for the crypto market, “DYOR” (Do Your Own Research) – remains a principle practice for both new and established investors to mitigate the risks associated with simply following trends or falling foul of misinformation.
Greater market stability
Increased participation may also contribute to greater long-term price stability within the crypto market. While cryptocurrencies have yet to see widespread institutional adoption, growing engagement from professional investors, businesses, and financial institutions -driven by easier market access – could enhance liquidity.
Professional investors – who are likely to follow the DYOR principle –are often better positioned to separate the wheat from the chaff, identifying which opportunities have substance and which are likely to be merely a flash in the pan.
With investors supporting more viable and reliable options, the market may, over time, become more stable as projects lacking substance struggle to secure funding.
Potential risks
Fraud and market manipulation
While deregulation may make the crypto market more accessible to investors, it also increases the risks of scams, fraud, and market manipulation. Currently ‘pump-and-dump’ schemes – where investors heavily promote a token to surge the price (“pump”) then sell their holdings for a profit (“dump”) – insider trading, and other unethical practices are left unchecked due to the lack of regulation.
Less protection for investors
Although increased regulation may make entry to the market for investors more challenging, it also provides better protection for their investment. Without robust compliance measure, investors may have few legal protections in cases of fraud, platform collapses, or the mismanagement of assets. This could, ultimately, discourage investors – and institutions – from entering the market.
Conclusion
Ultimately, while deregulation in the US may drive short-term gains such as increased interest from investors, reversing progress in regulatory frameworks could create long-term instability.
The ideal scenario is likely to be a balanced approach, where countries continue to develop sound regulations, while still allowing for innovation and market growth. If this balance can be found, crypto adoption may progress more sustainably, benefiting both individual and institutional investors alike.
