As Bitcoin's price takes a tumble, some in the crypto community are questioning President-elect Donald Trump's ability to carry out his pro-crypto policy promises. The recent price drop, which saw Bitcoin fall to $93,075.04 on January 9, 2025, has raised concerns about the stability of the crypto market and the potential impact on Trump's pro-crypto agenda.



The Federal Reserve's latest monetary policy announcements have contributed to the market uncertainty, with investors pricing in a 95.2% probability that interest rates will remain unchanged during the January 29 meeting. This uncertainty, coupled with the delayed rate cuts and the first anticipated rate cut now expected on June 18, has created an environment of caution, particularly for risk assets like Bitcoin.

Trump's pro-crypto stance during his campaign, including his pledge to establish a national Bitcoin reserve and implement favorable crypto policies, has sparked optimism within the crypto community. However, the recent price drop and the uncertainty surrounding the Federal Reserve's monetary policy may temporarily dampen investor confidence in Trump's pro-crypto policy.

To reassure the crypto community and stabilize Bitcoin's price, Trump can take several specific policy actions:

1. Appoint Pro-Crypto Officials: Trump can nominate individuals who are supportive of cryptocurrencies to key positions in his administration. For instance, he could appoint Paul Atkins, a known advocate for less restrictive financial regulations, to head the SEC. This would signal a shift towards a more crypto-friendly regulatory environment.
2. Establish a National Bitcoin Reserve: Trump has pledged to establish a national Bitcoin reserve, which would involve the U.S. government purchasing and holding Bitcoin as a strategic asset. This move would provide a significant boost to Bitcoin's price and credibility, as it would indicate that the U.S. government recognizes Bitcoin's value and potential.
3. Simplify Regulatory Pathways: Trump can instruct the SEC to simplify regulatory pathways for crypto projects seeking to comply with federal laws. This would reduce uncertainty and complexity for crypto companies, making it easier for them to operate and grow.
4. Greenlight Crypto ETFs and Other Products: Trump can direct the SEC to ease barriers to creating exchange-traded funds and other regulated vehicles for cryptocurrencies. This would allow mainstream investors greater access to digital assets, potentially driving up demand and stabilizing Bitcoin's price.
5. Foster a Growth-Oriented Ecosystem: Trump can encourage U.S. companies to remain stateside and generate jobs in the crypto sector by creating a supportive regulatory environment. This would foster innovation and growth in the crypto industry, which could help stabilize Bitcoin's price.
6. Establish a Comprehensive Legal Framework: Trump can task David Sacks, the White House AI and Cryptocurrency Czar, with establishing a comprehensive legal framework for digital assets. This would provide clarity on the legal status of various cryptocurrencies, reducing regulatory gray areas and encouraging institutional and retail investors to enter the market.
7. Drive Technological Advancement: Trump can align the U.S. with cutting-edge developments in blockchain and AI by investing in research and development and encouraging public-private partnerships. This would help the U.S. maintain its competitive edge in the global digital economy and support the growth of the crypto industry.

By taking these policy actions, Trump can reassure the crypto community and help stabilize Bitcoin's price, fostering a more predictable and supportive regulatory environment for digital assets.

In conclusion, while Bitcoin's price volatility can be a barrier to its adoption, it has not prevented institutional investors and central banks from exploring the use of cryptocurrencies. As regulatory clarity improves, the influence of price volatility on Bitcoin's adoption may decrease, potentially leading to broader acceptance in the economy. Trump's pro-crypto policy can play a crucial role in fostering this growth and stability in the crypto market.