Crypto News

Why Bitcoin and Crypto Could Rally After Trump’s Regulatory Reforms

Donald Trump’s potential reforms to cryptocurrency regulations have sparked optimism across the crypto market. With his inauguration only days away, the former president’s team has been actively engaging with industry leaders to revamp policies affecting digital assets. Below, we delve into why these proposed changes could fuel a rally in Bitcoin and altcoins.

Trump’s Administration Promises Pro-Crypto Reforms

The transition team has hinted at sweeping regulatory changes for the crypto industry. These reforms could address controversial policies and create a more favorable environment for cryptocurrencies.

Key Reforms on the Horizon

Overturning SAB 121
SAB 121, a policy requiring entities to classify digital assets as liabilities, has faced industry-wide criticism. Trump’s administration is expected to repeal this regulation, removing significant barriers for businesses holding cryptocurrencies.
Support for the Financial Innovation & Technology for the 21st Century Act (FIT21)
The FIT21 Act offers a clear framework for digital asset regulation and aims to establish a balance between oversight and innovation. Trump’s team has expressed interest in advancing this bill to provide clarity and support for the crypto market.

A Strategic Reserve for US-Based Cryptocurrencies

Reports suggest Trump is considering a first-ever crypto reserve for US-native tokens such as XRP, Solana, and USDC. This move would mark a significant step toward recognizing and supporting these projects on a national level.

Impact on XRP, Solana, and USDC

XRP and Solana saw significant price increases—15% and 7%, respectively—following the news.
A strategic reserve could enhance market stability for these tokens, attracting institutional investors.

Bitcoin’s Role in Trump’s Regulatory Plans

While US-based tokens appear to be the primary focus, Bitcoin’s future under Trump remains uncertain. Concerns have been raised about whether his administration will prioritize Bitcoin or leave it in a regulatory gray area.

Potential Market Scenarios

Positive Scenario: If Trump delivers on his promise of a Bitcoin reserve or supportive policies, Bitcoin could soar past $90,000 in Q1 2025.
Negative Scenario: Delayed action or broken promises could lead to a 15–20% dip in Bitcoin prices, according to industry analysts.

Industry Reactions to Trump’s Reforms

The crypto industry has largely welcomed Trump’s plans, viewing them as a potential turning point after years of restrictive policies.

Gracy Chen, CEO of Bitget, Comments:

"The first 50 days of Trump’s presidency will be critical for Bitcoin’s trajectory in 2025. Significant action will be necessary to stabilize the market and fulfill the administration’s promises."

Hashdex Group’s Statement:

"Trump’s support for the FIT21 bill could fast-track global acceptance of cryptocurrencies and intensify crackdowns on non-compliant businesses."

Altcoin Rally Gains Momentum

Optimism surrounding Trump’s policies has already triggered early rallies among altcoins. Investors have shifted focus to projects like XRP and Solana, anticipating favorable conditions for their growth under the new administration.

Concerns Amid Optimism

While the market buzzes with hope, there are concerns over the execution of these reforms.

Delays or lack of follow-through could harm the market.
Overregulation might stifle innovation, countering the intended benefits of the reforms.

Conclusion

Donald Trump’s proposed regulatory reforms could mark a pivotal moment for Bitcoin and the broader crypto market. By addressing policies like SAB 121 and supporting legislation like FIT21, his administration could foster innovation and market growth. However, the first months of his presidency will be critical in determining whether this optimism translates into real gains for the industry.