Trump's Executive Order: A Game Changer for Bitcoin's 4-Year Cycle and Investment Landscape

In the ever-evolving world of cryptocurrencies, one thing has remained constant: the four-year cycle of Bitcoin (BTC). This cycle, characterized by a bullish accumulation phase, a bull market driven by reduced supply, and a bear market after the peak, has played out consistently since Bitcoin's inception. However, a seismic shift in policy from Washington, led by former President Donald Trump, may shatter this cycle and usher in a new era of prolonged growth for the cryptocurrency industry.

On January 23, 2025, President Trump signed an executive order entitled "Strengthening American Leadership in Digital Financial Technology," establishing his Administration's policy "to support the responsible growth and use of digital assets, blockchain technology, and related technologies across all sectors of the economy" (the "EO"). This EO sets out five high-level policy objectives, including protecting the lawful use of blockchain networks, promoting dollar-backed stablecoins, ensuring fair and open access to banking services, providing "regulatory clarity" for digital assets, and prohibiting Central Bank Digital Currencies (CBDCs).

The EO also rescinds Executive Order 14067 issued by President Biden on March 9, 2022, which placed "the highest urgency on research and development efforts into the potential design and deployment options of a United States CBDC." Additionally, the EO rescinds the Department of the Treasury's "Framework for International Engagement on Digital Assets," issued on July 7, 2022, which set forth steps for international cooperation on digital assets while respecting core U.S. democratic values, protecting consumers, ensuring interoperability, and preserving the safety and soundness of the global financial system.



The EO accomplishes several affirmative directives, including the establishment of a Working Group on Digital Asset Markets to be chaired by a Special Advisor for AI and Crypto and include the Chairman of the Securities and Exchange Commission, the Chairman of the Commodity Futures Trading Commission, the Attorney General, and the Secretary of the Treasury, among seven other top officials. The Working Group is tasked with identifying regulations, guidance documents, and orders pertaining to the digital asset industry within 30 days, submitting recommendations regarding rescission, modification, or regulatory adoption of those items within 60 days, and submitting a report to President Trump recommending regulatory and legislative proposals to establish a Federal framework for the issuance and operation of digital assets, including stablecoins, and evaluate the potential creation and maintenance of a national digital asset stockpile.

The EO also prohibits the development of CBDCs, stating that they "threaten the stability of the financial system, individual privacy, and the sovereignty of the United States," and underscores that "any ongoing plans or initiatives at any agency related to the creation of a CBDC within the jurisdiction of the United States shall be immediately terminated, and no further actions may be taken to develop or implement such plans or initiatives."

The accompanying White House statement highlights several key objectives of the Trump Administration in this space, including making "the United States the center of digital financial technology innovation by halting aggressive enforcement actions and regulatory overreach that have stifled crypto innovation under previous administrations," and ensuring that "regulatory frameworks are clear" and the "growth of digital financial technology in America... remain[s] unhindered by restrictive regulations or unnecessary government interference."



The impact of Trump's EO on the Bitcoin market is expected to be significant. Matt Hougan, Chief Investment Officer at Bitwise, predicts that the executive order could bring trillions of dollars in investments to the Bitcoin market, as it provides regulatory clarity and encourages Wall Street banks to enter the space. This influx of institutional capital could lead to a more stable and sustained growth for Bitcoin, potentially disrupting the traditional four-year cycle of boom and bust.

Moreover, the growing mainstream adoption of Bitcoin, facilitated by Trump's executive order, is expected to influence the market's volatility and long-term growth trajectory. The increased institutional investment, regulatory clarity, reduced market manipulation, increased adoption and integration, and potential disruption of the four-year cycle could contribute to a more stable and predictable market, with reduced volatility and sustained long-term growth for Bitcoin.

In conclusion, Trump's executive order could be a game changer for the Bitcoin market, potentially disrupting the traditional four-year cycle and attracting trillions of dollars in investments. As the crypto ecosystem continues to evolve, investors should keep a close eye on the regulatory landscape and the potential impact of Trump's EO on the long-term growth trajectory of Bitcoin.