Policy tailwinds and confusing actions go hand in hand—Is Trump a true crypto builder or an even bigger镰刀?
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Policy tailwinds and confusing actions go hand in hand—Is Trump a true crypto builder or an even bigger镰刀?
Due to its nascent nature, high risk and high returns, and incomplete regulation, the cryptocurrency market has become one of the most sensitive areas in the tariff storm.
Navigating Web3 tides with focused insightsWritten by: Penny, BlockBeats
Since Trump and his wife launched their Meme coins $Trump and $MELANIA, attracting massive capital inflows, the crypto market has quickly fallen into a state of liquidity shortage. On the other hand, a series of bearish developments—such as the disruption caused by China's AI large model DeepSeek, sovereign nations revoking Bitcoin’s legal tender status, and U.S. tariff hikes—have further worsened an already sluggish market.
The first major post-Lunar New Year downturn was triggered by Trump's threat of imposing new tariffs.
Policy Tied to Price? The Hyper-Sensitive Crypto Market
Trump’s tariff policies are hitting markets hard. On February 1, local time, President Trump signed an executive order imposing an additional 25% tariff on imports from Canada and Mexico, along with a 10% tariff on energy resources from Canada, scheduled to take effect in four days. Additionally, Trump signed another order on the same day to impose an extra 10% tariff on goods imported from mainland China.
Global risk markets reacted swiftly, with cryptocurrencies taking the brunt. Bitcoin plunged from around $105,000, breaking below the $100,000 mark and briefly dropping under $92,000—a decline exceeding 7% within 24 hours. Ethereum fell nearly 25%, reaching its lowest level since early September last year. Other major cryptocurrencies also experienced steep declines, all shedding over 10%, marking an epic-scale crash.
On February 3, Trump announced that he had reached an agreement with Mexico's president to immediately suspend the planned tariffs for one month. Following this delay, Bitcoin rebounded to a high of $102,500, Ethereum rose to $2,923, and most other major coins recovered to pre-crash levels.
Jeff Park, Head of Strategy at Bitwise Alpha, said tariffs may be only a temporary tool. But in the long run, Bitcoin will not only rise but accelerate faster, because both sides suffering from trade imbalances want Bitcoin—so the end result remains the same: higher prices, faster growth.
In short, the tariff hikes led to sharp declines across global equities, and combined with other negative news, dragged down the cryptocurrency market. These measures are not just reshaping international trade—they represent a severe blow to global financial market confidence. Due to its nascent nature, high-risk/high-return profile, and incomplete regulation, the crypto space has become one of the most sensitive domains amid this storm, reaffirming how tightly linked it is to global macroeconomic policy.
Meme Coin Issuance Drains the Market
On January 18, 2025, Trump announced his personal Meme coin $TRUMP via his social media account. Within just 12 hours of launch, the token surged over 15,000%, reaching near $30, with a peak market cap exceeding $80 billion. Such staggering gains and scale rapidly drew enormous capital inflows. Many investors who previously held Bitcoin, Ethereum, and other mainstream cryptos began selling off their positions to speculate heavily on $TRUMP. Aside from SOL, other tokens were severely drained, while other Meme coins and AI Agent tokens saw broad-based sharp declines.
Moreover, the team behind Trump’s coin holds up to 80% of locked supply, giving them strong price manipulation power. As lock-up periods gradually expire, whether they dump directly on exchanges or stake via DeFi protocols could cause massive market shocks. This behavior further disrupts market order, making it harder for genuinely valuable crypto projects to secure funding and leading to ecosystem imbalance.
The draining effect from Trump’s coin issuance not only caused irrational short-term capital flows but also severely harmed the development and stability of other crypto projects. It effectively hit pause on booming sectors like DeSci, DeFAI, and AI Agents. Given the industry’s fast-paced tendency to chase new trends over old ones, these sectors will need even stronger catalysts to regain momentum, leaving the crypto market facing greater uncertainty and risk.
Arthur Hayes, co-founder and CIO of BitMEX, believes $TRUMP’s 24-hour surge to nearly $1 trillion in fully diluted valuation (FDV) is an absurd market signal. He likened the $TRUMP rally to FTX buying MLB umpire signage during the 2021 bull run—an omen signaling the approaching market top.
Selling First, Then Pumping: WLFI’s Puzzling Moves
Data from Arkham shows that World Liberty Financial conducted a large-scale crypto asset transfer late on February 3, reducing its ETH holdings from approximately 66k on February 2 to just 52—effectively liquidating almost all its ETH, mostly flowing into Coinbase Prime deposit addresses.
At this sensitive timing, Trump’s second son, Eric Trump, posted on his social platform stating, “In my opinion, it’s a great time to add ETH.” The original version of the tweet included an additional line: “You can thank me later.”
The community raised suspicions. Some observant investors noted that ETH holdings dropped from 66k to 66—a difference of just one unit—suggesting deliberate obfuscation of asset movement, fueling speculation about coordinated rug-pulling. In response, WLFI explained that these moves aim to maintain a robust, secure, and efficient financial system, merely reallocating assets for regular business purposes without plans to sell tokens. However, once funds enter Coinbase Prime, their actual use becomes opaque. Investors can only analyze future price movements and WLFI’s subsequent asset operations.
Interestingly, on the morning of February 6, Eric publicly promoted BTC while mentioning the family project WLFI, prompting jokes in the community like “Is it time to sell Bitcoin now?” Perhaps this was indeed a pump before dumping; perhaps it aimed to boost confidence shaken by tariff fears; or maybe it was just routine promotion of their family venture—after all, shilling and marketing are part of their playbook.
Crypto Tsar, or Just Another Big Scalper?
David Sacks, chairman of the crypto council, is best known as a co-founder of PayPal and gained fame for creating Yammer, which he sold to Microsoft for $1.2 billion. In the crypto world, David Sacks’ most notable role is as an investor in the crypto-focused VC firm Multicoin and a staunch Solana maximalist, earning him the nickname “Crypto Tsar.”
Given that $TRUMP was deployed on the Solana blockchain and David Sacks remained silent about these “zero-sum Meme coins” when Trump launched $TRUMP, many suspect the crypto council chairman must have been involved.
Another piece of evidence: David Sacks has prior history. In March 2024, he posted about a Memecoin named after himself, $Sacks.
Although he later tweeted nine times telling people not to buy it, this still confirms he once promoted his own coin—a tactic identical to the $TRUMP launch. (According to community members, David Sacks recently deleted his posts related to $Sacks.)
This has turned many against David Sacks, perceiving his approach as overly opportunistic and eager to profit through aggressive means. Even if Sacks wasn’t directly involved, as head of the crypto council, he should still bear responsibility for this incident. There are even rumors that some have suggested replacing the entire leadership of David Sacks’ crypto council with a new team.
On February 5, during a press conference starting at 3:30 AM Beijing time, David Sacks reiterated goals such as “clarifying the crypto regulatory framework,” “ensuring crypto innovation happens in the U.S.,” and “building a golden age for digital assets,” but revealed no new or specific details. When discussing establishing a Bitcoin reserve, Sacks used the word “evaluate”—a term with weak commitment (historically used by the U.S. government when forced to address an issue without intending real action). Possibly due to the lack of positive announcements causing market disappointment, Bitcoin dropped below $99,000, hitting a low of $96,147.
Genuine Builder or a Bigger Scythe?
Looking back at Trump’s actions over recent years, his stance on cryptocurrency has clearly shifted. During his previous term, he openly called Bitcoin and other cryptos “scams,” but now promises to make the U.S. the global “crypto capital” and “Bitcoin superpower,” forming a crypto task force, launching family Defi projects, lifting restrictions on new token sales, and strengthening ties between crypto firms and traditional finance.
There may be multiple reasons behind Trump’s shift. On one hand, the crypto market has grown rapidly in recent years, amassing a vast investor base and significant economic influence—aligning with this group helps boost his political support. On the other hand, powerful interest groups within the crypto industry may have influenced Trump through political donations, pushing him to adopt pro-crypto policies. Additionally, Bitcoin can serve as a hedge against weakening dollar dominance. Including it in national strategic reserves could attract capital inflows and help sustain dollar hegemony.
As election results settle, every move Trump makes increasingly sets the tone for crypto market sentiment. Especially notable was his pre-inauguration launch of his own Meme coin, sparking frenzy among both crypto natives and outsiders, creating numerous overnight rags-to-riches stories. Many believed this marked the start of a new bull run—until the release of the $MELANIA token shattered that illusion, cooling market enthusiasm and raising doubts about his true motives. Previously thriving AI Agent projects were heavily drained by $TRUMP and $MELANIA, compounded by disruptions from deepseek, remaining sluggish. While Meme mania continues, the peak market caps of countless tokens keep shrinking, and their lifespans grow shorter. After the euphoria, major coins continue falling. We must ask: Is Trump’s pro-crypto stance driven by genuine builder intent—or is he maximizing benefits for his interest groups and U.S. hegemony at all costs, draining the ecosystem dry and leaving nothing behind?
In the short term, the market will inevitably experience wild swings absorbing these major shifts. But long-term value growth and industry maturation require more than policy tailwinds—they demand a two-way博弈 between markets and politicians. Judging from his promises and statements, Trump appears supportive of crypto. Yet his dramatic reversals on past positions make full trust difficult. Will he truly go all-in to advance cryptocurrency and turn America into a crypto haven? Known for unpredictability, will Trump actually implement the promised pro-crypto policies once in office—or were they merely surface-level gestures to gain political advantage? All these questions remain deeply uncertain.
For crypto investors, Trump’s current stance and policy direction act like a double-edged sword. If he delivers on his promises and fosters a relaxed, welcoming environment for crypto, the industry may see a new wave of prosperity. But Trump’s frequent sanctions on other countries, the controversial business practices of him and his family, and internal divisions within his team all heighten global economic and political instability. This unpredictability increases investor anxiety and exerts downward pressure on the crypto market.
Indeed, Trump’s tariff hikes are just the beginning of his administration’s impact on the crypto world. Going forward, as he advances policies across economic and diplomatic fronts, the crypto market will likely face even more intense volatility. Investors in this environment must closely monitor policy developments and exercise greater caution in their investment decisions.
The bigger the wave, the bigger the fish. Regardless of what unknowns lie ahead, the ship of crypto has already set sail, ready to brave the stormy seas.
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