Since the election victory of the self-proclaimed “Bitcoin President” Trump, the cryptocurrency has been racing from record high to record high. There are also personal financial interests behind Trump's love of Bitcoin.
There is euphoria in the crypto market. Since the election of Donald Trump as the new US President, there has been no stopping Bitcoin. The cryptocurrency is rushing from record to record, setting a new record this morning at $90,647. Since its annual low of $38,505 on January 23rd, the most important and oldest cyber currency has more than doubled.
Bitcoin rally is a classic “Trump trade”
The cryptocurrency is now heading towards $100,000; Bitcoin experts such as Robert Rethfeld from Wellenreiter-Invest assume that the psychologically important mark could soon be reached.
With a view to the steep rise in the price of Bitcoin, market observers are talking about a classic “Trump trade” – the crypto market is considered one of the biggest beneficiaries of Trump's victory in the US elections. “The future for crypto has never looked better than it does today,” says Kris Marszalek, head of the world’s second-largest crypto exchange Crypto.com, on X.
USA should become “crypto center of the planet”.
In fact, Trump is now in power as of January, a president who only recently, but even more intensely, discovered his love for digital currencies. In the summer, the Republican proclaimed himself “Bitcoin President” at a national Bitcoin conference and announced that he would make the USA the “crypto center of the planet.”
To this end, Trump wants to loosen the regulatory environment for cryptocurrencies: He plans to set up a “Bitcoin and Crypto Advisory Board” during the first 100 days of his term in office. This should then develop clear guidelines for regulating the industry.
Appearance for “Crypto Mom”?
Trump had also stated several times that one of his first acts as US President would be to fire the head of the Securities and Exchange Commission, Gary Gensler, because of his “cryptophobia”. This is hardly possible in practice. But typically the SEC chief himself resigns in the period leading up to the inauguration of a new president. The chances are good that Hester Pierce will then take over the leadership of the Securities and Exchange Commission.
The SEC commissioner, appointed by Trump in 2018, has made a name for herself in the industry as a strong advocate for a more flexible and innovative regulatory approach to cryptocurrencies. It's not for nothing that her nickname is “Crypto Mom.”
Hester Peirce has a good chance of becoming the new head of the US Securities and Exchange Commission (SEC).
A “national Bitcoin reserve” for times of crisis?
But that's not all: Trump also announced that he would create a “national reserve” in Bitcoin and thereby “create a national asset from which all Americans benefit.” With the term “national reserve,” Trump is deliberately alluding to the state’s existing strategic reserves of gold and oil; the term is intended to suggest stability in possible times of crisis.
If the Trump administration actually creates a national Bitcoin reserve, it will likely be “a day for the history books for American monetary policy, when the last doubts about the sustainability of Bitcoin will have disappeared,” predicts market analyst Konstantin Oldenburger from the broker CMC Markets.
But how sensible is it for a stable industrialized country like the USA to build up a Bitcoin reserve? The vast majority of economists think this is an absurd idea. Especially since the United States is already home to the world's reserve currency: the dollar.
Bitcoin reserve would be competition for the dollar
The disadvantages of Bitcoin as an additional strategic reserve are obvious: the cyber currency is significantly less liquid than the dollar and is not generally recognized as a medium of exchange. In addition, Bitcoin prices fluctuate extremely strongly. Bitcoin is therefore hardly suitable as a store of value – in contrast to the dollar, but also to gold.
“From the US government’s perspective, it would make no sense to build Bitcoin as a second currency reserve alongside the US dollar,” emphasizes Robert Rethfeld from Wellenreiter-Invest. “In difficult situations, the Fed's guarantee of dollar liquidity is important for other central banks,” said the market expert. From the US perspective, protectionism also means maintaining the US dollar as the world reserve currency.
World Liberty Financial – Trump's crypto project
But whether Trump will even focus on the interests of the USA in his decisions is questionable anyway. The fact is: The billionaire has a very personal interest in improving the market environment for cryptocurrencies; Not only would he be giving something back to his supporters from the crypto community, who helped finance his election campaign to the tune of over $140 million: the businessman Trump himself also pursues his own financial interests.
While Trump called Bitcoin a “fraud” three years ago, he has since made a 180-degree turn, which is also reflected in his business. World Liberty Financial was only launched in October – a crypto project “inspired by Donald Trump”. So far, this primarily consists of a simple website, the sale of a token of the same name with the abbreviation WLFI and a handful of promises.
Trump and the crypto industry’s campaign donations
According to the website Open Secrets, crypto entrepreneurs massively helped finance Trump's election campaign. The so-called crypto triad – the three platforms Coinbase, Ripple and Jump Crypto – contributed the lion's share with around $93 million. Venture capitalist Andreessen Horowitz donated another $45 million. Twin brothers Cameron and Tyler Winklevoss, founders of the crypto exchange Gemini, who once described themselves as the world's first Bitcoin billionaires, gave $5 million.
Trump as “Chief Crypto Lawyer”
According to the website, Trump's sons Eric Trump, Barron Trump and Donald Trump Jr. all hold the position of “Web3 Ambassador” – whatever that may be. Just as opaque as the Trump sons' jobs is their father's: Donald Trump is “Chief Crypto Advocate”. Whether the position of “chief crypto lawyer” is compatible with that of US President remains to be seen.
In any case, experts in the professional world are tearing their mouths apart about the president's crypto project. Because you can already buy the WLFI token, but you cannot trade it. It is “non-transferable”. In fact, purchasing the token is equivalent to a donation; In return, buyers only get an unspecified “say” in the direction of World Liberty Financial.
The World Liberty Financial team has a high Trump stake.
Token revenue should go to “Inner Circle”.
In fact, the WLFI token has been a real failure so far. According to the website, only 1.09 billion tokens have been sold so far, just a fraction of the targeted 20 billion. The value of the tokens sold is around $16 million – it should one day be $450 million.
But what happens to the money if, contrary to expectations, WLFI becomes a success and is able to sell all of the tokens? If you want to know this, you have to look at the small print, which WLFI says is Gold Paper. After that, $30 million will be used for WLFI's ongoing expenses. The rest – around $420 million – will be divided among an “inner circle” of “first supporters”.
Trump ensnares the crypto community on the World Liberty Financial website.
Trump critic: WLFI is a “more transparent Fraud”
The biggest beneficiary of this would of course be – Trump: 75 percent of the revenue will go to a company called DT Marks DEFI LLC, which is owned by the future US president. The hedge fund manager Anthony Scaramucci therefore clearly speaks of “fraud” in an interview with CoinDesk. Scaramucci was only briefly head of communications in the White House during Trump's first term in office and has been one of Trump's biggest critics since that time.
I mean, it is a transparent scam and you should avoid it at all costs.
Trump himself described the WLFI token in a statement on X as “your opportunity” to “shape the future of finance.” Perhaps World Liberty Financial is primarily “your chance” to help shape the future of Donald Trump’s finances.
