After spending more than $ 245 million during the 2024 electoral cycle, the cryptocurrency industry now harvested its awards. The industry-consists of a variety of exchanges of cryptocurrency, venture capital companies and rich investors-has made it possible to postpone anti-Crypto keys to the congress, including the Katie Porter representative of California and Sherrod Brown Sherrod Senator. More crucial, the influence of the cryptographic industry now extends to the oval office. During a cryptocurrency conference in the United Arab Emirates in December, Eric Trump promised that his father would be “the most pro-Crypto president in the history of America”, and Trump himself promised that “the rules will be written by people who love (the crypto)”.
Faced with a favorable regulatory environment, cryptographic markets have shown the rush, the price of bitcoin exceeding $ 100,000 per month after Trump’s victory. However, despite the media threshing, cryptocurrencies remain a rampant speculation bubble. By promoting the cryptographic industry, the Trump administration recklessly legitimately legitimately a high risk, endangering the well -being of the Americans most affected by very volatile investments such as the crypto – groups marginalized by tradition which lack generational wealth.
Cryptocurrencies create a system of transactions that are not based on a trusted third party as a bank. This decentralized process allows consumers to engage directly between them, in theory, by reducing the cost of a given transaction. Crypto optimists have long welcomed the potential role of crypto in promoting financial inclusion, such as providing financial services to non -banished (those who do not have their own bank account), facilitating the affordable transfer of funds and as a means of preserving wealth in countries with volatile currencies. However, these promises failed to take place due to the slow transaction speed of crypto, impracticity for daily use and piracy sensitivity.
“By promoting the cryptography industry, the Trump administration recklessly legitimately legitimately legitimate, endangering the well -being of the Americans most affected by very volatile investments such as the crypto – groups marginalized by tradition which lack generational wealth.”
As such, bitcoin and other cryptocurrencies have largely become a speculative investment that has found a unique attraction in low-income and minority investors. Due to their decentralized nature, their ease of relative access compared to other types of investments and a distrust within minority communities towards traditional financial institutions, cryptocurrencies have acquired a reputation as a financial tool for wealth creation which bypasses the often exclusive and inequitable heritage system. In turn, many cryptographic companies have chosen to double this call, for example, thanks to advertisements targeting specifically black investors featuring celebrities such as LeBron James and Spike Lee and the placement of automatic Bitcoin ticket distributors in minority and low -income neighborhoods in American cities.
Consequently, those within low -income and minority communities are more inclined to have a crypto. For example, underbancarized households, which have a bank account but frequently depend on alternative financial services such as salary loans and tend to be at low income, are more likely to hold cryptocurrencies. In addition, black, Hispanic and LGBTQ Americans hold cryptocurrencies at a higher pace than their white and heterosexual counterparts. In addition, compared to white investors, black investors are almost twice as likely to see crypto as a safe investment.
However, this image of the crypto spends the danger, in particular for retail investors. Due to the volatility of crypto, many individual investors – in particular black and Hispanic investors, which generally lack emergency savings compared to their white counterparts – cannot absorb losses that can occur from a week during the week or day to day. According to a study by the Bank of International Settlements, between 2015 and 2022, around three quarters of Bitcoin holders have lost money for their investments. In addition, many individual investors (including low -income and minority) can lack time or knowledge to follow market developments. In 2022, while Crypto Exchange FTX and Cryptocurrency Terra collapsed, eliminating billions of dollars, retail investors have generally bought more crypto while larger investors spilled their assets, effectively placing the weight of losses on smaller investors, some of which have lost a large part of their backups. Finally, automatic Bitcoin ticket distributors, many of which directly target minority investors, often charge significantly larger costs than automatic distributors of traditional tickets, which recall other predatory financial products such as salary loans.
“According to a study by the Bank of International Settlements, between 2015 and 2022, around three quarters of Bitcoin holders have lost money on their investments”
This volatility trend should continue in the predictable future, because the Trump administration has exacerbated cryptographic speculation. Even if the administration has promised to establish a new regulatory framework to govern the crypto, its shares indicate that any established regulation will probably not make crypto a safe investment for individual investors. Trump named Paul Atkins and David Sacks, both supporters of Crypto, in key regulatory positions as head of the Securities and Exchange Commission (SEC) and the Czar Crypto, respectively. The SEC has reassured its first right of cryptographic litigant, Jorge Tenreiro, who led several proceedings against crypto exchanges for potential violations of investor protection laws, and should now resolve or reject these cases, probably to the terms favorable to cryptographic exchanges. The congress led by the Republicans could also adopt legislation delegating cryptographic regulations to the Commodity Futures Trading Commission (CFTC), whose smaller budget (compared to the SEC) limits its regulatory capacity, potentially weakening the protections of investors.
In the end, it is the hugging by Trump of the medal of the same (a type of cryptocurrency based on a meme or a popular figure and which has no inherent purpose) which most clearly embodies its attitude and its political inclinations towards the crypto. Three days before his inauguration, Trump released his play with $ Trump, with Melania Trump announcing her $ Melania piece shortly after. Although it is marketed as a way to support Trump and not an investment opportunity, the Trump organization has already won nearly $ 100 million in traders’ fees, while some 800,000 portfolios, many of which belonging to small investors, lost nearly $ 2 billion. Aside from the conflicts of flagrant interests, Trump’s memes play indicates a tacit approval of shady business practices that enrich the rich and harm the retail and minority investor, as well as the reluctance to solve the biggest problem of crypto – the abundance of summary financial products and risks that exceed any true crypto innovation and the technology behind it could bring. While some members of the industry can deplore this approach in private as a “horrible look” for industry as a whole, Trump laughs to the bank.
