Latest news with #USDigitalAsset
Mint
3 days ago
- Business
- Mint
Trump's crypto cheer lifts Bitcoin, but core risks still loom
The cryptocurrency faithful are having quite a moment. Donald Trump's return to the White House has brought a veritable cornucopia of pro-crypto promises, from talk of a 'Strategic Bitcoin Reserve" to declarations about making America the 'crypto capital of the world." Markets have reacted predictably: Bitcoin has surged past previous highs, and believers are treating this as ultimate vindication. Yet beneath the sheen of political legitimacy, nothing fundamental has changed about cryptocurrencies' essential nature. The irony in Trump's embrace of crypto is hard to miss. The proposed 'Strategic Bitcoin Reserve and US Digital Asset Stockpile" will apparently consist entirely of assets seized from criminals. In other words, the US government's official cryptocurrency holdings will be digital assets once used for ransomware, money laundering, drug trafficking, and other illicit activities. It's rather like announcing a strategic reserve of stolen goods as proof of their virtue. This detail neatly captures crypto's central problem. Despite all the technological sophistication and political endorsements, it remains the payment method of choice for criminals worldwide. Every major ransomware attack, dark web marketplace, and cross-border money laundering network gravitates to crypto for the same reasons enthusiasts celebrate it—anonymity, irreversibility, and freedom from traditional oversight. Political enthusiasm can't fix these structural flaws. Governments seeking to legitimise crypto are, in effect, blessing a system designed to bypass governmental authority. The contradiction is glaring: regulators tout an asset class while acknowledging that their strategic reserves will be filled mainly by seizing it from criminals. The ease with which fraud and theft occur in crypto remains staggering. Consider the 'socialised loss" strategy, where a major Indian exchange, after losing customer funds to hackers, decided everyone should share the pain, a perfect example of the Wild West ethos. When exchanges profit, it's capitalism; when they're robbed, suddenly everyone's a socialist. The frequency of such episodes would be comical if they didn't wipe out life savings. These aren't isolated mishaps or growing pains; they're built into a system that operates outside traditional financial protections. When a bank is robbed, deposit insurance protects you. When a crypto exchange is 'hacked", often a euphemism, you're on your own. The very decentralisation crypto champions means there's no safety net when things go wrong. Trump's enthusiasm also underlines another uncomfortable reality: an anti-establishment movement has been fully co-opted by the establishment it once vowed to disrupt. Wall Street, which Bitcoin was meant to circumvent, is now its biggest backer via ETFs and institutional products. The so-called revolutionary currency depends on the same traditional finance for its legitimacy. Political endorsement carries psychological weight. When governments and big institutions adopt a position, it creates an illusion of safety and permanence. Past crypto bubbles fed on tech mystique and get-rich-quick dreams; this cycle adds political validation, which could make it more dangerous for ordinary investors mistaking political backing for sound investment. For Indian investors, the temptation to chase this apparent legitimacy will be strong. Domestic taxation has curbed much local speculation, but political developments in the US could encourage some to seek workarounds. The 'don't miss out" narrative, wrapped in patriotic American rhetoric about financial dominance, could be persuasive. Yet the math hasn't changed. Crypto produces nothing, earns nothing, and represents no underlying asset. It serves no economic purpose that existing systems can't fulfil more efficiently. Its price is driven purely by speculative sentiment, whether fuelled by tech hype, celebrity endorsements, or presidential tweets. The most telling part of crypto's political embrace is how quickly its advocates abandoned anti-government principles in exchange for government approval. Those who once railed against fiat currencies and central banks now cheer politicians promising to hoard their preferred tokens. It's a striking shift from revolutionary idealism to conventional rent-seeking. Short-term price predictions are futile, speculative bubbles can inflate far beyond reason. But knowing what you're buying matters. Political theatre and presidential applause can't turn speculation into investment, gambling into wealth-building, or criminal infrastructure into legitimate finance. However much hot air gets pumped into this bubble, the fundamentals remain unchanged. Dhirendra Kumar is founder and chief executive officer of Value Research, an independent advisory firm. Views expressed are personal.
Yahoo
07-03-2025
- Business
- Yahoo
Trump's federal Bitcoin reserve order leaves the crypto market unenthused
With US stocks unstable, consumer confidence in the economy plunging and whispers of a potential recession growing less muted, the economy under President Donald Trump's second term has been about as stable as a recovering addict's first week back on blow. With that turbulence as a backdrop, the cryptocurrency industry hoped Thursday's executive order establishing a federal Bitcoin reserve would at least spur a surge in the blockchain ecosystem. Instead, Bitcoin's value has dropped sharply, and one crypto-focused hedge fund founder called Trump's order "the most underwhelming and disappointing outcome we could have expected for this week." After Trump posted in January that he would sign an executive order to establish a crypto stockpile, the market responded enthusiastically and prices rose accordingly. Bitcoin spiked to an all-time high of over $109,000 in January (after surpassing the $100,000 mark for the first time in early December). On Friday, at its lowest point following Trump's executive order, Bitcoin fell by around five percent to $85,000. It had recovered a bit at the time of publication but was still only hovering at around $88,000, a nearly 20 percent nosedive from its January high (and down over 2.2 percent on the day). Much of the underwhelming reaction stems from the reserve's use of shares already owned by the government through seizures or civil asset forfeitures. Although the order leaves the door open to possible government Bitcoin purchases in the future, White House crypto czar David Sacks clarified that the executive branch was only "authorized to develop budget-neutral strategies for acquiring additional Bitcoin, provided that those strategies impose no incremental costs on American taxpayers." See for yourself — The Yodel is the go-to source for daily news, entertainment and feel-good stories. By signing up, you agree to our Terms and Privacy Policy. That wasn't what the crypto bros were hoping for. "This is the most underwhelming and disappointing outcome we could have expected for this week," Charles Edwards, founder of the crypto-focused hedge fund Capriole Investments, posted on X (via Reuters). "No active buying means this is just a fancy title for Bitcoin holdings that already existed with the Govt. This is a pig in lipstick." In addition, the executive order also calls for a "US Digital Asset Stockpile" for other crypto tokens, which Trump has said will include Ether, XRP, Solana and Cardano. Crypto industry executives are holding a summit at the White House on Friday to, among other topics, get a better lay of the land regarding future regulatory enforcement. Among the attendees is Coinbase CEO Brian Armstrong, whose company was one of several that recently had enforcement cases dropped by Trump's SEC. (Convenient!) Reuters reports that analysts believe the market needs a reason to become bullish again, like a clearer pro-crypto regulatory policy or signs that the US Federal Reserve plans to cut interest rates. Trump successfully courted the industry in his 2024 campaign. In addition to pledging to create a federal crypto reserve, he promised to make America "the crypto capital of the planet" and fire SEC Chair Gary Gensler on day one. (In November, he announced he would resign the moment Trump took office on January 20.) The 47th US President also has a stake in crypto, which has set off alarms (if not blaring sirens) of potential conflicts of interest. First, he and First Lady Melania Trump have memecoins, currently down 80 and 90 percent, respectively, from their all-time highs right before his inauguration. Trump also has a stake in the crypto platform World Liberty Financial, which reportedly bought over $20 million worth of cryptocurrencies — including over $10 million in Ether, $9.9 million in Bitcoin derivative WBTC and $1.68 million in MOVE — ahead of Friday's White House summit.
Euronews
07-03-2025
- Business
- Euronews
Bitcoin falls as Trump's executive order disappoints crypto enthusiasts
By Tina Teng Bitcoin fell after US President Donald's executive order disappointed markets. The decline in cryptocurrencies mirrors the downtrend in the US stock markets amid fears of a widening global trade war. ADVERTISEMENT US President Donald Trump signed an executive order to establish a Strategic Bitcoin Reserve on Thursday, according to the White House Crypto and AI czar David Sacks, in a post on X. The move marks a major policy fulfillment by the US president, aligning with his campaign pledge to 'make America the crypto capital of the world.' Markets disappointed by Trump's order Despite initial anticipation, the announcement failed to provide Bitcoin with a significant boost. Bitcoin's price fell from above $90,000 (€83,290) to about $84,600 (€78,300) initially before rebounding to around $87,000 (€80,520) at 5 am CET. The order disappointed crypto enthusiasts as Sacks said in the post that the Reserve would be capitalised with Bitcoin owned by the federal government from criminal and civil forfeiture cases, and taxpayer money would not be used to acquire cryptocurrencies. 'The government will not acquire additional assets for the Stockpile beyond those obtained through forfeiture proceedings,' he stated. The statement also emphasised that the government will retain its existing 200,000 bitcoin holdings as a store of value:' The US will not sell any bitcoin deposited into the Reserve. It will be kept as a store of value,' and 'Premature sales of bitcoin have already cost U.S. taxpayers over $17 billion in lost value. Now the federal government will have a strategy to maximize the value of its holdings.' Trump's order also includes the establishment of a US Digital Asset Stockpile, 'consisting of digital assets other than Bitcoin forfeited in criminal or civil proceedings.' Bitcoin's correlation with risk asset Bitcoin surged last Sunday after Trump announced on the Truth Social that he would direct the Presidential Working Group to move forward on a Crypto Strategic Reserve that includes five digital tokens including Bitcoin, Ethereum, XPR, Solana, and Cardano. The post caused a short-lived rally in these cryptocurrencies, with Bitcoin rising to above $94,000 (€87,000) from about $86,000 (€79,600). However, the gains were erased the following day after Trump confirmed a 25% tariff on Canada and Mexico, along with an additional 10% levy on Chinese imports. Bitcoin has been in a retreat after hitting a new-time high of above $109,000 (€100,88) on 20 January, the day of Trump's inauguration. The world's largest cryptocurrency fell below $80,000 (€74,000) on 28 February, the lowest since November 2024, posting the worst month in three years. The downtrend mirrored the broad selloff in the US stock markets as Trump's tariffs spooked investors with fears of a widening global trade war, which will significantly slow down economic growth. Cryptocurrencies typically trade in tandem with traditional risk assets, particularly US technology stocks. Bitcoin is down 6% this year, closely aligning with the tech-heavily weighed index, Nasdaq's 6.4% year-to-date decline. 'Thus far this year, Bitcoin has proven more reactive to macroeconomic trends, including trade wars and interest rate trends. With large Wall Street firms now exposed to the coin, it is more susceptible to significant liquidity flows, thus contributing to its volatility,' Uldis Teraudklans, Chief Revenue Officer at Paybis wrote in a note.
