Author: LoongDao

Foreword

Recently, a draft of an "executive order supporting cryptocurrencies" allegedly drafted by the Trump team has unexpectedly leaked, quickly causing a stir in the market. The draft proposes: in the future, the plan to include cryptocurrencies in the US strategic reserve may prioritize cryptocurrency projects that are established in the US and supported by US institutions, such as XRP, SOL, and USDC. As soon as the news came out, XRP and SOL saw significant short-term increases, sparking heated discussions in the market.

It is worth noting that shortly after the exposure of this draft executive order, when Trump took office, Trump himself also announced the issuance of a token called "TRUMP" on Twitter, promoting the "very special Trump community" and celebrating the "victory" of everything we represent. The market's interpretation of Trump personally "issuing a token" is quite heated: some believe this is a signal of "deeper binding of politics and the crypto circle", while others question whether this will lead to greater regulatory controversies.

Reviewing Trump's repeated "open support" for cryptocurrencies during the election campaign, his proposed "Ten New Crypto Policies" also became an important factor in attracting a large number of crypto enthusiasts. Since his successful election until now, Trump has been gradually fulfilling his promises: for example, appointing Musk as the head of the "DOGE" government efficiency department, appointing David Sachs as the White House's cryptocurrency affairs officer, and appointing Paul Atkins as the new SEC chairman. These personnel changes strongly signal that the Trump 2.0 government is very likely to "fully embrace" cryptocurrencies at the policy level.

So, what exactly do the "Ten New Crypto Policies" include? How do they coordinate with Trump's new personnel appointments? And what impact will they have on the cryptocurrency ecosystem in the US and globally? This article will start from the current state of the US economy, analyze why Trump chose cryptocurrencies as a "breakthrough" under the pressure of trade deficits and debt crises, and explore the investment opportunities hidden in this wave of cryptocurrency globalization, providing readers with a more comprehensive "Trump Crypto Economic Framework" perspective.

(The following content is based on currently available public information, speculating and analyzing the development of US politics and cryptocurrencies before 2025, and is not an established fact.)

1. Trade Deficit + Debt Crisis

1.1 Starting from the "Reagan Cycle"

Source: MacroMicro.com

To understand the Trump 2.0 era's preference for cryptocurrencies, we need to first review the "old problems" that have long existed in the US economic structure - trade deficits and debt crises.

After World War II, the United States, with the advantage of being a victorious country and its strong strength, used the "Marshall Plan" to extensively inject the US dollar (then pegged to gold under the Bretton Woods system) into European countries, helping these war-torn economies rebuild, and also firmly established the relationship between the US and its allies. However, as Europe gradually recovered, countries were unwilling to continue accepting the fixed exchange rate system and began to exchange the US dollars they held for more value-preserving gold, leading to a continuous outflow of US gold reserves. Eventually, in the 1970s, the US dollar was completely decoupled from gold.

During the Reagan era (the 1980s), to consolidate the hegemonic position of the US dollar, the US adopted a policy of "large-scale tax cuts, increased defense spending, and high interest rates", establishing a global dollar circulation system, commonly known as the "Reagan Cycle":

1. High interest rates attract global capital inflows to the US, with investors purchasing US debt and other dollar assets to obtain high returns;

2. The large influx of capital leads to an appreciation of the US dollar, making US imports cheaper;

3. The rising prices of export goods lose their competitiveness, and the trade deficit continues to widen;

4. These trading partners then recycle the acquired dollars back to the US by purchasing US Treasuries and other means, supporting the US fiscal deficit and consumption.

Source: HUATAI SECURITIES RESEARCH

This cycle has established the strong position of the US dollar in the international arena, but has also sown the seeds of continuously expanding trade deficits and US debt crises.

Source: Department of the Treasury

This cycle has continued for nearly 50 years, and the rapid accumulation of federal debt, coupled with the rise in debt interest rates (relative to the past decade or so), has increased the borrowing costs of the federal government. In fact, as of December 2024, the amount of interest payments on the national debt is higher than in previous years. Interest costs have already become the third largest expenditure category for the federal government, 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 Deficits

Source: MacroMicro.com

According to the US Department of Commerce's statistics over the years, China is currently the largest source of the US trade deficit, and has thus become one of the largest creditors of the US. After 2018, Trump launched a trade war with China, hoping to reduce the deficit by raising tariffs, but overall the US still maintains a relatively high trade deficit. For the Trump government in 2025, how to reduce the trade deficit remains a major issue.

1.3 Trump's "Two-Pronged Approach" and "Seeking New Paths"

The Trump administration's main ideas for reducing the trade deficit are:

1. Cost-cutting: Raise tariffs to reduce imports

2. Revenue-generating: Increase exports

However, after implementing the tariff war, other countries will also impose higher tariffs on US products, which may backfire. To this end, Trump 2.0 will still adopt measures such as "reducing corporate taxes" to attract manufacturing and service industries to return to the US. But corporate tax cuts alone are not enough, and a new set of tools is needed to ensure that the production that returns to the US can be smoothly exported.

This time, Trump has chosen cryptocurrencies.

2. "Ten New Crypto Policies": From Separation to Construction

From Trump 2.0's economic policies, it is not difficult to see his continuation of the "Reagan model": using some kind of US dollar substitute or US dollar external circulation tool to consolidate the US's global financial position. The difference is that during the Reagan era, the US mainly relied on US Treasuries, while Trump is trying to vigorously promote cryptocurrencies to create a new global economic cycle.

Reviewing the "Ten New Crypto Policies", they can be summarized into three main lines: "separation, development, and construction":

2.1 Separation

1. Stop the "crackdown" on cryptocurrencies

Immediately after taking office, Trump fired the previous SEC chairman Gary Gensler and appointed a more lenient regulator, ending the frequent law enforcement actions against cryptocurrency companies and making the regulatory environment more friendly to blockchain companies.

2. Terminate the US's illegal suppression of the crypto industry

The Trump administration will stop the previous government's frequent crackdowns and harassment of cryptocurrency companies, and create a more open and friendly regulatory environment.

2.2 Development

3. Establish a "crypto-friendly" government agency

Trump will establish a new government agency dedicated to the development of cryptocurrencies and blockchain technology, with the goal of making the US the most "crypto-friendly" country in the world.

4. Provide tax incentives for crypto companies

The Trump administration will introduce various tax incentives to attract more cryptocurrency and blockchain companies to set up operations in the US.

5. Promote the use of cryptocurrencies in government and the military

The US government and military will actively explore the use of cryptocurrencies and blockchain technology in various fields such as payments, logistics, and data management.

2.3 Construction

6. Establish a US-based "national cryptocurrency"

The Trump administration will work with major US financial institutions and technology companies to create a new "national cryptocurrency" that is pegged to the US dollar and supported by the US government.

7. Incorporate cryptocurrencies into the US strategic reserve

The US will include certain cryptocurrencies, such as XRP, SOL, and USDC, in its strategic reserves, giving them the status of "national digital assets".

8. Promote the global use of the US-backed cryptocurrency

The Trump administration will actively promote the use of the new US-backed cryptocurrency in international trade and finance, aiming to make it a global alternative to the traditional US dollar system.

9. Establish a "crypto-dollar" circulation system

The US will build a new global economic circulation system based on the "crypto-dollar", which will gradually replace the traditional US dollar-based system.

10. Appoint crypto-friendly personnel to key positions

Trump will appoint crypto-friendly figures to important positions in the government, such as the SEC, the Treasury Department, and the Federal Reserve, to ensure the smooth implementation of the new crypto policies.

Through these "Ten New Crypto Policies", the Trump administration aims to use cryptocurrencies as a new tool to address the long-standing problems of trade deficits and debt crises, and to consolidate the global dominance of the US dollar in a new way.

3. Investment Opportunities in the "Trump Crypto Economic Framework"

From the perspective of the "Trump Crypto Economic Framework", several potential investment opportunities can be identified:

3.1 US-Backed Cryptocurrencies

The new "national cryptocurrency" created by the US government, as well as cryptocurrencies like XRP, SOL, and USDC that are incorporated into the US strategic reserve, are likely to become the focus of global capital flows and see significant appreciation.

3.2 Crypto-Friendly US Companies

Companies that actively participate in the development of the US crypto ecosystem, such as major financial institutions, technology giants, and blockchain startups, are expected to benefit from the favorable policies and see their valuations rise.

3.3 Global Crypto Infrastructure

The construction of the new "crypto-dollar" global circulation system will drive the development of various crypto infrastructure, including exchanges, wallets, payment systems, and data services, which may become new investment hotspots.

In summary, the "Trump Crypto Economic Framework" represents a bold attempt by the US to use cryptocurrencies to address long-standing economic problems and consolidate the global dominance of the US dollar. Investors who can accurately grasp the direction of this policy shift may find promising investment opportunities in the rapidly evolving crypto landscape.

Ending the illegal crackdown by the United States on the crypto industry means that Trump may repeal the SAB 121 crypto asset accounting principle after taking office. SAB 121 is an accounting bulletin issued by the U.S. Securities and Exchange Commission (SEC) in 2022, requiring institutions that custody crypto assets to record them as liabilities and record corresponding assets. In actual implementation, this is almost equivalent to "prohibiting banks from custodying cryptocurrencies" because the banking system finds it difficult to price and disclose according to this rule.

If SAB 121 is repealed, traditional U.S. financial institutions can legitimately provide crypto custody services, providing users with a more convenient custody solution than hardware wallets and multi-signature wallets, which also means that the barriers between traditional finance and cryptocurrencies will be broken down.

3. Prevent the development of Central Bank Digital Currency (CBDC)

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 individual privacy. On the contrary, he emphasizes the need to uphold the public's right to self-custody digital assets, adhering to the principles of "decentralization" and "freedom".

4. Reduce the sentence of Silk Road founder Ross Ulbricht

Trump may "pardon" or significantly reduce the sentence of Ross Ulbricht, which is both a political gesture and a symbol of the re-recognition of the original "libertarian" values of cryptocurrencies. At the regulatory level, this may also provide more legal space for the private use of cryptocurrencies.

2.2 Development

1. Establish a BTC strategic reserve

The Trump administration is inclined to transform the BTC currently held by the United States (including the portion confiscated by law enforcement) into a national strategic reserve, further solidifying the status of "BTC as digital gold". BTC has increasingly been seen by institutions and investors as an asset that is resistant to inflation and risk. If a world power like the United States officially incorporates BTC as a reserve, both allies and competitors may rush to follow suit.

2. Prevent the government from selling BTC

In line with the "establishment of a strategic reserve", Trump hopes to prevent the U.S. government from selling the BTC it holds on the market, in order to stabilize the "official recognition" of BTC. This will undoubtedly become an important factor in pushing up the price of BTC.

3. Use cryptocurrencies to address debt issues

The U.S. government may incorporate the confiscated BTC or other crypto assets into fiscal means, using them to pay a portion of the interest on government debt, thereby easing the government's debt burden. The federal government's interest expenditure is expected to exceed $880 billion in 2024 (3.1% of GDP). If digital assets like BTC can participate in fiscal operations, it means that cryptocurrencies have the opportunity to enter the realm of national-level fiscal tools.

Sources:Congressional Budget OfficeandOffice of Management and Budget

3.3 Construction

1. Make the United States a BTC mining powerhouse

Attract mining companies to set up operations in the U.S. through measures such as lowering energy costs and providing tax incentives, in order to control a higher proportion of global BTC computing power.

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

This act may clarify the regulatory boundaries between the SEC and CFTC on cryptocurrencies, and strengthen information disclosure requirements. If Trump leans towards classifying most cryptocurrencies as "commodities" rather than "securities" under CFTC jurisdiction, it will make it easier for U.S. domestic companies to issue tokens and go overseas. Once the tokens are purchased by overseas users, it is equivalent to the U.S. obtaining "export revenue", which can help reduce the trade deficit.

3. Accelerate the construction of a stablecoin system

The Trump administration plans to allow compliant stablecoin issuers to directly access the Federal Reserve payment system, achieving faster settlement and lower costs, further expanding the transaction advantages of the U.S. dollar globally.

3. On the eve of taking office: Trump tweets a coin

On January 17, 2025, Trump announced the launch of a cryptocurrency called $TRUMP on his social media platform. The token price soared over 240 times in just 24 hours, with a total market capitalization skyrocketing from zero to $45 billion. Trump holds 80% of the token supply through his company CIC Digital LLC, meaning his personal net worth may have increased by tens of billions of dollars. As we mentioned earlier, the U.S. is facing challenges from trade deficits and the debt crisis, so the U.S. needs to "make its own money". Trump's token issuance provides a reference for Wall Street institutions and global financing institutions, with on-chain efficient financing officially challenging traditional web2 financing methods. Combining the characteristics of the Trump 2.0 administration, the future $TRUMP may be used as a planning tool for government finances or a buffer for the cost of U.S. debt interest.

Sources:X

4. From Twitter to the White House: Building a Dual Engine of Cryptocurrencies and Technology

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

4.1 Establishment of D.O.G.E. (Government Efficiency Department)

On November 12, 2024, Trump announced the establishment of the "Government Efficiency Department" (D.O.G.E.), to be led by tech giant Musk and young politician Vivek Ramaswamy, with the aim of reducing government bureaucracy, streamlining regulations, and cutting wasteful spending. Musk's love for DOGE is well known, fueling market speculation that "Dogecoin may receive special support".

4.2 Appointment of David Sacks as White House AI and Cryptocurrency Affairs Coordinator

Sources:X

On December 5, 2024, Trump announced a major appointment on social media: former PayPal COO David Sacks will be responsible for the White House's AI and cryptocurrency affairs. Sacks is a long-term supporter of Solana and has also invested in the crypto fund Multicoin Capital, with close ties to Musk from their PayPal days. This move signals that the integration of the blockchain and AI industry chains will receive increased attention.

4.3 Paul Atkins appointed as SEC Chairman

Sources:X

On December 5, 2024, Trump officially nominated former SEC Commissioner Paul Atkins to serve as SEC Chairman. Atkins has a relatively open attitude towards digital assets and has long advocated for balancing market transparency and investor protection. The arrival of the new SEC Chairman will undoubtedly further promote the compliance and institutionalization of cryptocurrencies.

5. The Combination of Technology and Cryptocurrencies: Driving U.S. Exports

From these new appointments, we can see that Trump 2.0 attaches great importance to the integration of "blockchain + AI", which is directly related to the macro goal of increasing "open source" exports.

At the current stage, AI companies represented by OpenAI generally have problems with high cost inputs and unclear profitability models. In 2024, OpenAI's total revenue was $4 billion, but it ended up losing $5 billion. The main source of revenue is the monthly subscription fees from ChatGPT's paying users. Although the paid subscription revenue of ChatGPT has 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 model, such as:

1. Assuming that OpenAI issues its own token, users will need to purchase this token to access AI services such as ChatGPT;

2. Global users will need to exchange US dollars or other fiat currencies to purchase the tokens in order to use these services;

Once this model is widely implemented, every global token purchaser will be equivalent to exporting services to the US and paying "foreign exchange", thereby bypassing many tariffs and regulatory barriers, and helping the US form a new digital product export.

6. Unrestricted Global Trading of Crypto Assets: An Alternative Breakthrough in the Context of Deglobalization

In the current climate of rising anti-globalization sentiment, many countries (such as China and India) have strict foreign exchange controls, which pose significant obstacles to traditional foreign trade. The characteristics of cryptocurrencies, however, are cross-border free circulation, not subject to the traditional SWIFT system or banking regulations. This natural advantage of "decentralized finance" has opened up a new global trading channel for the Trump 2.0 government. With sufficient policy support, the US's first-mover advantage in the cryptocurrency field may be further expanded.

7. Investment Opportunities and Risk Warnings

7.1 Investment Opportunities

1. Focus on projects led by American teams or companies

The Trump government is clearly inclined to support "Made in America" blockchain projects, such as XRP, SOL, and USDC. Related projects that can reach cooperation with the White House, consortia, and financial institutions may enjoy convenience in terms of regulation, compliance, and bank custody.

2. Pay attention to tokens included in the Trump "whitelist" (such as WLFI)

The DeFi project World Liberty Financial (WLFI) and its token list supported by the Trump family are also a potential track. However, it should be noted that such projects often have "policy bias" risks, and if the political direction changes, the projects may also face compliance risks.

3. Focus on endorsement from large compliance institutions

In a more friendly regulatory environment in the US, traditional financial giants or compliant platforms such as Coinbase, Grayscale, and BlackRock are still important weathervanes. Crypto projects supported by them are usually more stable.

4. Don't ignore MEME culture

Trump and Musk both strongly advocate "community libertarianism" on social media, which is in line with the spirit of MEME coins like Dogecoin (DOGE). As the leader of MEME coins, DOGE has the potential to surge in any policy or social media hot spot event.

7.2 Risk Warnings

Regulatory changes: Although Trump is in charge, there are still different interest groups in the US Congress, Treasury, Federal Reserve, and Department of Justice, and policy advancement is not smooth sailing.

Market volatility: The cryptocurrency market has always been highly volatile, and any unexpected events (black swans or macroeconomic policy changes) can trigger a price crash.

8. Conclusion

Under the dual pressure of government debt and trade deficits, the US urgently needs to expand its export-oriented income, and Trump 2.0's "overtaking on the curve" strategy of cryptocurrencies is both a new attempt at the integration of finance and technology, and may also become another tool in its international financial game.

However, any grand plan faces real constraints: the political struggle within the US and the vested interests of traditional financial institutions, the international community's vigilance against the US's "hegemony", and the high risks and regulatory challenges of the crypto market itself, all add great uncertainty to this "crypto revolution". Regardless of the eventual outcome, the most important thing is - in this policy reshaping and technological change, maintain rationality, actively follow up on regulatory and information changes, so as to make wiser investment decisions in the midst of opportunities and risks.

Disclaimer: Readers are strictly required to comply with the laws and regulations of their respective jurisdictions. This article does not represent any investment advice.