Day Three of Donald Trump’s presidency introduced no crypto bombshells, though Democrats are badgering Republican colleagues to name out the president’s memecoin grifting.
Placing the ‘er’ in ‘strategic reserve’
Day Three of Trump 2.0 drew to a detailed with no signal of the president fulfilling his campaign pledge to ascertain a ‘strategic [BTC] stockpile’ aka the ‘strategic BTC reserve’ (SBR). Whereas crypto bros proceed to offer Donald the advantage of the doubt, there are clearly some fraying nerves amongst those that really want Trump to ship the products.
Take Fred Thiel, CEO of BTC block reward mining outfit MARA (NASDAQ: MARA), who final 12 months led his firm down a dead-end highway marked ‘BTC treasury technique.’ Mainly, MARA has been borrowing billions of {dollars} to purchase BTC on the open market and sits on it, believing that every token will sometime be able to buying Greenland by itself.
On January 17, Thiel announced that MARA had imprinted an AI portrait of Trump’s face on the BTC blockchain seen by way of the community’s mempool explorer. Thiel known as this the ‘Trump 47’ block, but when Trump seen this fawning tribute he hasn’t commented on it publicly.
On January 21, Thiel announced he was “[f]ocusing now on bringing the [SBR] to all 50 states and the Federal authorities.” MARA is a co-founder of the Bitcoin Voter Challenge, which, for the reason that conclusion of final 12 months’s U.S. election, has stored itself busy tracking proposed SBR legislation in particular person U.S. states (none of which has handed).
Brian Armstrong, CEO of the Coinbase (NASDAQ: COIN) change, posted his information to rising ‘economic freedom’ final week, which argued for establishing an SBR as a result of BTC “will develop into central to nationwide safety in a world the place holdings of [BTC] can shift the stability of energy amongst nation states.”
Provided that MicroStrategy (NASDAQ: MSTR) founder Michael Saylor now controls 2% of all the BTC that will ever exist—extra when you think about how a lot BTC has been misplaced over time—we urge Trump to invade Saylor as quickly as attainable. (He needs to be simpler to take than Greenland or Panama, and the payoff shall be HUGE.)
On the time this was written, the Polymarket prediction/betting web site has a 34% probability of Trump establishing an SBR within his first 100 days in office. That determine stood at 48% on January 20. Rival prediction web site Kalshi’s odds on Trump establishing an SBR this year are at the moment at 63%, down from round 70% per week in the past.
Geoff Kendrick, head of digital property analysis at Normal Chartered (NASDAQ: SCBFF), said this week that Trump wanted to behave quickly or nervous BTC bros would begin smashing the ‘promote’ button. “Hope isn’t a method … When hope dies, digital asset costs will fall 10-20%.”
TRUMP memecoin controversy not going away
After feigning ignorance Tuesday of the billions of {dollars} he’d earned (on paper) from final Friday’s launch of his $TRUMP memecoin, Trump’s private social media accounts reposted several posts promoting his token. Regardless of this shilling, TRUMP’s token fiat worth continues to slip, sitting at simply above $37 as of Thursday morning.
A crypto tax software program agency CoinLedger survey discovered that just about 7.5% of crypto customers had traded the $TRUMP token within the first two days it was out there. Almost 2% of customers had traded $MELANIA, the token issued by Trump’s spouse on January 19, throughout its first day of availability.
As a vivid illustration of the portal to hell that the Trump tokens have opened, entities have already filed applications for exchange-traded funds (ETFs) based mostly on $TRUMP and another memecoins, together with DOGE and $BONK. Not so way back, such a plan could be extensively mocked. However up is down, black is white, and also you’re both on this gravy practice, otherwise you get left on the station.
Take into account Crypto Quant CEO Ki Younger Ju, who was challenging the crypto neighborhood solely final October to “identify one meme coin that genuinely creates social worth.” Quick ahead to this week, and Ki was celebrating memecoins as “the non secular power of web society” and praising Trump for “performing like a black gap pulling in speculative liquidity from retail crypto traders throughout the globe.”
Ki described the Trump administration’s new method thusly: “If it’s inevitable, use them.” This view is shared by investor Mark Cuban, who likened crypto’s post-TRUMP mantra to a shoulder-shrugging “Mint it, print it, sell it F*ck it.”
Cuban adopted that diss with a memecoin challenge, saying he’d problem his personal token with the identical phrases as $TRUMP, however “All of the income from the sale of the cash go to the US Treasury. The pockets handle shall be printed so everybody can observe it. If you wish to gamble, gamble. However no less than use it to make a dent within the US Debt[.] You in?” Cuban added: “If it’s a grift. Make it a grift to learn all Individuals.”
Even the Wall Avenue Journal’s editorial board forged a important eye on Trump’s crypto boondoggle, saying the president “is inviting bother with what appears to be like like remarkably poor judgment.” Memecoins are a zero-sum sport, so what is going to occur when lots of his token consumers—together with lots of his political supporters—get burned?
The WSJ warned that “a enterprise or international official with pursuits earlier than the federal authorities would possibly search to curry favor with Mr. Trump by saying plans to purchase tens of millions of his tokens to pump up the worth … If Mr. Trump’s regulators then act in a means that aids crypto or the particular person looking for the favor, he’ll be accused of aiding the client in service of presidential self-dealing … The place are Mr. Trump’s legal professionals?”
A current survey confirmed a disturbing share of $TRUMP/$MELANIA consumers have been first-time crypto consumers. This beginner feeding frenzy isn’t prone to finish quickly, as app retailer charts present crypto apps dominating the ‘finance’ classes (be they Android or Apple). God assist us all.
However don’t fear. For example, do you know the TRUMP token may solve America’s national debt crisis? God be praised!
Democrats demand committees take motion
The controversy surrounding a sitting president actively selling merchandise supposed to spice up his backside line isn’t going away. At a January 22 Home of Representatives’ Monetary Providers Committee assembly, newly put in chairman Rep. French Hill (R-AR) outlined the administration’s targets for the present session.
Hill said Republicans would “deliver authorized readability to digital property, offering innovators with new instruments to construct decentralized monetary services and products that may empower individuals to assist each other and make sure that America will stay a frontrunner on this monetary know-how.”
In a statement laying out the Committee’s agenda, Operation Choke Point 2.0 was talked about, because the Committee pledged to “examine the misuse of regulatory authority to forestall digital asset corporations from accessing and sustaining banking providers.” The Committee may also “monitor and consider the Federal Reserve’s previous efforts to analysis and develop a [central bank digital currency].”
Nevertheless, the Committee’s rating member, Rep. Maxine Waters (D-CA), used her opening statement to notice Hill’s failure to say Trump’s memecoin opening up “potential conflicts of curiosity which will put our nationwide safety in danger.” Waters warned that Trump’s token was “rising his private wealth and probably offering a backdoor for sanctioned individuals, hostile governments, and different dangerous actors to offer cash to Trump straight.”
Over on the Home Oversight Committee, rating member Rep. Gerard Connolly (D-VA) despatched new chairman Rep. James Comer (R-KY) a letter on January 21 demanding “quick motion to research [Trump’s] grave conflicts of curiosity.”
Apart from the $TRUMP token, Connolly cited the Trump household’s decentralized finance (DeFi) product, World Liberty Financial (WLF), as a “notably troubling instance” of Trump’s conflicts. Connolly famous that WLF’s largest investor is “a international entrepreneur underneath investigation by the Securities and Trade Fee for alleged securities fraud.”
The mentioned alleged fraudster is none apart from Justin Sun, founding father of the Tron blockchain, who has bought no less than $75 million of WLF’s ‘governance’ token WLFI. Solar’s purchases helped push whole WLFI gross sales over the brink that permits a Trump-linked entity to obtain 75% of token gross sales.
WLF has acknowledged Solar’s generosity by utilizing a few of the funds it’s raised to buy Tron’s TRX token, together with another $2.65 million worth on January 21, elevating WLF’s total TRX holdings to over $7.7 million. The day earlier than, Donald’s son Eric started following Tron’s official X account.
WLF has additionally acquired $47.6 million price of ‘wrapped’ BTC (wBTC), one other token with ties to Sun. This makes you marvel how quickly Solar would possibly announce a ‘wrapped TRUMP’ token on Tron. Suspicions are already being raised as to the extent of Solar’s involvement within the Trump household’s crypto operations and what payoff Solar is likely to be hoping to extract.
Pardon me, Justin?
A clue as to Solar’s motivations might have been raised in Connolly’s letter and its references to the SEC investigation into Solar’s alleged pump-and-dump ways. Studies that the Division of Justice (DoJ) is conducting a criminal probe into Solar’s actions have circulated for years, which can be why Solar hasn’t appeared to have set foot on U.S. soil for the reason that pandemic.
On January 21, Trump fulfilled a marketing campaign pledge by pardoning Ross Ulbricht, founding father of the BTC-powered Silk Road darkish internet market that offered the whole lot from unlawful narcotics to unlawful weapons. Following the pardon, the controversial X consumer Rothmus suggested that Roger Ver—at the moment in Spain awaiting trial on charges of mail fraud and tax evasion—must also obtain a pardon.
Trump’s ‘first buddy’ Elon Musk replied to this attraction by saying: “Will inquire”. Musk, who claims to have been “in the Oval Office” when Trump signed Ulbricht’s pardon, later clarified that pardon choices have been “as much as the President, however I’ve requested whether or not [pardoning Ver] was attainable.”
Musk’s capability to affect Trump on clemency issues has sparked hypothesis about who is likely to be subsequent. Ver’s odds of receiving a pardon in Trump’s first 100 days in workplace are currently standing at 32% on Polymarket. To this point, the one different pure crypto determine within the hunt is disgraced FTX founder Sam Bankman-Fried (4%), though we suppose Julian Assange (24%) would possibly qualify because of his embrace of the BTC token.
Justin Solar has but to make the Polymarket listing however that’s doubtless because of his relative anonymity subsequent to the opposite candidates. Ought to a pardon be issued, we’ll have established a monetary benchmark for the suitable to lie, cheat and steal with impunity. Enjoyable instances.
Free Kim Jong-un!
One other crypto voice angling for Trump to pardon his friends is Ethereum co-founder Vitalik Buterin, who responded to information of Ulbricht’s pardon by tweeting “No man left behind.” Buterin tagged Roman Storm and Alexei Pertsev, builders of the Ethereum-based Tornado Cash, a coin-mixing service that permits customers to obfuscate ETH tokens’ blockchain historical past.
Roman Storm was charged with money laundering and sanctions evasion in August 2023 in reference to North Korean hacking groups utilizing Twister Money to launder their ill-gotten beneficial properties. Storm is at the moment in U.S. custody, whereas Pertsev is in a Dutch jail after being sentenced to 64 months final Might.
Buterin famous a January 21 ruling associated to Twister Money within the U.S. Court docket of Appeals for the Fifth Circuit. Final November, the identical court docket found fault with the Treasury Division’s Workplace of International Belongings Management (OFAC) for making use of sanctions to the sensible contracts powering the mixer (and the builders who wrote them). The court docket now dominated that the sensible contracts aren’t ‘property’ and are thus past OFAC’s authority to sanction. The court docket lifted the sanctions and despatched the case again to the decrease court docket for additional arguing.
Buterin later tweeted “Free Virgil”, a reference to Virgil Griffith, the Ethereum developer who was sentenced to 63 months in prison in April 2022. Griffith traveled to North Korea in 2019 to offer the regime tips on how blockchain tech may assist them evade sanctions. This journey defied advance warnings by U.S. authorities that they wouldn’t look kindly on such shenanigans, however Griffith selected to go anyway.
Trump framed his Ulbricht pardon as a payoff to “the Libertarian Motion, which supported me so strongly,” whereas Solar is placing tens of tens of millions of {dollars} in Trump’s pocket. What does Buterin have to supply in return for not one however three crypto pardons?
Loads, when you ask Ethereum co-founder Joe Lubin, who famous the over 56,000 ETH (price ~$182 million) that WLF has acquired, whereas WLF additionally registered some .eth domains related to Trump members of the family, together with Donald’s sons Eric and Barron. This led Lubin to claim that WLF “is 100% Ethereum aligned.”
Lubin justified this declaration by claiming that “the Trump household will construct a number of big companies on Ethereum … The Trump administration will do what is sweet for the USA, and that can contain ETH, issues of how the USA can help Ethereum … and maybe ultimately use Ethereum know-how in authorities actions simply as they at the moment use the web and internet protocols.”
That’s some fairly daring future-surfing provided that Ethereum is at the moment present process a ‘civil struggle’ that has seen senior developers leaving the project, the obvious launch of a rival to the Ethereum Foundation in control of community developments, and Buterin telling the community that he’s in charge so sit down and shut up. Bullish.
However don’t fear, Ethereum followers. Justin Solar is here to solve all your problems.
USDC for the win
Lubin’s self-interested optimism additionally belies the truth that Donald and Melania selected to problem their tokens on the Solana community, not Ethereum. Solana’s transaction quantity spiked following the token launches, resulting in severe community congestion and transaction delays. Nonetheless, someway, Solana managed to keep away from one other outage requiring a full restart.
However the actual winner, not named Trump, seems to be USDC, the dollar-denominated stablecoin issued by Circle in a partnership with Coinbase (which drew clients’ ire when its wonky infrastructure led to a days-long backlog of Solana transactions).
When Trump issued his memecoin, USDC’s market cap was sitting round $46.5 billion. 5 days later, that cap has hit $51.5 billion, solely ~10% off its all-time excessive in mid-2022. A lot of that progress has come by way of USDC issued on Solana, fueling probably the most energetic buying and selling pairs. In contrast, USDT, the market-leading steady issued by Tether, has gained solely round $1 billion over the identical interval, elevating its cap to $138.5 billion.
Coinbase’s Armstrong lately recommended his change may forestall U.S. customers from accessing USDT, as it recently did in Europe, to adjust to stablecoin legislation anticipated to be authorised by Congress within the present session. The gist is that Tether could be unable to abide by the laws’s necessities, together with subjecting its reserve assets to impartial audits, one thing Tether has steadfastly refused to do.
In response to Armstrong’s musings, Tether CEO Paolo Ardoino tweeted (in Italian) “Increasingly more I really feel just like the black knight.” We actually hope Ardoino was referencing the black knight of Monty Python & The Holy Grail fame, who suffers the lack of all 4 limbs in a duel with King Arthur and but refuses to concede that he’s crushed.
In the long run, Arthur simply went across the crippled knight, a lot as USDC seems to be making ready to imagine the dominant function in regulated markets, relegating Tether to its crime coin status. That’s except Tether’s pal in D.C., Howard Lutnick—Trump’s nominee for Commerce secretary—can someway foyer Trump to make sure a USDT carveout earlier than Congress can vote on any stablecoin invoice.
Watch: Teranode is the digital spine of Bitcoin
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