Crypto gets quick return on Trump investment after funding campaign

Crypto executives, businesses and investors are getting an early return on their investment in Donald Trump.

After pouring tens of millions of dollars into Trump’s 2024 campaign for president, the crypto industry was repaid in its first week in the White House.

“I don’t think they could have imagined a better result than they just had in the last 48 hours,” said Bill Gurley of Benchmark, known for an early bet on Ubertold CNBC “Close Bell” Friday. Gurley said that while Tech’s new found influence in Washington may be harmful to parts of the startup world, “it’s obviously good for crypto.”

Industry support for Trump was built on the Republican leader’s promise to end the government’s crackdown on crypto and implement regulations favorable to those who wanted to develop new types of payment technologies while easing restrictions on investments in cryptocurrencies.

Industry heavyweights like Jamming CEO Brian Armstrong and Binance CEO Richard Teng praise the start of a new era.

“You have to remember, over the last four years, we really felt like we were under attack by this administration,” Armstrong told CNBC at the annual World Economic Forum in Davos, Switzerland. Armstrong criticized the Biden White House for trying to “weaponize the lack of clarity in the rules,” even punishing companies that tried to be helpful.

“There were some bad actors too, to be fair,” Armstrong said. “But they even really tried to go after good actors, I think, like us.” Coinbase was a top corporate donor in the 2024 election cycle.

Bitcoin hit an all-time high of around $109,000 on Monday and hovered near $105,000 by the end of the week. That’s more than 50% since Trump’s election victory in early November.

The 48-hour stretch referenced by Gurley included a executive order signed by Trump on Thursday to promote the adoption of digital assets in the United States

Trump called on members of the Treasury, the SEC and the Commodity Futures Trading Commission to join forces in a task force to assess the potential for storing cryptocurrencies seized by the government.

The order outlined other key priorities, such as protecting Bitcoin miners and software developers from what the president called “persecution” and promoting staboins fishing in U.S. dollars, while banning a digital dollar from the Federal Reserve.

Venture capitalist David Sacks, whom Trump tapped to be the White House AI and crypto Czar, joined the president in the Oval Office for the signing of the order.

Later Thursday, the SEC made a historic announcement, withdrawing an accounting rule that made institutional crypto adoption more difficult by forcing banks to treat bitcoin and other tokens as a liability on their balance sheet.

The rule, known as SAB 121, was introduced in 2022 and subject digital assets to strict capital requirements. It has also increased the financial and regulatory risks of offering crypto custody services and increased operational costs for financial institutions.

Efforts to overturn SAB 121 gained bipartisan support in Congress last year. But then-President Biden vetoed the proposed legislation, leaving the rule intact, further discouraging banks from adopting digital assets beyond derivatives trading and offering exchange-traded funds to customers of heritage management.

The move was celebrated by SEC Commissioner Hester Peirce, who was tapped Tuesday to lead a new “crypto task force” within the agency.

“Goodbye, goodbye Sab 121! This is no fun,” she wrote in a Post on x.

Before the SEC’s announcement, Goldman Sachs CEO David Solomon told CNBC in Davos that from a regulatory perspective the bank could not own Bitcoin and would revisit the issue if the rules changed. The CEOs of Morgan Stanley and Bank of America also said that President Trump’s pro-Crypto tone could reshape their plans and potentially lead to expanded digital offerings.

A few days earlier, Gary Gensler stepped down from his role as SEC chairman. Gensler, who emerged as an adversary of the crypto industry, had defended the rule as necessary to protect investors in the event of a crypto company bankruptcy. Trump’s pick to succeed Gensler is former SEC Commissioner Paul Atkins, who is currently CEO of Patomak Global Partners.

Trump’s first big nod to the crypto industry as the president came earlier in the week and took a very different form.

On Tuesday, his second day in office, Trump issued a full pardon to Ross Ulbricht, the founder of Silk Road. Ulbricht, 40 out of seven fees which included Distribution of narcotics and conspiracy to commit computer hacking.

Silk Road operated from 2011 to 2013, serving as a dark web marketplace where users bought and sold a mix of contraband, including illegal narcotics like heroin. The platform facilitated over $200 million in salesaccording to federal prosecutors, and has been linked to the deaths of at least six people.

At its peak, Silk Road operated as a global drug bazaar, with transactions conducted largely in Bitcoin, making it one of the first large-scale applications of a cryptocurrency. Prosecutors later argued that the anonymity offered by Bitcoin was instrumental in letting silk road sellers hide their identities.

Ulbricht had become a cult hero of sorts in the crypto community and the “”Free Ross” The movement had taken on resonance among conservative media figures and politicians.

“I just called Ross William Ulbricht’s mother to let her know that in honor of her and the libertarian movement, which has supported me so strongly, I was pleased to have signed a pardon complete and unconditional love of his son, Ross,” Trump wrote In an article on Truth Social on Tuesday.

Changpeng Zhao, the billionaire co-founder and former CEO of Binance, commented on X with a clapping emoji after the pardon announcement. Zhao was sentenced to four months in prison in April, after pleading guilty to charges of enabling money laundering at his crypto exchange.

Not all of Trump’s actions over the past week have been universally praised by the crypto industry.

Most notably, the president has messed up a part of the market that is notorious for scams. Last weekend, while crypto heads and members of Trump’s family and inner circle partied at the Crypto Ball in Washington, $Trump meme coin takes off online.

Then came the Melania$ piece. Overall, the Trump family has made billions of dollars on paper due to their ownership of assets created out of thin air. Crypto enthusiasts fear this is a troubling sign of Trump’s real intent and damages the credibility of an industry trying to prove its legitimacy.

“Call me old-fashioned, but I think presidents should focus on running the country and not throw scam chips,” wrote Nic Carter of Castle Island Ventures, in a job on X.

THE website Car$Trump says 80% of the supply is held by the Trump Organization and affiliates.

Lawmakers also have objections.

Sen. Elizabeth Warren and Rep. Jake Auchincloss, both Democrats from Massachusetts, have raised concerns about the first couple using their positions for enrichment, as well as the potential for “Rug-Pull” scams.

“We write in depth about President Trump and First Lady Melania Trump’s decision to launch two MEME coins, $Trump and $Melania, which allow them to realize extraordinary profits from his presidency,” the couple said in a letter obtained by CNBC.com. “These coins do not create new payment rails that are faster, cheaper, and more secure. These coins do not help people borrow more affordably. They do not in any way improve the financial system for consumers.”

$Trump is now trading under $30, down more than 50% from its peak shortly after launch. The $Melania token has plunged more than 80% from its peak and is currently trading below $2.50.

MEME coins are subject to a multi-year vesting schedule, ensuring that the majority of tokens cannot be liquidated at once. Without selling tokens, former Coinbase executive and crypto analyst Conor Grogan believes that The Trump team still generated $58 million in trading fees on its first day.

Skepticism isn’t limited to meme pieces.

In Trump’s executive order on Thursday, the president did not direct the United States to begin directly purchasing Bitcoin and holding it in reserve.

Prior to the order, Binance CEO Richard Teng told CNBC in Davos that he anticipated the United States would establish a strategic Bitcoin reserve. Circle CEO Jeremy Allaire called it “cautious” for central banks to hold reserves in Bitcoin.

Trump had floated the idea on the campaign trail, suggesting a U.S. Bitcoin reserve could be backed by crypto assets seized from hackers and fraud rings, a proposal that remains under consideration.

But in his 1,300-word executive order Thursday, Trump didn’t just avoid calling for a Bitcoin reserve. The word bitcoin was nowhere to be found.

– CNBC’s Ryan Browne contributed to this report.