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Trump Effect and Institutional Changes: A New Phase in the Crypto Market

This article explores how the political persuasiveness created by the Trump effect and the resulting institutional changes are reshaping the crypto market, including Bitcoin and stablecoins.
It details the symbolism of statements and executive orders from the political sphere and their market reactions, as well as how the U.S. government’s decision to designate Bitcoin as a strategic asset is causing repercussions today.
The sections below are organized chronologically, so take a read and quickly grasp the core trends of the market.

[1] Trump Effect: Political Effects and Institutional Changes

The political effect is the immediate impact of the character Trump on the public and the political world.
Persuasive statements from politicians have elicited temporary reactions in the market.
However, the key point is that the institutional changes revealed as the fog clears—specifically, the executive order designating Bitcoin as an important asset—have a long-term impact on the market.
Unlike situations where the public merely listens to politicians’ words, these institutional changes are manifested through the clear intent of the government and regulatory authorities.

[2] Bitcoin and Stablecoin Issues

Bitcoin is regarded by the U.S. government as a strategic asset, and various issues such as seizure, holding, and exchange outflows are ongoing.
China previously held overwhelming dominance in Bitcoin mining and trading, but now the U.S. is actively moving to reclaim it.
The ongoing problem of Bitcoin outflows seized due to hacking incidents and court rulings is acting as a source of instability in the market.
At the same time, stablecoins like USDT and USDC are rapidly emerging, and the direction of the market is becoming more concrete with government regulations and bill announcements.

[3] Dollar Stablecoins and Changes in Government Policy

Dollar stablecoins are becoming important financial instruments as the U.S. government provides institutional certainty.
The Treasury Secretary and the President are strongly pushing bills, and are even planning government funding strategies such as purchasing treasury bonds through dollar stablecoins.
In addition, state governments are aiming to expand the scale and financial innovation by allowing the issuance of stablecoins under $10 billion.
The U.S. government’s promotion of stablecoin issuance and operation through political circles and institutions signals a significant change in the global competitive landscape of the crypto market.

[4] Impact on U.S. Treasuries and the Crypto Market

Adjustments in U.S. Treasury prices and the method of operating treasury bonds are achieved through long-term investment inflows rather than short-term interest rate manipulation.
Government plans and related policies for treasury bond purchases directly affect the supply and price stability of the crypto market, especially Bitcoin.
The government’s moves to adjust the market balance through its holdings of treasury bonds and seized Bitcoin assets are an important signal to investors.
In this situation, major countries such as the U.S., China, and the UK are implementing their own financial strategies, and the global competitive landscape surrounding crypto is expected to intensify further.

[5] Future Prospects and Conclusion

The short-term political waves that began with the Trump effect are now connected to institutional changes, and crypto assets such as Bitcoin and stablecoins are likely to be reorganized as national strategic assets.
The dollar-based stablecoin market is expected to grow even faster in accordance with the U.S. government’s executive orders and bill initiatives.
Accordingly, there is great interest in Bitcoin, stablecoins, the dollar, U.S. Treasuries, and the crypto sector among investors worldwide.
The impact of these changes on the overall financial system over the next 10 to 20 years is expected to be significant, and governments and businesses in each country should proactively respond to this point.

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