Preface

Recently, a draft of an "executive order supporting cryptocurrency" allegedly drafted by the Trump team was accidentally leaked, which quickly caused an uproar in the market. The draft proposed that in the future plan to include cryptocurrencies in the US strategic reserve, priority may be given to cryptocurrency projects that were founded in the United States and supported by US institutions, such as XRP, SOL, and USDC. As soon as the news came out, XRP and SOL both rose significantly in the short term, sparking heated discussions in the market.

It is worth noting that shortly after the draft of the executive order was exposed, Trump himself announced on Twitter the issuance of a token called "TRUMP" when he took office, promoting the "very special Trump community" and celebrating all the "victories" we represent. The market's interpretation of Trump's personal "coin issuance" is quite enthusiastic: some people think this is a signal of "deeper ties between politics and the cryptosphere", while others question whether this will trigger a wider range of regulatory disputes.

Looking back at Trump's "open" support for cryptocurrencies during the election, his "Ten New Cryptocurrency Policies" have also become an important factor in attracting a large number of crypto fans. Since his successful election, Trump has been fulfilling his promises step by step: for example, he appointed Musk as the head of the "DOGE" government efficiency department, appointed David Sachs as the head of the White House cryptocurrency affairs, and appointed Paul Atkins as the new SEC chairman. These personnel changes reflect a strong signal: Trump 2.0 government is very likely to "fully embrace" cryptocurrencies from a policy level.

So, what exactly does the "Ten New Cryptocurrency Policies" include? How do they work with Trump's new personnel appointments? And what impact will it have on the cryptocurrency ecosystem in the United States and even the world? This article will start with the current state of the U.S. economy, analyze why Trump chose cryptocurrency as a "breakthrough" under the pressure of trade deficits and national debt crises, and explore the investment opportunities hidden in this wave of cryptocurrency globalization, providing readers with a more comprehensive perspective on the "Trump Cryptocurrency Economic Framework."

(The following content is based on current public information and is a speculation and analysis of the development of US politics and cryptocurrency around 2025. It is not a fait accompli.)

1. Trade deficit + national debt crisis

1.1 Starting from the “Reagan Cycle”

 Source:MacroMicro.com

To understand Trump 2.0’s preference for cryptocurrencies, we must first review the long-standing “old problems” in the U.S. economic structure—trade deficits and the national debt crisis.

After World War II, the United States, relying on its advantages as a victorious country and its strong power, imported a large amount of US dollars (the Bretton Woods system, which was linked to gold at the time) into European countries through the "Marshall Plan" to assist the reconstruction of these war-torn economies, while also strengthening the relationship between the United States and its allies. However, as Europe gradually recovered, countries were no longer willing to accept the fixed exchange rate system and exchanged their US dollars for gold, which was more valuable, resulting in the continuous loss of US gold reserves. Finally, in the 1970s, the US dollar was completely decoupled from gold.

In the Reagan era (1980s), in order to consolidate the hegemony of the US dollar, the United States adopted a policy of "substantial tax cuts, increased defense spending, and high interest rates" and built a global dollar circulation system, which is often called the "Reagan Great Cycle":

1. High interest rates attract global capital to flow into the United States, and investors buy U.S. Treasury bonds and other dollar assets to obtain high returns;

2. Large capital inflows lead to an appreciation of the dollar, making US imports cheaper;

3. Rising export prices have made them less competitive, and the trade deficit has continued to expand;

4. These trading partners will then return the dollars they obtain to the United States by purchasing U.S. bonds and other means to support the U.S. fiscal deficit and consumption.

 Source:HUATAI SECURITIES RESEARCH

This cycle has established the strong position of the US dollar in the international arena, but it has also laid the hidden dangers of an ever-widening trade deficit and US debt.

 Source:Department of the Treasury

This cycle has continued for nearly 50 years, and the rapid accumulation of federal debt, combined with rising interest rates on the debt (relative to the past decade or so), has pushed up the federal government's borrowing costs. In fact, as of December 2024, interest payments on the national debt are higher than in previous years. Interest costs are already the third largest category of federal government expenses, exceeding spending on Medicare, income security, Medicaid, and veterans' benefits and services.

 Source:Department of the Treasury

1.2 China: The largest source of US trade deficit

 Source:MacroMicro.com

According to statistics from the U.S. Department of Commerce over the years, the largest trade deficit of the United States currently comes from China, making China one of the largest creditor countries of the United States. After 2018, Trump launched a trade war against China, hoping to reduce the deficit by raising tariffs, but overall the United States still maintains a fairly high trade deficit. For the Trump administration in 2025, how to reduce the trade deficit is still a major issue.

1.3 Trump’s “two axes” and “ another approach ”

The Trump administration has two main ideas for reducing the trade deficit:

1. Save money: increase tariffs and reduce imports

2. Open source: increase exports

However, after the tariff war, other countries will also impose higher tariffs on American products, which may be counterproductive. For this reason, Trump 2.0 will still adopt stimulus measures such as "reducing corporate taxes" to attract manufacturing and service industries to return to the United States. However, corporate tax cuts alone are not enough, and a new set of tools is needed to ensure that the production returning to the United States can be exported smoothly.

This time, Trump chose cryptocurrency.

2. “Ten New Cryptocurrency Policies”: From Cutting to Building

From Trump 2.0's economic policy, it is not difficult to see that it is a continuation of the "Reagan model": using some kind of dollar substitute or dollar external circulation tool to consolidate the United States' global financial position. The difference is that during the Reagan period, it was mainly based on U.S. debt, while Trump is trying to create a new world economic cycle by vigorously promoting cryptocurrencies.

Looking back at the "Ten New Cryptocurrency Policies", they can be summarized into three main lines: "cutting, development, and construction":

2.1 Cutting

1. Stop the crypto crusade

Within an hour of taking office, Trump fired former SEC Chairman Gary Gensler and appointed a more lenient regulator, ending frequent law enforcement actions against cryptocurrency companies and making the regulatory environment more friendly to blockchain companies.

2. End the illegal suppression of the crypto industry by the United States

Ending the illegal suppression of the crypto industry in the United States means that Trump may repeal the SAB 121 cryptocurrency accounting principle after taking office. SAB 121 is an accounting announcement issued by the U.S. Securities and Exchange Commission (SEC) in 2022, requiring institutions that hold crypto assets to record them as liabilities and record corresponding assets. This is almost equivalent to "banning banks from custodial cryptocurrencies" in actual implementation, because it is difficult for the banking system to price and disclose according to this rule.

If SAB 121 is repealed, traditional financial institutions in the United States can legitimately provide cryptocurrency custody services, providing users with more convenient custody solutions than hardware wallets and multi-signature wallets. It also means that the barriers between traditional finance and cryptocurrency will be broken down.

3. Blocking the development of central bank digital currencies (CBDCs)

Trump has repeatedly stated that he will not allow the government to issue CBDC, believing that this will give the government too much financial control and infringe on personal privacy. On the contrary, he emphasized the need to safeguard the public's right to keep digital assets on their own and adhere to the principles of "decentralization" and "freedom."

4. Reduce the sentence of Silk Road founder Ross Ulbricht

Trump may grant Ross Ulbricht a "pardon" or a substantial sentence reduction, which is both a political gesture and a symbol of a re-identification of the original "libertarian" values of cryptocurrency. At the regulatory level, it may also provide more legal space for the private use of cryptocurrency.

2.2 Development

1. Establish a strategic reserve of Bitcoin

The Trump administration is inclined to transform the Bitcoin currently held by the United States (including the part confiscated by law enforcement agencies) into a national strategic reserve, further implementing the status of "BTC digital gold". In the past decade, Bitcoin has been increasingly regarded by institutions and investors as an asset that resists inflation and risks. If a world power like the United States officially includes BTC in its reserves, both allies and competitors may follow suit.

2. Preventing governments from selling Bitcoin

In line with the "establishment of strategic reserves", Trump hopes to prevent the US government from selling its Bitcoin holdings on the market to stabilize the "official recognition" of BTC. This will undoubtedly become an important factor in pushing up the price of Bitcoin.

3. Using cryptocurrencies to deal with debt problems

The US government may include confiscated Bitcoin or other crypto assets in fiscal means to pay part of the national debt interest and reduce the pressure of government debt. In 2024, the federal government's debt interest expenditure exceeded 880 billion US dollars (3.1% of GDP). If digital assets such as Bitcoin can participate in fiscal operations, it means that cryptocurrencies have the opportunity to enter the category of national fiscal tools.

 Sources:Congressional Budget OfficeandOffice of Management and Budget

3.3 Construction

1. Make the United States a Bitcoin mining powerhouse

By reducing energy costs and offering tax breaks, mining companies are attracted to settle in the United States so that they can control a higher proportion of the global BTC computing power.

2. Promote the 21st Century Financial Innovation and Technology Act

The bill may clarify the regulatory boundaries of the SEC and CFTC on cryptocurrencies and strengthen information disclosure requirements. If Trump prefers to place most cryptocurrencies under the jurisdiction of the CFTC, it means that more tokens will be identified as "commodities" rather than "securities." This will create convenience for U.S. companies to issue tokens overseas. Once the tokens are purchased by overseas users, it is equivalent to the United States obtaining "export income", which will help reduce the trade deficit.

3. Accelerate the construction of a stable currency system

The Trump administration plans to allow compliant stablecoin issuers to directly access the Federal Reserve's payment system to achieve faster settlement and lower costs, further expanding the dollar's trading advantages around the world.

3. On the eve of his inauguration: Trump issued a coin on Twitter

On January 17, 2025, Trump announced the launch of a cryptocurrency called $TRUMP on his social media platform. The token price soared more than 240 times in just 24 hours, and the full circulation market value soared from zero to $45 billion. Trump holds 80% of the token supply through his company CIC Digital LLC, which means that his personal net worth may increase by tens of billions of dollars. As we mentioned earlier, the United States faces the challenges of trade deficits and the U.S. debt crisis, so the United States needs to "make money on its own." Trump's issuance of currency has given a reference to Wall Street institutions and global financing institutions. The high-efficiency financing on the web3 chain has officially challenged the traditional financing methods of web2. Combined with the characteristics of the Trump 2.0 government, the future $TRUMP may be used as a government fiscal planning or a mitigating agent for the interest costs of U.S. debt.

 Sources:X

4. From Twitter to the White House : Building a dual engine of cryptocurrency and technology

In addition to the "Ten New Policies", Trump's personnel arrangements also released a lot of signals:

4.1 Establish DOGE (Government Efficiency Department)

On November 12, 2024, Trump announced the establishment of the "Department of Government Efficiency" (DOGE), which will be jointly headed by technology giant Musk and young politician Vivek Ramaswamy, aiming to reduce government bureaucracy, streamline regulation, and cut wasteful spending. Musk's love for DOGE is well known, which has led to market speculation that "Dogecoin may receive special support."

4.2 Appointment of David Sacks as White House Chief of Staff for Artificial Intelligence and Cryptocurrency Affairs

 Sources:X

On December 5, 2024, Trump announced a major appointment on social media: David Sacks, former COO of PayPal, will be in charge of AI and cryptocurrency affairs in the White House. Sacks is a long-term supporter of Solana and has also invested in the crypto fund Multicoin Capital. He has a close relationship with Musk during the PayPal era. This move indicates that the opportunity for the integration of blockchain and AI industry chains will attract much attention.

4.3 Paul Atkins becomes SEC Chairman

 Sources:X

On December 5, 2024, Trump officially nominated Paul Atkins, a former SEC commissioner, as SEC chairman. Atkins has a relatively open attitude towards digital assets and has always called for maintaining market transparency and protecting investors. The arrival of the new SEC chairman will undoubtedly further promote the compliance and institutionalization of cryptocurrencies.

5. The combination of technology and cryptocurrency: boosting U.S. exports

From these new appointments, we can see that Trump 2.0’s emphasis on the integration of “blockchain + AI” is actually directly related to the macro goal of “open source” to increase exports.

At this stage, AI companies represented by OpenAI generally have problems with high cost investment and unclear profit model. OpenAI's annual revenue in 2024 is $4 billion, but in summary, it has lost $5 billion. The main source of income is the monthly subscription fees of ChatGPT's paying users. Although ChatGPT's paid subscription revenue is of a certain scale, it is far from enough to cover the huge R&D and cloud computing costs.

If cryptocurrencies are introduced into their business models, such as:

1. Assume that OpenAI issues its own tokens, and users need to purchase these tokens to call AI services such as ChatGPT;

2. In order to use these services, global users need to exchange tokens with US dollars or other legal currencies for payment;

Once this model is implemented on a large scale, every token buyer from around the world will be equivalent to exporting services to the United States and paying "foreign exchange", thereby bypassing many tariffs and regulatory barriers and helping the United States form new digital product exports.

6. Unrestricted global trading of crypto assets: an alternative breakthrough under anti-globalization

At a time when anti-globalization thoughts are rising, many countries (such as China, India, etc.) have strict foreign exchange controls, which poses a considerable obstacle to traditional foreign trade. The characteristic of cryptocurrency is that it can circulate freely across borders without being restricted by the traditional SWIFT system or bank controls. This natural advantage of "decentralized finance" has opened up new global trading channels for the Trump 2.0 government. With sufficient policy support, the United States' first-mover advantage in the field of cryptocurrency may be further expanded.

7. Investment opportunities and risk warnings

7.1 Investment Opportunities

1. Prioritize projects led by American teams or companies

The Trump administration is clearly inclined to support "Made in the USA" blockchain projects, such as XRP, SOL, USDC, etc. If relevant projects can reach cooperation with the White House, consortiums, and financial institutions, they may be facilitated in terms of supervision, compliance, and bank custody.

2. Pay attention to the tokens included in Trump’s “white list” (such as WLFI, etc.)

The Trump family-backed DeFi project World Liberty Financial (WLFI) and its token list are also potential tracks. However, it should be noted that such projects often have "policy tendency" risks. If the political wind direction changes suddenly, the project may also face compliance risks.

3. Focus on endorsement by large compliance institutions

In the more friendly regulatory environment in the United States, traditional financial giants or compliant platforms such as Coinbase, Grayscale, and BlackRock are still important benchmarks. Crypto projects supported by them are usually more robust.

4. Don’t ignore meme culture

Both Trump and Musk strongly advocate "community liberalism" on social media, which coincides with the spirit of MEME coins such as Dogecoin (DOGE). As the leading MEME coin, DOGE has the possibility of a sharp rise in any policy or social media hot events.

7.2 Risk Warning

Regulatory changes: Although Trump is in the lead, there are still games among different interest groups within the U.S. Congress, the Treasury Department, the Federal Reserve, the judicial department, etc., and policy implementation is not smooth.

Market volatility: The cryptocurrency market has always been volatile, and any unexpected events (black swans or macro policy changes) can cause prices to plummet.

8. Conclusion

Under the dual pressures of national debt and trade deficit, the United States urgently needs to expand its export-oriented income. The cryptocurrency "overtaking on a curve" strategy chosen by Trump 2.0 is not only a new attempt to integrate finance and technology, but may also become another weapon in the international financial game.

However, any grand plan faces realistic constraints: the internal political struggles in the United States and the vested interests of traditional financial institutions, the international community's vigilance against the United States' "monopoly", and the high risks and regulatory difficulties of the crypto market itself have added huge uncertainties to this "crypto revolution". Regardless of the final outcome, the most important thing is to remain rational and actively follow regulatory and information changes in this policy reshaping and technological change, so that we can make more wise investment decisions in a time of opportunities and risks.

Disclaimer: Please strictly abide by the laws and regulations of your location. This article does not represent any investment advice.