Donald Trump’s honeymoon with the cryptocurrency industry may be over. At the very least, the Dogecoin campaign donations he received last month are likely worth much less now than they were three weeks ago.
This is because cryptocurrency prices (like many stocks) are currently underperforming. Coindesk reported that the price of Bitcoin plunged 15% in one day, while Ethereum also fell by 21% in 24 hours. Well-known exchange Coinbase fell 17%. Many other cryptocurrency-related businesses have experienced similar disastrous slides.
In fact, the cryptocurrency market is experiencing what observers call a “perfect storm.” Some attribute the recent industry scare to one particular event, a unique series of large-scale asset transfers by trading firm Jump Trading. Citing blockchain data, The Block wrote that the company “appears to be liquidating hundreds of millions of dollars worth of cryptocurrency.” During this time, Jump Trading has “unstaked” $315 million worth of ether and sent it to exchanges, giving the impression that it plans to sell off much of its inventory. This apparent cash-out appears to have spooked other investors in the cryptocurrency market, encouraging them to similarly jump on board. The same recession fears prevalent in other parts of the market could also trigger a sell-off – with cryptocurrency traders trying to avoid losses as the market deteriorates.
In short: It’s a very bad time to be in the cryptocurrency industry… which makes it so interesting that former President Donald Trump chose to announce his new embrace of the industry last week.
Yes, Trump showed up at a Bitcoin conference in Nashville, Tennessee, last weekend to try to gain political support from the tech industry. At the conference, Trump announced his enthusiasm for digital assets while also receiving endorsements from some industry heavyweights. His campaign website also offers cryptocurrency donations through a portal that includes integrations with Coinbase and Gemini. As of last week, it looked like the alliance between MAGA and meme creators was off to a good start, but alas, the industry is now in full swing. Like a rookie trader, Trump appears to have entered the market at the wrong time. Well done, sir.
Still, the volatile stock market also gives Trump a powerful political weapon if his modest trashcoin donations are likely to be affected. Trump’s allies quickly weaponized the recession to attack the Biden-Harris administration. #KamalaKrash was trending on X/Twitter on Monday, with right-wingers blaming the current administration for the market’s woes. “The stock market is crashing, the employment data is terrible, and we are headed for World War III,” Trump posted on Truth Social after the topic “Trump Cash and Kamala Collapse!” Brand Promotion.
Kamalanomics is the same as Bidenomics #kamalacollapse #stockcrash pic.twitter.com/NIv3YpDhdv
— Politi_Rican 🇵🇷𝕏🇺🇸 (@TheRicanMemes) August 5, 2024
Many economists believe it was the Fed, not the White House, that slowed job growth and triggered market panic. Critics say Fed Chairman Jerome Powell’s refusal to cut interest rates is increasingly endangering the economy. Notably, it was Trump, not Biden, who nominated Powell for his current job. Powell also ignored the advice of progressive Democrats (and Biden) who urged him to cut interest rates, warning that his policies could trigger a recession. Instead, Trump has spent the past few weeks urging Powell no Cutting interest rates ahead of the presidential election has led experts to blame the forces for the economic downturn.
Still, the U.S. economy remains relatively strong despite lingering inflation and recession fears. More than 15 million new jobs were created during the Biden administration, and the unemployment rate hit a 53-year low in January last year.
