Happy Tuesday and welcome back to the Blockspace newsletter!

Trump took office as the 47th President of the United States yesterday, and during his campaign, he made a number of policy promises for a Bitcoin and crypto industry that is used to ambivalence at best and hostility at worst from the government. For today’s newsletter, we cover these policies, and raise the question: will Trump keep his word?

Will Trump make good on his Bitcoin promises?

The Orange Man is back in the White House, and he made a fair share of promises about Orange Coin – and its orbit of crypto assets – on his campaign trail to the Oval Office. Now that President Trump is back, Bitcoiners and the cryptosphere at large are waiting to see if he’ll make good on these promises. 

But so far, all he’s done is launch his eponymous memecoin. Does that necessarily undermine his campaign pledges? Probably not, but it certainly may call into question whether he takes “Bitcoin, crypto, and everything else [we’re] playing with” seriously.

In an effort to curry favor with Bitcoin patricians and plebs alike, Trump’s promises catered to the crypto industry’s survival instinct (turn down the heat on crypto regulatory actions), to number-go-up cupidity (establishing a Strategic Bitcoin Reserve), and to crypto-anarchist fantasy (the pardoning of Silk Road Founder Ross Ulbricht). 

Let’s break down each promise, one-by-one.

Strategic Bitcoin Reserve

Last summer at Bitcoin 2024 in Nashville, Trump promised that, “it will be the policy of my administration to keep 100 percent of all bitcoin the US government currently holds or acquires in the future … as a core of the strategic national bitcoin stockpile.” 

There have been few specific details from the Trump campaign itself around this claim, but the base assumption is that he would use an Executive Order to prevent the federal government from selling any bitcoin it currently holds. The government acquired the majority of this bitcoin (currently 198,109 BTC as of Jan 15) through seizures related to criminal activities, most notably from the Silk Road darknet marketplace.

But at the time of writing, there are still many unknowns about what forms a Strategic Bitcoin Reserve could take beyond his initial promise. Does Trump intend to expand the United States’ bitcoin reserves by acquiring more BTC? On the federal level, he may be able to expand it by allocating part of the Exchange Stabilization Fund into bitcoin, but the legality of this isn’t clear.  

Cynthia Lummis put forward a bill parallel to Trump’s promise which would direct the US Treasury to buy up to 1 million BTC, but Congress would need to ratify this.

We gave our predictions on what the SBR might look like last week. TL;DR: We’re skeptical of anything but an Executive Order in the short term, which a following organization could easily overturn.

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Crypto-friendly SEC and Crypto Advisory Council

In his Bitcoin 2024 keynote, Trump said that, when he takes office, laws and regulations will be written by “people who love your industry” rather than those “who hate it.”

This was followed by a promise to “fire Gary Gensler on day one,” to which the audience replied with thunderous applause in clear repudiation of Biden’s SEC chair. Well, ole Gensler beat Trump to the punch and announced his resignation shortly after the election. 

To fill his place, President Trump has appointed Mark Uyeda, an SEC Commissioner since June 30, 2022. While on Fox Business last October, Uyeda criticized the SEC’s treatment of crypto as “a disaster for the whole industry.” He particularly lambasted Gary Gensler’s SEC for “guidance by enforcement,” which refers to discretionary enforcement actions against cryptocurrency practitioners – typically, companies that launched initial coin offerings (ICOs) – without any lucid guidance or industry-specific policies. For years, the SEC pointed to the Howey Test, a checklist designating what the Commission looks for when evaluating what is or isn’t a security that resulted from a 1946 Supreme Court case, as a litmus test for whether or not a cryptocurrency is a security.

Continue reading here.

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