"Coin, Not Money and Worthless" The Inside Story of Trump Becoming the 'Coin President' [AK Radio]

A Complete Turnaround from the Previous Election

Bitcoin prices have reached an all-time high, surpassing $106,000 (approximately 150 million KRW) following the inauguration of the 47th President of the United States, Donald Trump. The virtual asset market is showing unprecedented strength alongside changes in President Trump's policy stance, drawing global investors' attention. Market experts have dubbed this phenomenon the "Trump Rally," heralding the dawn of a new era in virtual assets.

Particularly noteworthy is President Trump's dramatic shift in stance toward cryptocurrencies. During his first administration in 2019, he strongly criticized cryptocurrencies, stating that "coins are neither money nor have any value." However, during this election cycle, he adopted a completely different approach, campaigning with the slogan "I will be America's first cryptocurrency president." Notably, President Trump announced a pledge to purchase Bitcoin as a strategic asset for the United States, significantly raising market expectations. These remarks are seen as signaling the potential reorganization of the global financial order surrounding cryptocurrencies.

Two main factors are analyzed as the background to this change. First is a political strategy to secure support from the younger generation. The American MZ generation invests over 40% of their total assets in cryptocurrencies including Bitcoin, more than double the stock investment rate (16%). As the Biden administration has shown a negative stance toward cryptocurrencies, causing a loss of young Democratic supporters, the Trump camp strategically capitalized on this. In fact, a correlation has been observed where Bitcoin and the cryptocurrency market rise in tandem with increases in President Trump's approval ratings, serving as a clear example of the close relationship between politics and the virtual asset market.

At the '2024 Bitcoin Forum' held in Nashville, Tennessee, USA, in July last year, then-presidential candidate Donald Trump campaigned, claiming he would implement cryptocurrency-friendly policies. Photo by AP and Yonhap News

The second, even more notable factor involves the interests of the oil drilling industry, a traditional support base of the Republican Party. During the COVID-19 pandemic, oil drilling companies struggling due to the drop in international oil prices massively entered the coin mining business. They established a hybrid operational system that uses the natural gas flared off during oil drilling to power gas turbines, which in turn generate electricity to operate mining farms.

This created a structure where the rise in coin value directly translates into profits for drilling companies, which is also linked to Republican political funding. Industry experts evaluate that this structural change decisively influenced the Trump administration's shift in cryptocurrency policy. Attention is particularly drawn to the emergence of a new business model combining the fossil fuel industry with digital assets, which is becoming a diversification strategy for traditional energy companies.

The Trump administration is further actively considering officially recognizing Bitcoin as a strategic asset of the United States and setting an annual mandatory reserve purchase amount. This approach is similar to how the U.S. Federal Reserve (Fed) purchases gold, interpreted as a strategy to enhance the stability of the cryptocurrency market while strengthening U.S. influence. Additionally, some within the Republican Party have proposed stockpiling Bitcoin like gold and issuing a linked "Dollar Coin." This is part of a strategy to establish U.S. dominance in the cryptocurrency market currently led by China and Russia, aiming to maintain the dollar's status as the global reserve currency in the digital age. Financial experts predict that if these policies are realized, they could bring fundamental changes to the global financial system.

AP·Yonhap News

However, just before his inauguration, President Trump released the "Trump Coin" named after himself and a coin named after his wife Melania, sparking controversy over political conflicts of interest. Experts point out that this is comparable to a president-elect making real estate investments right before taking office, raising suspicions that President Trump still perceives cryptocurrencies merely as political tools. This controversy has raised concerns about the credibility and transparency of the virtual asset market and has led to discussions on the need for related regulatory policies.

Currently, U.S. financial authorities are forming a virtual asset task force (TF) and preparing related policies. The market expects the so-called "Trump Rally" in the cryptocurrency market to continue for the time being. Especially if the U.S. government's Bitcoin reserve policy is realized, expectations are high that price volatility will decrease and a stable upward trend will be observed.

However, some express concerns that the Trump administration's cryptocurrency policies could change depending on individual political interests, necessitating cautious approaches from market participants. Global financial market experts foresee that the Trump administration's cryptocurrency policies could present a new paradigm for the digital financial era beyond mere market activation, while emphasizing that policy consistency and securing market stability are prerequisite tasks.