Crypto gets quick return on Trump investment after campaign funding

Crypto executives, companies and investors are getting an early return the investment in the year Donald Trump

After pouring tens of billions of dollars into Trump’s 2024 presidential campaign, the crypto industry has bounced back handsomely in his first week in the White House.

“I don’t think they could have imagined a better result than the last 48 hours,” Benchmark’s Bill Gurley. early bet good Uberhe told CNBC “Closing Bell” on friday Gurley said that while the new influence of tech in Washington may be detrimental to some parts of the startup world, “it’s obviously good for crypto.”

The industry’s support for Trump came as the Republican leadership pledged to end the government’s crackdown on crypto and establish favorable rules for those seeking to develop new types of payment technology, easing restrictions on investment in cryptocurrencies.

Industrial heavyweights please Coinbase CEO Brian Armstrong and Binance CEO Richard Teng are hailing the start of a new era.

“You have to remember, for the last four years, we really felt like we were being attacked by this administration.” Armstrong told CNBC At the annual World Economic Forum in Davos (Switzerland). Armstrong criticized the Biden White House for trying to “weaponize the lack of clarity in the rules” while also punishing companies that tried to be helpful.

“There were some bad actors, to be fair,” Armstrong said. “But they really tried to go after good actors, I think, like us.” It was Coinbase one of the main corporate donors in the 2024 election cycle.

Bitcoin It reached a record high of around $109,000 on Monday and hovered near $105,000 by the end of the week. It’s up more than 50% since Trump won the election in early November.

It included the 48-hour span that Gurley mentions executive order Trump signed on Thursday to promote the adoption of digital assets in the US

Trump has called on members of the Treasury, the SEC and the Commodity Futures Trading Commission to join forces on a task force to assess the potential for government-seized cryptocurrencies.

The order outlined other key priorities, such as protecting bitcoin miners and software developers from what the president called “bullying” and promoting stablecoins pegged to the US dollar, while banning the Federal Reserve’s digital dollar.

Venture capitalist David Sacks, who Trump hit To become the White House’s AI and cryptographer, he joined the president in the Oval Office to sign the order.

Later on Thursday, the SEC made an important announcement, withdrawing an accounting rule that made institutional adoption of crypto difficult, forcing banks to treat bitcoin and other tokens as liabilities on their balance sheets.

The rule known as SAB 121 was introduced in 2022 and imposed strict capital requirements on digital assets. It also increased the financial and regulatory risks of providing crypto-custodial services and increased operational costs for financial institutions.

Efforts to repeal SAB 121 won bipartisan support in Congress last year. But then President Biden vetoed the proposed legislation, leaving the rule intact, allowing banks to take digital assets beyond derivatives trading and offer exchange-traded funds to wealth management clients.

SEC Commissioner Hester Peirce celebrated the move on tuesday was selected to lead a new “cryptography task force” within the agency.

“Bye bye SAB 121! It wasn’t fun,” he wrote publish in X.

Prior to the SEC’s announcement, Goldman Sachs CEO David Solomon say CNBC in Davos said that from a regulatory perspective, the bank could not own bitcoin and would re-examine the issue if the rules changed. general manager of Morgan Stanley and Bank of America He also said that President Trump’s pro-crypto tone could reshape their plans and lead to an expanded digital offering.

A few days earlier, Gary Gensler resigned as chairman of the SEC. Gensler, who emerged as an opponent of the crypto industry, defended the rule needed to protect investors in the event of the bankruptcy of crypto companies. Trump’s pick to succeed Gensler is a former SEC commissioner Paul Atkinscurrently CEO of Patomak Global Partners.

on tuesdayOn his second day in office, Trump issued a full pardon to Silk Road founder Ross Ulbricht. Ulbricht, 40, had been serving a life sentence without the possibility of parole since 2015 after being convicted in federal court. in the seven positions it includes in conspiracy to distribute narcotics and hack computers.

Silk Road operated from 2011 to 2013, serving as a dark web marketplace where users bought and sold a mix of contraband, including illegal narcotics like heroin. Platform Facilitated over $200 million in salesaccording to federal prosecutors, and was linked to the deaths of at least six people.

At its peak, the Silk Road functioned as a global drug bazaar, with transactions largely taking place there bitcoinmaking it one of the first large-scale applications of a cryptocurrency. Prosecutors later argued that the anonymity provided by bitcoins was crucial in allowing Silk Road vendors to hide their identities.

Ulbricht became a cult hero in the crypto community, and “release Ross” the movement resonated with conservative media personalities and politicians.

“I called the mother of Ross William Ulbricht to let her know that in honor of her and the Libertarian Movement that has so strongly supported me, it was my pleasure to sign an unconditional pardon for her son, Ross.” Trump wrote it In a post on Truth Social on Tuesday.

Changpeng Zhao, co-founder and former CEO of Binance, he commented After announcing the pardon with a clapping emoji of X. It was Zhao punished four months in prison in April after pleading guilty to enabling money laundering at his crypto exchange.

Most notably, the president has been operating in a part of the market notorious for fraud. Last weekend, while crypto leaders and members of Trump’s family and inner circle were partying Crypto Ball In Washington, the $TRUMP meme coin was taking off online.

Then came the $MELANIA coin. Taken together, the Trump family made billions of dollars in paper ownership of assets created out of thin air. Crypto enthusiasts worry that this is a troubling sign of Trump’s true intentions and damages the credibility of an industry trying to prove its legitimacy.

“Call it old fashioned, but I think presidents should focus on running the country and not launching scam tokens,” Nic Carter of Castle Island Ventures wrote in one. the message on X

The website for $TRUMP says 80% of the supply is from the Trump Organization and affiliates.

Legislators also have objections.

Sen. Elizabeth Warren and Rep. Jake Auchincloss, both Democrats from Massachusetts, raised concerns about the first couple using their positions to enrich themselves, along with the possibility of “carpet pulling” scams.

“We write with great concern about President Trump and First Lady Melania Trump’s decision to launch $TRUMP and $MELANIA, two meme coins that allow for extraordinary returns from his Presidency.” the couple said in a letter obtained by CNBC.com. “These coins don’t create a faster, cheaper, safer way of payment. These coins don’t help people borrow. They don’t make the financial system better for consumers in any way.”

$TRUMP is now trading at less than $30, down more than 50% from its peak shortly after launch. The $MELANIA token has plunged more than 80% from its high, and is currently trading below $2.50.

Meme coins are subject to a multi-year calendar, ensuring that most tokens cannot be liquidated at once. No token sale, first Coinbase Conor Grogan is an executive and crypto analyst it calculates that The Trump team still generated $58 million in trading fees on the first day.

Skepticism isn’t limited to meme coins.

In Trump’s executive order on Thursday, the president failed to direct the U.S. to begin buying bitcoin directly and hold it as a reserve.

Prior to the order, Binance CEO Richard Teng he told CNBC in Davos He predicted that the US would establish a strategic bitcoin reserve. Circle CEO Jeremy Allaire called it “prudent” for central banks to hold reserves in bitcoin.

Trump floated the idea on the campaign trail, suggesting that a U.S. bitcoin reserve could be backed by crypto assets seized by hackers and fraud rings, a proposition that remains under scrutiny.

But in his 1,300-word executive order on Thursday, Trump stopped short of calling for a bitcoin reserve. The word Bitcoin was nowhere to be found.

— CNBC’s Ryan Browne contributed to this report.