1. Introduction to Truth Social

Truth Social is a social media platform launched in 2021 by former U.S. President Donald Trump and his media company Trump Media & Technology Group (TMTG). The main goal of the platform is to provide a space for conservatives and their supporters to have ‘freedom of speech’ to counter the censorship of mainstream social media such as Twitter and Facebook.

Since the launch of Truth Social, its political nature and community activity have attracted widespread attention. At the same time, the global crypto market is at a critical juncture of policy adjustments and technological innovations, making it an important research topic whether Truth Social will have an impact on the cryptocurrency market.

2. Trump and cryptocurrency

2.1 Trump’s encryption currency position

2.1.1 Early Attitudes and Perspectives

In the early stages of cryptocurrency development, Trump had a clearly negative attitude towards it. In 2019, Trump publicly expressed doubts about cryptocurrencies through Twitter, stating ‘I am not a fan of Bitcoin and other cryptocurrencies, which are not money, have a high volatility, and come from nowhere. Unregulated crypto assets may foster illegal activities, including drug trade and other illegal activities.’ In his view, cryptocurrencies like Bitcoin lack stable value support and are completely ‘coming from nowhere’, with dramatic value fluctuations, making it difficult to fulfill the basic functions of currency. He emphasized that only the US dollar is truly reliable currency, and believed that cryptocurrencies pose a potential threat to the status of the US dollar. This viewpoint reflects his firm defense of the traditional monetary system and his distrust of emerging cryptocurrencies.

2.2.2 Key Nodes and Reasons for the Change in Position

Trump’s stance on cryptocurrency has undergone a significant change during the 2024 presidential campaign, from strong opposition to active support. The key turning point occurred after he announced his participation in the 2024 presidential campaign, especially in important events such as the ‘Bitcoin 2024 Conference,’ where he expressed support for cryptocurrency, proposed a series of policies to promote the development of American cryptocurrency, including making the United States the world’s cryptocurrency capital and a Bitcoin superpower, establishing a dedicated Bitcoin and cryptocurrency presidential advisory committee, designing transparent regulatory policies, and establishing a strategic Bitcoin reserve.

There are multiple reasons behind Trump’s change in position. From a political perspective, electoral interests are important factors. With the rapid development of the cryptocurrency market, the cryptocurrency industry in the United States has formed a significant political force, with numerous practitioners and investors. These groups have a certain influence on political decisions and hope that the government can introduce policies favorable to the development of cryptocurrencies. In order to gain the support of these voters and enhance his advantage in the election, Trump has started to adjust his attitude towards cryptocurrencies. For example, David Bailey, CEO of Bitcoin Magazin, who organized the Bitcoin 2024 conference, promised to raise $100 million in donations for Trump and mobilize over 5 million voters to support Trump, demonstrating the potential support of the cryptocurrency industry for Trump’s campaign.

Economic interests are also an important driver of Trump’s change in position. The Trump family’s business activities in the cryptocurrency field have been increasing, leading to a change in their attitude towards cryptocurrencies. After leaving office, Trump’s wife Melania announced plans to collect NFTs (which are essentially unique digital tokens of trusted ownership in blockchain networks), followed by Trump launching his own NFT series, which quickly sold out, earning millions of dollars. To date, his team has issued four rounds of NFT cards. In mid-September 2024, World Liberty Financial (WLF) was founded by Trump’s eldest son Donald Jr. and second son Eric, positioning itself as a banking platform for cryptocurrencies, encouraging the public to borrow, lend, and invest in cryptocurrencies, and planning to venture into DeFi (decentralized finance). These business interests have made Trump realize the huge potential of the cryptocurrency industry, leading to a change in his views on cryptocurrencies.

The change in the global financial landscape is also a key factor prompting Trump to change his position. With the digital transformation of the global economy, the importance of digital currency is increasingly prominent. The scale of the cryptocurrency market continues to expand, becoming an important part of the global financial market. At the same time, the position of the US dollar in the international monetary system is facing certain challenges, and the rise of emerging digital currencies has brought new opportunities and challenges to the US in the global financial competition. Trump sees the development prospects of the cryptocurrency industry, believing that the US cannot fall behind in this emerging field. By supporting the development of cryptocurrencies, the US can enhance its competitiveness in the global financial sector and safeguard its economic interests.

3. Trump’s encryption-related policy measures

3.1 Administrative Orders and Strategic Reserve Plan

3.1.1 The main content and objectives of the administrative order

On January 17, 2025, local time, Trump signed an executive order on digital assets, establishing a dedicated working group to study digital assets. The working group is composed of members from the Department of the Treasury, the Department of Justice, the Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC), and other departments. Its core task is to assess the feasibility of establishing a national digital asset reserve and to develop a clear regulatory framework for the encryption industry.

From the perspective of regulatory framework construction, the executive order aims to end the current confusion in the regulation of encryption currency. The long-standing problem in the US cryptocurrency market is the unclear responsibilities of regulatory agencies, with disputes between the SEC and CFTC over regulatory authority in the cryptocurrency market, making it difficult for market participants to comply. Trump’s executive order attempts to clarify the responsibilities of each regulatory agency and provide clear regulatory guidance for the cryptocurrency industry. For example, it stipulates that the SEC is mainly responsible for regulating the securities attributes of cryptocurrencies, while the CFTC focuses on regulating the commodity attributes of cryptocurrencies, to avoid regulatory overlap and gaps.

In establishing the national digital asset reserve, executive orders have multiple strategic objectives. On the one hand, including cryptocurrencies such as Bitcoin and Ethereum in the strategic reserve aims to enhance the United States’ discourse power in the global crypto market. With the rapid development of the crypto market, its position in the global financial system is becoming increasingly important. By establishing a digital asset reserve, the United States can take a leading position in shaping global cryptocurrency regulations and maintain its leadership position in the financial sector. On the other hand, the establishment of a digital asset reserve also contributes to the diversification of the U.S. financial system. Cryptocurrencies have unique technological and economic characteristics that complement traditional financial assets to some extent. Including them in the strategic reserve can diversify the types of U.S. financial assets, enhance the stability of the financial system, and increase its risk resistance.

3.1.2 Proposal and Planning of Strategic Reserve Plan

Trump’s proposed encryption currency strategic reserve plan is a core component of his encryption currency policy. According to Trump’s statement on social media, the strategic reserve will include a variety of cryptocurrencies such as Bitcoin, Ethereum, Ripple (XRP), Solana (SOL), and Cardano (ADA). The proposal of this plan has sparked widespread attention and discussion in the global financial market.

From a compositional perspective, Bitcoin and Ethereum, as the top two cryptocurrencies by market value, are identified as the core assets for reserves. Bitcoin, with its characteristics of decentralization and fixed supply, is known as ‘digital gold,’ possessing high value storage functions and global recognition; Ethereum, as the pioneer of smart contracts, has built a vast decentralized application ecosystem and holds a significant position in the development of blockchain technology. Utilizing them as core assets helps ensure the stability and representativeness of strategic reserves. The inclusion of other cryptocurrencies like Ripple, Solana, and Cardano reflects the diversification of strategic reserves. These cryptocurrencies have unique advantages in areas such as cross-border payments and high-performance blockchain applications. For example, Ripple’s efficiency and low cost make it suitable for the growing demand in global financial transactions; Solana’s high throughput and low latency attract numerous applications from emerging blockchain projects; Cardano focuses on the sustainability and scalability of blockchain technology, excelling in academic research and technological innovation.

In implementing the plan, the US government needs to address a series of technical and management challenges. In terms of security management, as cryptocurrencies are based on blockchain technology, the management of private keys is crucial. The government needs to adopt state-of-the-art encryption technology and security measures such as multi-signature to ensure the secure storage and usage of private keys, preventing asset loss due to private key theft or leakage. At the same time, establish strict access control and auditing mechanisms, real-time monitoring and recording of the operation of strategic reserves, and prevent internal staff from engaging in improper operations. In terms of asset allocation, it is necessary to reasonably determine the proportion of different cryptocurrencies in reserves based on market conditions and strategic objectives. The cryptocurrency market experiences significant price fluctuations, with different cryptocurrencies having varying price trends and risk characteristics. The government needs to dynamically adjust asset allocation through professional market analysis and risk assessment to achieve the preservation and appreciation of strategic reserves. In addition, consideration should be given to cooperation with the private sector, leveraging the professional capabilities of cryptocurrency exchanges, custody service providers, and blockchain technology companies to enhance the efficiency and operational level of strategic reserve management.

3.2 The driving force and impact of the White House cryptocurrency summit

On March 7, 2025, the White House cryptocurrency summit led by the Trump administration was held in Washington, D.C., USA. This summit attracted global attention from the cryptocurrency industry and was seen as a key milestone for cryptocurrencies to transition from marginal innovation to mainstream.

The purpose of this summit is very clear, aiming to demonstrate the Trump administration’s high attention to digital assets and the blockchain industry, further clarify the regulatory development direction of cryptocurrencies and blockchain, provide clear policy support for the industry, and maintain the leading position of the United States in the global digital economy competition. During his campaign, Trump promised to simplify the regulation of the cryptocurrency industry, support stablecoin frameworks, and proposed the idea of establishing a national reserve of Bitcoin. This summit is an important step in fulfilling his campaign promises.

The agenda of the summit covers multiple key topics that have a profound impact on the development of the cryptocurrency industry. On the discussion of regulatory frameworks, the aim is to address the longstanding regulatory uncertainties that have plagued the cryptocurrency industry. The U.S. Securities and Exchange Commission (SEC) adheres to the ‘Howey test’ principle, classifying the majority of tokens as securities, while companies like Coinbase require dynamic classification based on the actual use of tokens (such as governance, payments), leading to serious disagreements between the two parties. All parties at the summit engage in in-depth discussions on this matter, with the potential to drive regulatory agencies to clarify token classification standards, provide clear legal basis for the cryptocurrency market, reduce regulatory arbitrage opportunities, and promote compliant market development. In terms of stablecoin regulatory policies, stablecoins serve as an important link between cryptocurrencies and the traditional financial system, making their regulatory policies a topic of great concern. Circle (issuer of USDC) advocates placing stablecoin regulation ahead of central bank digital currencies (CBDCs) to avoid double impact on the U.S. dollar system. Discussions on stablecoin regulation at the summit may prompt governments to introduce more comprehensive stablecoin regulatory policies, standardize the issuance, trading, and operation of stablecoins, and safeguard financial stability.

Cryptocurrency strategic reserves are also one of the core topics of the summit. Trump’s plan to include Bitcoin, Ethereum, and other cryptocurrencies in the national strategic reserves has sent shockwaves through central banks worldwide. In-depth discussions on this plan at the summit will further clarify the implementation details and management model of strategic reserves, potentially attracting more institutional investors to enter the crypto market and enhancing the market position of cryptocurrencies. In addition, the summit also focuses on market structure and investor protection. The Digital Assets Working Group is expected to release survey results and recommendations on market structure, regulatory supervision, and investor protection, aiming to create a sound market environment and strike a balance between innovation and risk management, consumer protection, and enhance investors’ confidence in the cryptocurrency market.

The White House cryptocurrency summit has potential impacts on the cryptocurrency industry in various aspects. At the market level, the summit’s convening releases positive policy signals, boosts market confidence, and drives up cryptocurrency prices. Major cryptocurrencies such as Bitcoin and Ethereum experienced significant price fluctuations before and after the summit, reflecting the market’s high sensitivity to policy changes. In terms of industry development, the summit helps promote industry self-regulation and standardized development. Through direct dialogue between the government and industry leaders, regulatory requirements and industry standards are clarified, guiding cryptocurrency companies to strengthen compliance construction and promoting the healthy development of the industry. In the global competitive landscape, the summit showcases the United States’ positive stance in the cryptocurrency field, which may prompt other countries to accelerate the formulation and adjustment of cryptocurrency policies, intensify global competition and cooperation in the cryptocurrency market, and drive innovation and development in the global cryptocurrency industry.

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4. The Impact of Policies on the Cryptocurrency Market

4.1 Short-term market volatility response

Trump’s cryptocurrency-related policies have caused intense short-term fluctuations in the market. On March 2, 2025, local time, Trump announced his intention to include Bitcoin, Ethereum, Ripple, Solana, and Cardano in the new US strategic reserve for cryptocurrencies, which was like a bombshell in the cryptocurrency market. Data from the cryptocurrency trading platform Gate.io shows that hours after Trump’s announcement, the total cryptocurrency market capitalization rose by about 10%, with an increase of over $300 billion. The price of Bitcoin quickly surpassed $90,000, an increase of over 11%; Ethereum rose by about 13%, reaching $2516; Ripple broke through $2.93 per coin, up over 30%; Solana surpassed $178 per coin, with an increase of over 24% in a day; Cardano rose by nearly 72% in a day. The market presented a prosperous scene, with investors’ sentiment soaring and a large amount of capital pouring into the cryptocurrency market, driving prices soaring.

However, this upward trend did not last long. The market has many doubts about the policy details and implementation, coupled with macroeconomic concerns brought by Trump’s tariff policy, investor sentiment quickly changed. As of 11:30 on the 4th, Bitcoin has fallen by over 9% in the past 24 hours, trading at $83,986 per coin, and Ethereum has fallen by over 15% in the past 24 hours, trading at $2,056 per coin, both lower than before Trump’s post. Ripple and Solana have almost completely retraced the gains of the 2nd, and Cardano has also retraced most of its gains. Stocks related to cryptocurrencies were also hit hard, with cryptocurrency exchanges Coinbase and Robinhood falling by nearly 5% and 6% respectively, while MicroStrategy’s stock price turned from a 14% increase at the opening to a nearly 2% decrease at the closing. This significant fluctuation in a short period of time fully reflects the high sensitivity of the cryptocurrency market to policy news and the instability of the market.

4.2 Long-term Trends and Changes in Market Structure

From a long-term perspective, Trump’s policies may further promote the development and maturation of the crypto market. His proposal to establish a strategic reserve plan for cryptocurrencies demonstrates the US government’s recognition and support for the cryptocurrency industry, which will attract more institutional investors to enter the market. With the influx of institutional investors, the amount of funds in the cryptocurrency market will increase, market depth and liquidity will be enhanced, helping to stabilize cryptocurrency prices and reduce price fluctuations. For example, when there is a large amount of selling in the market, institutional investors, with their strong financial strength, can take over some of the sell orders, alleviate market pressure, and avoid excessive price declines.

In terms of the market structure, Trump’s policies may lead the United States to a more important position in the global encryption market. He plans to build the United States into the world’s capital of encryption and a superpower of Bitcoin by establishing a special presidential advisory committee for Bitcoin and encryption currencies, designing transparent regulatory policies, and providing a better development environment for the encryption currency industry. This will attract global encryption currency enterprises and projects to gather in the United States, enhancing the influence of the United States in encryption currency technological innovation, market size, and rule-making. At the same time, the positive attitude of the United States may trigger other countries to imitate, accelerate the development and competition of the global encryption currency market, and promote the popularization and application of the encryption currency industry globally.

In addition, Trump’s policies may also have an impact on the structure of the crypto market. The regulatory framework he proposed may encourage more regulation in the crypto market, leading to the elimination of some non-compliant projects and transactions, with the market paying more attention to the projects’ technical capabilities, use cases, and compliance. For example, strict regulations may require crypto projects to disclose more information, including technical principles, team backgrounds, fund flows, etc., which will help investors better assess the value of projects, choose high-quality projects for investment, and promote the market to develop in a healthier and more orderly direction.

5. the response and reaction of the cryptocurrency industry

5.1 Industry Support and Collaboration Performance

Trump’s shift in support for cryptocurrency has won widespread support and active cooperation from the cryptocurrency industry. Since announcing his candidacy for the 2024 presidential election and expressing support for cryptocurrencies, the industry has significantly increased its political donations to him. According to data from Public Citizen, a watchdog organization based in Washington, D.C., the crypto industry has provided over $119 million in funding for Trump’s historic re-election campaign. After Trump’s election, his inauguration ceremony also attracted millions of dollars in donations from the cryptocurrency industry. Ripple donated $5 million worth of XRP tokens to Trump’s inauguration, at a time when Ripple was embroiled in a high-profile lawsuit with the U.S. Securities and Exchange Commission, seen as an expectation of favorable policies from the Trump administration.

Robinhood has donated $2 million to Trump’s inaugural committee, Mary Elizabeth Taylor, the company’s Vice President of Global External Affairs, stated, “Robinhood is excited to welcome a new era of American innovation and smart regulation, promoting free markets, investor access, and consumer choice. We look forward to working with President Trump and the incoming administration to drive positive change in the market.” The largest registered crypto exchange in the US, Coinbase, donated $1 million to the inauguration fund. Kara Calvert, Coinbase’s Vice President of US Policy, said, “Coinbase is committed to working with the government and both parties in Congress to create clear regulations for cryptocurrency.” Additionally, Kraken, a crypto exchange based in San Francisco, donated $1 million for the swearing-in ceremony. Founder Jesse Powell also personally donated $845,000 in cryptocurrency to Trump’s campaign. The issuer of the USDC stablecoin, Circle, provided $1 million worth of USDC stablecoin to Trump’s inauguration fund. Decentralized finance platform Ondo Finance also contributed $1 million.

In addition to donations, cryptocurrency companies are actively seeking opportunities to cooperate with the Trump administration in policy making and industry development. Several cryptocurrency companies are vying for seats on the cryptocurrency advisory committee promised by Trump, including Ripple, Kraken, and Circle. Venture capital firm Paradigm and the crypto division of venture capital giant Andreessen Horowitz, a16z, are also lobbying hard, hoping to have a place on Trump’s cryptocurrency policy advisory team. Coinbase CEO Brian Armstrong met with Trump, and although the specific discussions are unknown, it shows Coinbase’s interest in participating in government cryptocurrency policy making. These actions indicate that the cryptocurrency industry hopes to promote the introduction of policies favorable to industry development through cooperation with the Trump administration, improve the regulatory environment of the industry, and promote the healthy development of the industry.

5.2 Voices of questioning and concern

Despite the support of many in the industry for Trump’s cryptocurrency policy, it has also raised some questions and concerns. Some industry insiders are concerned about Trump’s plan to include some small coins in the strategic reserves of cryptocurrencies. Trump’s announced reserves will include Bitcoin, Ethereum, Ripple, Solana, and Cardano, among others. Some cryptocurrency commentators believe that Bitcoin is the only cryptocurrency suitable for inclusion in the reserves, and including other smaller tokens will complicate matters. Matt Hougan, Chief Investment Officer of Bitwise, expressed concern that including speculative assets like Cardano in the reserves would weaken their strategic nature. James Butterfill, Research Director at asset management company CoinShares, expressed surprise at digital assets other than Bitcoin being included in the reserves, stating that they are more like investments in technology, unlike Bitcoin. He believes that Trump’s move takes a more patriotic stance towards the wider field of cryptographic technology but hardly considers the fundamental qualities of these assets.

Some people have expressed doubts about Trump issuing personal cryptocurrencies and his family’s business activities in the cryptocurrency field. Before taking office, Trump launched his own meme coin, ‘TRUMP,’ and his wife Melania also introduced ‘MELANIA,’ sparking controversy. Nick Tomaino, former senior executive at the largest US crypto exchange Coinbase, said Trump owns 80% of the profits from issuing the coin, and launching the token just hours before the inauguration was a predatory move that could harm many people. Trump should not use the token to line his pockets. Nic Carter, founding partner of crypto investment firm Castle Island Ventures, criticized Trump’s meme coin launch as extremely foolish, further tarnishing the reputation of the cryptocurrency industry. Maxine Waters, a member of the House Financial Services Committee, said Trump’s actions will exacerbate speculation in the crypto industry and tarnish its environment. Richard Painter, a law professor at the University of Minnesota, emphasized that Trump’s introduction of personal currency raises serious ethical issues related to conflicts of interest, and it is very dangerous for those regulating financial instruments to invest in these instruments at the same time. These doubts reflect people’s concerns about the regulation and ethical standards of political figures’ business activities in the cryptocurrency field, as well as concerns about the healthy development of the cryptocurrency industry.

Conclusion

The cryptocurrency industry also faces many uncertainties. The implementation effect of Trump’s policies is constrained by various factors such as congressional legislation, regulatory agency enforcement capabilities, etc. If the policies cannot be smoothly implemented, it will have a detrimental impact on the development of the cryptocurrency market. In addition, the high volatility and financial risks of the cryptocurrency market still exist. Changes in the global economic situation, adjustments in macro policies, and other factors may trigger sharp market fluctuations, requiring investors to closely monitor.