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Regulatory Chaos or Crypto Boom? Trump’s Next Move Could Change Everything

Writer's picture: Kelsie PapenhausenKelsie Papenhausen

Digital Asset Market: Cryptocurrencies, including Bitcoin, dipped as investor enthusiasm waned following President Donald Trump's inauguration. The "Official Trump" token and a meme token launched by First Lady Melania Trump both saw significant price drops. Bitcoin at $105K, while above its 24-hour low, fell from its pre-inauguration high of $109K, and the broader crypto market showed similar stagnation. Despite optimism about Trump's potential supportive policies for the cryptocurrency sector, his inauguration did not include concrete announcements, contributing to the market's dip.


In other news, Bank of America CEO Brian Moynihan suggested that the U.S. banking industry would support cryptocurrencies for payments if regulatory frameworks are established, highlighting a potential shift in approach influenced by President Donald Trump’s enthusiasm for digital currencies. While American banks have generally avoided facilitating retail crypto transactions, they have engaged in institutional trading. Despite criticism from industry leaders like JPMorgan's Jamie Dimon, Moynihan indicated that cryptocurrencies could become just another payment method alongside traditional options like Visa and Apple Pay.


  1. Macro Economics: U.S. consumers may face higher prices on everyday items like sneakers, T-shirts, beer, avocados, toys, chocolate, and cars due to potential new tariffs that President-elect Donald Trump might impose on imports from major trading partners such as China, Mexico, and Canada. While tariffs are seen as a strategy to boost U.S. manufacturing and job creation, they would likely lead to increased costs for retailers, which may pass these costs to consumers. Despite the lack of clear details on the proposed tariffs, retailers are concerned about their impact on household budgets in an already inflation-weary market. Public opinion shows mixed support for tariffs, with many anticipating higher consumer prices. Companies are preparing for various scenarios but await further clarity from the Trump administration. Experts warn that the tariffs could broadly affect many products, potentially impacting nearly every U.S. consumer and business.


  2. Equities: On Tuesday, the Dow Jones Industrial Average rose by 400 points, or 0.9%, as Wall Street interpreted President Trump's initial actions and comments regarding international trade as less aggressive than anticipated. The S&P 500 increased by 0.5%, and the Nasdaq Composite increased by 0.2%, with notable gains from 3M, Amazon, and Alphabet. Although Trump considered imposing 25% tariffs on Mexico and Canada due to border policies, he issued only a memorandum to review foreign trade policies without enforcing new tariffs, suggesting a softer stance. This alleviated some investor concerns about potential inflation from broad tariffs. Outside of trade, Wall Street remains attentive to Trump's pro-business rhetoric, especially regarding deregulation that has previously buoyed banking stocks. In his inaugural address, Trump positioned his return as a new era of national growth while criticizing the Biden Administration and declaring an energy emergency to boost fossil fuel production.


  3. The Fed and US Treasury: Potential moves by the Trump administration, including tariffs on China and adjustments in banking regulations, contribute to an uncertain outlook for inflation and the Federal Reserve decisions on interest rates. Although the US economy shows resilience with strong job reports and rising oil prices, the Federal Reserve remains undecided on rate cuts. Based on current data, BlackRock's Gargi Chaudhuri suggests one to two more rate cuts might be reasonable. Meanwhile, banking stocks have experienced a rally, with shares rising due to expectations of lighter regulation under Trump. Bank executives express optimism about future sales and profits, with strong fourth-quarter results driven by investment banking and trading.


  4. Geopolitical: Donald Trump's return to the White House will further strain U.S.-China relations, especially with his anticipated cabinet of China hawks. However, there's a possibility that his transactional approach to diplomacy could lead to a surprising grand bargain with Xi Jinping, potentially called "soybeans on steroids." This could begin with punitive tariffs on Chinese imports to pressurize Beijing, followed by negotiations resulting in concessions that bolster Trump's image as a dealmaker. While this might offer short-term economic benefits, it risks alienating U.S. allies in Asia and emboldening China's regional ambitions, posing challenges to long-term strategic objectives. Nonetheless, Trump's unpredictability makes a reset in relations conceivable, offering unexpected developments on the geopolitical stage.


Overview of Trump’s Day One Actions

  1. Border and Immigration: Trump has issued 10 executive actions focusing on border security, including military deployment and border wall completion. Illegal immigration policies are reinstated, and birthright citizenship is contested, likely sparking legal challenges.

  2. Reducing Inflation: Trump signs a memorandum to tackle inflation, blaming regulatory policies for high costs. Emergency price relief measures include expanding housing, reducing healthcare costs, and abolishing climate policies that raise food and fuel prices.

  3. Trade and Tariffs: - Trump directs agencies to examine trade relationships, considering new tariffs on Canada, Mexico, and potentially China. Plans include establishing an External Revenue Service to collect tariffs, focusing on protecting U.S. jobs and industries.

  4. WHO Withdrawal: Trump withdrew the U.S. from the World Health Organization, ending the pandemic treaty negotiations and reversing Biden's action to rejoin the organization.

  5. Climate Pact Exit: Trump again withdraws the U.S. from the Paris Climate Agreement, prioritizing American energy independence over global carbon emission goals and criticizing China’s pollution.

  6. National Energy Emergency: Trump declared an energy emergency, opening Alaskan acres for fossil fuel development and reversing Biden's restrictions. He emphasizes fossil fuel use for economic prosperity.

  7. Inflation Reduction Act: Trump issues orders reversing Biden’s energy-related actions under the Inflation Reduction Act, aiming to dismantle its regulatory framework.

  8. End of EV Agenda: Trump rescinds targets for zero-emission vehicle sales, challenges California’s Clean Air Act waiver, and eliminates electric vehicle subsidies, arguing for consumer choice in the automobile market.

  9. Federal Bureaucracy, DOGE: Trump imposes a hiring freeze on federal bureaucrats to promote efficiency, establishing a Department of Government Efficiency led by Elon Musk for digital reform.

  10. No Government Censorship: An order prohibits federal censorship of free speech, directing the attorney general to report on previous administration abuses and banning federal funds supporting censorship initiatives.

  11. Exposing Abuse: Trump mandates federal record preservation to expose past political persecutions and abuses, directing probes into potential past government weaponization.

  12. Security Clearances Stripped: Trump revokes security clearances from over 50 intelligence officials, targeting election interference and directing reports to prevent future abuses.

  13. Pardons for Jan. 6: Trump pardons about 1,500 individuals connected with the Jan. 6 Capitol breach and criticizes Biden’s preemptive pardons, including top officials and family members.

  14. TikTok Reprieve: Trump gives TikTok 75 days to find a U.S. buyer to address national security concerns or face a ban, allowing its operation under American ownership.

  15. DEI Targeted: Trump ends federal programs based on factors like race and gender, opposing the DEI policies previously prioritized by the Biden administration and emphasizing merit-based systems.

  16. Two Sexes Policy: Trump establishes a policy recognizing only two biological genders, revoking gender identity-related efforts and reinforcing traditional definitions surrounding sex.

  17. Name Changes: Trump directs changes to rename Mount Denali back to Mount McKinley and the Gulf of Mexico to the Gulf of America, altering official U.S. records correspondingly.

  18. Non-Action Regarding Ross Ulbricht: Trump has not fulfilled his campaign promise to commute the founder of Silk Road’s two life sentences plus 40 years. Senator Rand Paul and a growing voice on X have urged the President to fulfill this crucial campaign promise.

View from our desk

Optimism from Trump’s inauguration pushed BTC to an all-time high of $109K, along with substantial gains across broader markets. Although some negativity arose from the absence of crypto references in his Day One executive orders, it may be premature to expect significant crypto-specific actions so early in his term. Clarity on Trump’s approach should emerge in the weeks ahead, particularly given that both the President and First Lady have direct ties to crypto—an encouraging signal of his commitment to the industry.


A key move the president can make is to resolve regulatory uncertainties by guiding agencies such as the SEC and OCC to adopt clear, consistent frameworks. This would bolster investor confidence and set the stage for broader institutional adoption. With crypto already on the administration’s radar, the market is eager to see how Trump’s policies unfold as his term progresses.


Meanwhile, the financial sector is reacting positively to Trump’s renewed stance on tariffs. Rather than issuing a sweeping executive order on Day One, he has directed agencies to “examine” current trade relationships. The proposed External Revenue Service, intended to oversee tariff collection, could be pivotal. Unlike his previous term, Trump appears focused on leveraging tariffs more strategically to protect U.S. jobs and industries—though using tariffs alone to address these challenges remains a complex endeavor.

Happy Trading!


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