On May 27, President Trump used Truth Social to vow that “The New Frontier of Finance is being Built in America, and ‘TRUMP’ will NEVER let Crypto down,” claiming that he saved the very industry that former Securities and Exchange Commission (SEC) chair Gary Gensler supposedly nearly wrecked by, as the president put it, “driving Bitcoin, Crypto Perpetuals, and INNOVATION offshore.” He also pledged to pursue a “future-proof” market structure for digital assets.
Despite all that sounding like good news to a beleaguered crypto sector still reeling from the October flash crash, within hours of Trump’s statements, the market did the opposite of cheering, with nearly every major crypto asset declining over the following 24 hours.
So what exactly did the president mean, and what does it mean for investors in crypto, specifically for those who hold leaders like Bitcoin (BTC 6.31%), Ethereum (ETH 12.53%), Solana (SOL 9.92%), and Hyperliquid (HYPE 13.48%)?
Image source: Getty Images.
Rules beat rhetoric
A post on a social media website by a politician is not a law nor a regulation of any kind. In the same vein, “never letting crypto down” is a slogan, and a vague one at that, and it’s certainly not a policy or even the foundation for one. Nonetheless, it’s also clear that the president has significant influence over how executive agencies (and, by extension, the financial regulatory agencies) conduct their business.
With that said, the Clarity Act is currently advancing through Congress, and it’d split oversight of the crypto sector between the Commodity Futures Trading Commission (CFTC) and the SEC, thereby settling many of the regulatory questions and problems that have dogged the market for years. There are portions of the bill that remain contentious, but it still has a decent chance of passing and being signed into law this year, which is something the president likely wants.
Today’s Change
(-6.31%) $-4023.10
Current Price
$59744.00
Market Cap
$1.2T
Day’s Range
$59228.00 – $63818.00
52wk Range
$59228.00 – $126079.89
Volume
68.4B
As it’s presently envisioned, the Clarity Act probably wouldn’t affect Bitcoin much, as it doesn’t directly address ongoing policies such as the still-unimplemented Strategic Bitcoin Reserve (SBR), and most pressing regulatory classification questions about the asset have already been settled.
A couple of assets will be highly affected (for better or for worse)
For altcoins, there are a couple of additional important tidbits, as the regulatory situation isn’t nearly as firm.
Solana could benefit from the same new rules that sort tokens into commodities or securities, though indirectly. The real advantage would stem from the many tokens in its ecosystem being implicitly sorted into regulatory categories that’d be legible to financial institutions, thereby making them more willing to commit capital. Ethereum’s experience is very likely to be mostly the same as Solana’s in terms of ecosystem impacts, though its exposure to regulatory changes on stablecoin yields would affect it much more, as there are $161 billion in stablecoins on its chain.
Today’s Change
(-12.53%) $-222.77
Current Price
$1555.01
Market Cap
$187B
Day’s Range
$1545.27 – $1778.68
52wk Range
$1545.27 – $4946.05
Volume
36.6B
Hyperliquid, on the other hand, could get a massive and direct boost because it’s the primary decentralized venue for trading (and issuing) perpetual futures contracts.
Trump naming crypto perpetuals at all is quite unusual; these are derivative contracts that track the price performance of an asset with no expiration date, and his administration is steering their oversight toward the CFTC. New and clear CFTC rules about perpetuals could legitimize them in the U.S. and thus open the U.S. market to Hyperliquid, which it has mostly avoided due to legal concerns so far. Or new regulations could invite more powerful rivals into the market and spike compliance costs, blunting Hyperliquid’s edge.
Today’s Change
(-13.48%) $-9.00
Current Price
$57.75
Market Cap
$13B
Day’s Range
$56.81 – $67.47
52wk Range
$20.52 – $75.46
Volume
1.7B
Overall, investors should not be jumping to buy or sell anything based on the president’s comments. However, the high probability of sweeping changes to the crypto sector in the near term is still worth noting, as it’ll define the future of cryptocurrency. It’s entirely possible that, if the Clarity Act passes, the crypto majors will perk up again due to an influx of institutional capital. Still, it’s best to understand exactly what the final version of the legislation will look like before making an investment or sale.