Can Bitcoin help reduce the US national debt?
Cryptocurrency is still not widely owned. To invest in it, you need a digital wallet, but most banks don’t offer crypto as an investment option. The government has treated digital currencies as risky assets because they can be transferred instantly with little oversight. Unlike traditional money, most cryptocurrencies have no inherent value. Their prices fluctuate rapidly based on speculation, meaning they are worth only what people are willing to pay.
(Note: It is recommended that you invest a small amount in Bitcoin. You will need to set up an account and ID yourself. DO NOT invest more than you can afford to lose. View the account as a piggybank investment that you set and forget. - Use a U.S.-based stock market company. Receive a $20 gift, and the channel will receive the same.)
The broader economy remained largely unaffected when the crypto market crashed three years ago. The value of Bitcoin and other digital currencies plunged, leading to multiple bankruptcies and sending top executives to prison. Some analysts even called it crypto’s version of the Great Recession. Despite the turmoil, most people didn’t feel any financial impact.
That could change under President Trump. He has been vocal about his support for cryptocurrency, actively promoting digital coins to his followers—and profiting when they buy them. He has proposed creating a federal Bitcoin reserve and making it easier for companies to issue new cryptocurrencies. If his policies take effect, more Americans could become crypto investors, exposing them to the market’s risks.
Experts warn that the next crypto crash could have more severe consequences. As digital currencies become more connected to mainstream finance, an industry-wide collapse could ripple through the economy, affecting a broader range of investors. Today, we’ll look at three ways Trump strengthens crypto’s ties to traditional financial markets.
Trump’s Crypto Coin
One of the riskiest forms of cryptocurrency is the meme coin—a digital token created as a joke or tied to a celebrity. These coins have no real-world use and are not accepted as payment by businesses.
Just three days before his inauguration, Trump launched his own meme-coin, $Trump, and heavily promoted it on social media. Investors rushed to buy in, and the price surged. The Trump family collected millions in transaction fees, effectively putting a presidential stamp on a speculative asset.
The boom didn’t last. Overnight, the price of $Trump fell by 60%, leaving hundreds of thousands of investors with massive losses. Crypto forensic analysts found that most buyers were first-time investors who likely didn’t understand the risks.
Loosening Regulations
Under the Biden administration, regulators took a tough stance on crypto. The Securities and Exchange Commission (SEC) launched lawsuits to classify digital currencies under the same strict rules that govern stocks and bonds. This crackdown aimed to protect consumers from scams, as many fraudulent crypto projects had taken money from investors and disappeared before the coins lost value.
Trump, on the other hand, has promised to end what he calls the government’s “war on crypto.” Industry leaders are pushing for a law that would remove crypto oversight from the SEC and place it under a smaller, less aggressive agency—the Commodity Futures Trading Commission (CFTC).
If this happens, two major changes could follow. First, scammers may feel emboldened, knowing there will be fewer restrictions and weaker enforcement. This could lead to an increase in risky, unregulated coins marketed to unsuspecting investors.
Second, major banks and financial firms may get more involved in crypto. Investing in digital currencies requires setting up a complicated wallet and navigating an unfamiliar financial system. Wall Street firms want to simplify this by offering investment funds tied to crypto, allowing people to buy shares in these funds just like they would with stocks. Some companies already provide Bitcoin investment products, but the SEC has discouraged similar offerings for other cryptocurrencies due to concerns over market crashes. Trump’s allies are hoping to change that.
A U.S. Bitcoin Reserve
During a speech in Nashville last summer, Trump proposed the idea of a “national Bitcoin stockpile.” While he didn’t provide details, crypto industry leaders have pushed for the U.S. government to hold Bitcoin in a strategic reserve, similar to how it holds oil and gold. They argue that as Bitcoin’s value rises, it could help reduce the nation’s $36 trillion debt and strengthen America’s financial position if cryptocurrencies become central to the global economy.
Last month, Trump directed a task force to study this possibility. However, if the government invests in Bitcoin, the consequences of a market crash could be far more serious. Instead of just affecting individual traders, a major downturn could impact the country’s financial stability.
As Trump moves forward with his crypto-friendly policies, the risks and rewards of digital currency could soon become a much bigger part of everyday American life.
