- Donald Trump’s transition team is working closely with top crypto executives to reform the industry’s current regulatory system.
- Reports suggest that Trump is considering a crypto reserve specifically for US-native tokens such as XRP, Solana, and USDC.
- Trump’s New SEC Reportedly Started Tackling Crypto Regulations, including SAB 121 and debanking policies, as his first day in office approaches.
The inauguration of Donald Trump has sparked considerable optimism in the crypto market, fueled by promises of reforms to the sector’s regulatory framework. Recently, reports indicate that Trump is considering establishing a strategic reserve for US-based cryptocurrencies such as Solana and XRP.
Donald Trump administration prepares for pro-crypto reforms, altcoins begin early rally
With just four days to go, Trump’s presidential inauguration has become a beacon of hope for a new approach to crypto regulation.
The crypto market is bubbling with optimism as the new president’s transition team continues to meet with industry leaders to discuss the best approaches to regulating digital assets.
According to the Washington Post, Trump is expected to begin issuing executive orders regarding Bitcoin and crypto reforms on his first day in office. Among the expected reforms is a review of policies that affected crypto under the outgoing government.
These include Staff Accounting Bulletin 121 (SAB 121), which requires entities holding digital assets to report them on the liabilities side of their balance sheet.
A congressional vote rejected the bill due to concerns about its implications. However, President Biden reversed the bipartisan decision after vetoing their resolution.
Under Donald Trump’s administration, the Securities & Exchange Commission (SEC) will likely repeal the controversial SAB 121. On the other hand, the Financial Innovation & Technology for the 21st Century Act (FIT21) may receive the green light from the new administration .
The bill proposes a comprehensive regulatory framework for digital assets and provides clear guidelines on the role of regulators in addressing crypto-related issues.
“Donald Trump will approve the FIT21 bill, accelerating the global legalization of the cryptocurrency market and intensifying the crackdown on non-compliant cryptocurrency businesses,” Hashdex Group said in a report.
Similarly, a report from the New York Post suggests that Trump may consider creating the first-ever strategic reserve for “made in the United States” cryptocurrencies.
This includes XRP, Solana and the stablecoin USDC. He says planning began several weeks ago. This has sparked a rally among altcoins as investors flock to these tokens. XRP and SOL are currently up 15% and 7%, respectively.
However, the report mentions internal concerns regarding the potential impact this could have on Bitcoin. This is largely due to the new president’s initial promise of a strategic Bitcoin reserve.
There are also concerns that the president will not keep his promises after being sworn in.
“The first 50 days of Trump’s presidency will determine the trajectory of Bitcoin in 2025,” Gracy Chen, CEO of Bitget, told FXStreet. Delayed government actions towards Bitcoin and the digital asset sector could send crypto prices tumbling.
“If significant steps are not taken during this period to begin implementing the promised changes and support the crypto market, Bitcoin could face a 15-20% decline, likely remaining below the range of $80,000 to $90,000 in the first quarter of 2025,” Chen said. .
FAQ Bitcoin, altcoins and stablecoins
Bitcoin is the largest cryptocurrency by market capitalization, a virtual currency designed to serve as currency. This payment method cannot be controlled by any person, group or entity, eliminating the need for third party participation during financial transactions.
Altcoins are any cryptocurrency besides Bitcoin, but some also consider Ethereum to be a non-altcoin because it is from these two cryptocurrencies that the fork occurs. If this is true, then Litecoin is the first altcoin, derived from the Bitcoin protocol and, therefore, an “enhanced” version of it.
Stablecoins are cryptocurrencies designed to have a stable price, with their value backed by a reserve of the asset they represent. To achieve this, the value of a stablecoin is linked to a commodity or financial instrument, such as the United States dollar (USD), whose supply is regulated by an algorithm or demand. The main purpose of stablecoins is to provide an on-ramp for investors willing to trade and invest in cryptocurrencies. Stablecoins also allow investors to store value since cryptocurrencies, in general, are prone to volatility.
Bitcoin dominance is the ratio of the market capitalization of Bitcoin to the total market capitalization of all cryptocurrencies combined. This gives a clear picture of the interest in Bitcoin among investors. Strong BTC dominance typically occurs before and during a bull run, during which investors resort to investing in relatively stable, high market cap cryptocurrencies like Bitcoin. A decline in BTC dominance typically means investors are shifting their capital and/or profits to altcoins in search of higher returns, which usually triggers an explosion in altcoin rallies.
