The crypto market has continued to hit record highs since Donald Trump was elected 47th US president. On inauguration day, January 20, bitcoin topped R2m for the first time on Luno, just 11 months after it breached the R1m mark. With heightened market interest, bitcoin trading volumes exceeded $100bn globally for two consecutive days after the inauguration.
Within the first week, Trump signed an executive order that could allow the digital assets sector to move forward in the US with a more welcoming framework set by the White House. The order does not establish a strategic bitcoin reserve but directs the working group to “evaluate the potential creation and maintenance of a national digital asset stockpile”.
Trump has made quite the turnaround since his first term, when he tweeted that he was not a fan of bitcoin and other cryptocurrencies.
He and his wife recently launched $Trump and $Melania tokens on various cryptocurrency exchanges. $Trump is a meme coin introduced to celebrate his return to the US presidency. Like many other meme coins, it has been fuelled by virality, and its rapid price increase has already been punctuated with sharp declines. Global crypto investors see the US president’s launch of a meme coin as a significant industry event. It sets the stage for his keenly awaited crypto-friendly administration.
Trump has appointed several people who support digital assets, signalling a shift in policy towards a more active approach to managing the growing influence of cryptocurrencies.
Mark Uyeda is taking over as acting chair of the Securities & Exchange Commission (SEC) from a now-departed Gary Gensler. The crypto industry will not miss Gensler, who was very wary of crypto. Uyeda has been critical of the SEC’s moves to rein in crypto.
The potential implications for South Africa’s growing crypto sector could be significant as it’s one of Africa’s leading cryptocurrency markets
Trump’s pick for the permanent SEC chair, Paul Atkins, a former SEC chair, is awaiting Senate confirmation. Known for advocating reduced regulatory burdens and promoting financial innovation, Atkins is co-chair of the Token Alliance, a cryptocurrency advocacy group for the Chamber of Digital Commerce that seeks to establish clear and balanced digital asset regulations.
He will likely shift towards a more nuanced regulatory approach after the industry has grappled with regulatory uncertainty regarding the SEC’s classification of various digital assets as securities.
South African expats are involved, too. Elon Musk, whose Tesla previously held billions in bitcoin and whose social media platform X has integrated cryptocurrency payments, will co-lead a department of government efficiency (DOGE) in the new administration. Many consider this apt, considering his key role in hyping the meme coin doge. Musk’s influence on crypto markets makes him a crucial figure.
Cape Town-born David Sacks, a former PayPal COO, has been appointed to lead the new administration’s technology policy. Trump named Sacks the White House AI and crypto czar, a newly created role, and stated that Sacks would “work on a legal framework so the crypto industry has the clarity it has been asking for and can thrive in the US”.
A Trump administration influenced by crypto advocates will push for more industry-friendly regulations and a shift in regulatory approach.
The potential implications for South Africa’s growing crypto sector could be significant as it’s one of Africa’s leading cryptocurrency markets. The Reserve Bank has taken progressive steps towards regulation, and a crypto-friendly US administration could influence global regulatory standards, potentially benefiting South African crypto businesses and investors.
However, the cryptocurrency industry’s hope for a more favourable regulatory environment must be tempered with the reality that any administration must balance innovation with investor protection and financial stability.
* De Wit is South Africa country manager at Luno
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