© Khumaer.us
On Friday, the White House held its inaugural “crypto summit,” gathering leading figures from digital asset firms to discuss the Trump administration’s aim to unwind the stringent regulations imposed by the Biden administration on the sector.
However, certain stakeholders in the crypto space expressed disappointment as the Trump administration failed to provide a clear signal of robust support for the industry, resulting in a decline in the value of the very assets the summit intended to celebrate.
In late-afternoon trading, bitcoin prices dipped by about 3%, heading towards a week-end close of approximately $87,000, reflecting a drop of around 7% over the week.
The groundwork for the muted response was established late Thursday, as Trump’s designated “crypto czar,” venture capitalist David Sacks, revealed that the president had enacted an order to establish a “strategic bitcoin reserve.”
Although this initiative has garnered significant attention from the crypto community, the order specified that the reserve would solely include bitcoin previously seized by federal law enforcement agencies. Additionally, a separate “digital asset stockpile” would be established to contain other digital tokens, such as ethereum and ripple, also obtained through enforcement actions.
Nonetheless, the executive order did not provide any explicit assurances or timelines for the government to begin purchasing new cryptocurrencies outright.
Should such purchases ever take place, the order stated they would be executed in a budget-neutral manner, incurring no additional costs to taxpayers.
Notably, the mere fact of hosting a White House crypto summit, let alone the creation of a strategic reserve, marks a significant shift for an industry that has long sought to achieve mainstream acceptance. Despite recent downturns, bitcoin prices still remain about 25% higher compared to their levels before Trump aimed for a second presidential term in early November.
Trump has enthusiastically entered the crypto space, launching his own “meme coin” just before his inauguration in January, which briefly inflated his paper wealth by billions. However, its value has since plummeted.
While Trump reiterated his ambition to establish the U.S. as “the crypto capital of the world” and a leader in innovative financial technology, some investors expressed a desire for more substantial commitments.
“Trump is now officially ‘off the hook’ for what the Bitcoin community did for him,” Jeff Park, an executive with the Bitwise crypto investment group, commented on X before the summit concluded, alluding to the establishment of the strategic reserve. “If you want something more later, he’ll have demands too.”
Park elaborated: “We aimed too low. Having just bitcoin, without including the rest of the altcoins in the strategic reserve, is not a victory. ‘Exploring’ or ‘studying’ concepts is not a win. ‘Not selling’ is not a win. None of these actions fundamentally require an executive order to be executed.”
In a pre-summit call with reporters, White House officials compared the reserve’s formation to a “digital Fort Knox,” ensuring that the U.S. retains proper management over its digital assets. The officials noted that previously, the government had disposed of its holdings sporadically, which they argued had resulted in lost value for taxpayers given bitcoin’s consistent appreciation.
They also dispelled a circulating rumor that individuals would be exempt from taxes on profits from crypto holdings.
Moreover, officials indicated that observers had misconstrued the president’s initial social media announcement regarding the reserve’s creation, particularly concerning the mention of three non-bitcoin cryptocurrencies as founding tokens.
The crypto sector has significantly influenced the 2024 election, with crypto-related political action committees and affiliated groups expending over $245 million in the last election cycle, according to data from the Federal Election Commission.
Approximately half of all corporate donations in the electoral process came from the crypto industry, as reported by the nonprofit watchdog, Public Citizen.
For all their efforts, even though the industry has not witnessed the U.S. government diving deep into crypto markets, it has nonetheless achieved a more favorable regulatory atmosphere. Trump stated on Friday that his administration would “end the federal bureaucracy’s war on crypto.”
“We feel like pioneers,” Trump said.
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