Crypto is quickly returning Trump’s investment after funding the campaign

Cryptocurrency executives, companies and investors are getting an early return on their funds investment Art Donald Trump.

After pouring tens of millions of dollars into Trump’s 2024 presidential campaign, the crypto industry has paid off handsomely in his first week in the White House.

“I don’t think they could have imagined a better result than what they just got in the last 48 hours,” Benchmark’s Bill Gurley, a well-known an early bet on Ubertold CNBC “Closing Bell” on Friday. Gurley said that while the new tech influence in Washington may be bad for some parts of the startup world, “it’s obviously good for crypto.”

Trump’s industry support was based on the Republican leader’s promise to end the government’s crackdown on cryptography and implement regulations favorable to those looking to develop new types of payment technology, while easing restrictions on cryptocurrency investment.

Industry heavyweights I like it Coinbase CEO Brian Armstrong and Binance CEO Richard Teng hail the start of a new era.

“You have to remember that for the last four years we have really felt that this administration is attacking us,” Armstrong told CNBC at the annual World Economic Forum in Davos, Switzerland. Armstrong criticized the Biden White House for trying to “weaponize the lack of clarity in the rules,” punishing even companies that were trying to be helpful.

“To be fair, there have been some bad actors,” Armstrong said. “But they even really tried to go after good actors, I think, like us.” Coinbase was one of the leading corporate donors in the 2024 election cycle.

Bitcoin hit a record high of around $109,000 on Monday and hovered around $105,000 by the end of the week. That’s up more than 50% since Trump won the election in early November.

The 48-hour stretch Gurley refers to included executive order signed by Trump on Thursday to promote the adoption of digital assets in the US

Trump called on members of the Treasury, SEC and Commodity Futures Trading Commission to join forces in a task force to assess the potential hoarding of government-seized cryptocurrencies.

The order outlined other key priorities, such as protecting bitcoin miners and software developers from what the president called “harassment” and promoting stablecoins pegged to the U.S. dollar while the Federal Reserve bans the digital dollar.

Venture capitalist David Sachs, who Trump knocked to be the White House AI and crypto czar, joined the president in the Oval Office to sign the executive order.

Later on Thursday, the SEC made a landmark announcement, taking off an accounting rule that made it difficult for institutions to adopt crypto, forcing banks to treat bitcoin and other tokens as liabilities on their balance sheets.

The rule, known as SAB 121, was introduced in 2022 and subjected digital assets to strict capital requirements. It also increased the financial and regulatory risks associated with offering crypto custody services and increased the operating costs of financial institutions.

Efforts to repeal SAB 121 received bipartisan support in Congress last year. But then-President Biden vetoed the proposed legislation, leaving the rule intact, further discouraging banks from adopting digital assets beyond trading derivatives and offering exchange-traded funds to wealth management clients.

The move was noted by SEC Commissioner Hester Pierce, who on Tuesday was appointed to lead a new “crypto task force” at the agency.

“Bye, bye, SAB 121! It wasn’t fun,” she wrote in a publish on X.

Prior to the SEC announcement, Goldman Sachs CEO David Solomon told CNBC in Davos said that from a regulatory perspective, a bank cannot own bitcoins and that it will review the matter if the rules change. General directors of the company Morgan Stanley and Bank of America also said President Trump’s pro-crypto tone could change their plans and potentially lead to expanded digital offerings.

Gary Gensler resigned as SEC chairman a few days earlier. Gensler, who has become an opponent of the crypto industry, defended the rule as necessary to protect investors in the event of the bankruptcy of crypto firms. Trump has chosen a former SEC commissioner to succeed Gensler Paul Atkinswho is currently the CEO of Patomak Global Partners.

On TuesdayOn his second day in office, Trump pardoned Ross Ulbricht, the founder of Silk Road. Ulbricht, 40, has been serving life in prison without the possibility of parole since 2015 after being convicted in federal court on seven charges which included drug distribution and conspiracy to commit computer hacking attacks.

Silk Road operated from 2011 to 2013, serving as a dark web marketplace where users bought and sold various contraband goods, including illegal drugs such as heroin. Platform sales totaled more than $200 millionand has been linked to the deaths of at least six people, according to federal prosecutors.

At its peak, the Silk Road functioned as a global narcotics bazaar, where transactions were mainly carried out bitcoinmaking it one of the earliest large-scale applications of cryptocurrency. Prosecutors later argued that the anonymity provided by bitcoin allowed Silk Road vendors to mask their identities.

Ulbricht has become something of a cult hero in the crypto community, and “Free Russia” the movement gained resonance among conservative media and politicians.

“I just called the mother of Ross William Ulbricht to let her know that in honor of her and the Libertarian Movement that has supported me so strongly, I have just been pleased to sign a full and unconditional pardon for her son Ross.” Trump wrote in a post on Truth Social on Tuesday.

Changpeng Zhao, billionaire co-founder and former CEO of Binance, commented on X with a clapping emoji after the pardon was announced. Zhao was awarded to four months in prison in April after pleading guilty to money laundering at his crypto exchange.

It is especially characteristic that the president is playing in the part of the market that is famous for fraud. Over the weekend, while crypto leaders and members of Trump’s family and inner circle feasted on Crypto ball in Washington, the $TRUMP meme coin has started circulating online.

Then came the $MELANIA coin. Collectively, the Trump family has made billions of dollars on paper by owning assets created out of thin air. Crypto enthusiasts worry that this is an alarming sign of Trump’s true intentions and damages the credibility of an industry struggling to prove its legitimacy.

“Call me old-fashioned, but I think presidents should focus on running the country, not running token scams,” Nick Carter of Castle Island Ventures wrote in post on X.

The site for $TRUMP says 80% of the supply is owned by the Trump Organization and its affiliates.

Lawmakers also have objections.

Sen. Elizabeth Warren and Rep. Jake Auchincloss, both Democrats from Massachusetts, have raised questions about the first couple’s use of their positions to enrich themselves, as well as the potential for fraud.

“We are writing with deep concern over President Trump and First Lady Melania Trump’s decision to launch two meme coins, $TRUMP and $MELANIA, that will allow them to reap extraordinary profits from his presidency,” the couple said in a letter obtained by CNBC.com. “These coins do not create new, faster, cheaper and more secure payment rails. These coins don’t help people borrow more affordably. They do not in any way improve the financial system for consumers.”

$TRUMP is now trading below $30, down more than 50% from its peak shortly after launch. The $MELANIA token has fallen more than 80% from its peak and is currently trading below $2.50.

Meme coins follow a multi-year vesting schedule that ensures most tokens cannot be liquidated all at once. No sale of any tokens, ex Coinbase executive and cryptanalyst Conor Grogan estimates that the Trump team still took in $58 million in merchandising fees on the first day.

Skepticism is not limited to meme coins.

In Trump’s executive order on Thursday, the president failed to order the U.S. to begin directly buying bitcoins and holding them as reserves.

Ahead of the order, Binance CEO Richard Teng told CNBC in Davos that he expected the US to create a strategic bitcoin reserve. Circle CEO Jeremy Aller called it “sensible” for central banks to hold bitcoin reserves.

Trump floated the idea on the campaign trail, suggesting that the U.S. bitcoin reserve could be backed by crypto assets seized from hackers and fraud groups, and the proposal is still under consideration.

But in his 1,300-word executive order Thursday, Trump didn’t just shy away from calls for a bitcoin reserve. The word bitcoin was nowhere to be found.

— CNBC’s Ryan Brown contributed to this report.