Crypto promoters saw Trump as savior. Then reality set in

With Donald Trump's election as president, the cryptocurrency community saw blue skies ahead.

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DAVID RYDER Bloomberg

PRESIDENT TRUMP in October pardoned Changpeng Zhao, founder of the crypto exchange Binance.

The election sent the price of bitcoin to a record high, exceeding $75,000. After all, during the campaign Trump had vowed to make the U.S. the “crypto capital of the planet” and to create a “strategic reserve” of bitcoin. He and his family members formed World Liberty Financial, a crypto trading firm.

Within three days of his inauguration, Trump issued an executive order promoting the expansion of crypto in the U.S. He denigrated enforcement efforts by the Biden administration as reflecting a “war on cryptocurrency.”

On the second day of his presidency, he pardoned Ross Ulbricht, the boss of a notorious online black market in which transactions were conducted in crypto. Ulbricht, who had become something of a hero to crypto promoters, was serving two life sentences at the time. In July, Trump signed the so-called GENIUS Act, which dilutes consumer banking protections involving stablecoins, a crypto token.

Last year, the FBI labeled crypto a hive of “pervasive” criminality. Under Trump, things are likely to get worse. Since Trump took office, the Securities and Exchange Commission has closed or deferred 18 cases or investigations related to cryptocurrency firms.

Yet despite all these tailwinds from the White House, federal agencies and a compliant Congress, cryptocurrencies are having one terrible year. The price of bitcoin closed at a record $124,752 on Oct. 10 but has since fallen to about $87,845. That’s a stomach-churning loss of almost 30% in just six weeks.