Trump’s Cryptocurrency Push: European Regulatory Implications

Following former U.S. President Donald Trump's endorsement of cryptocurrencies at the Bitcoin 2025 conference, the crypto market experienced

Written by: Arslan Butt • Monday, July 29, 2024 • 1 min read

• Last updated: Monday, July 29, 2024

Following former U.S. President Donald Trump’s endorsement of cryptocurrencies at the Bitcoin 2024 conference, the crypto market experienced a notable surge.

Trump’s promises to establish the U.S. as a global crypto hub and to form a strategic Bitcoin reserve have stirred significant interest. His commitment to ousting SEC Chair Gary Gensler and fostering a regulatory environment conducive to cryptocurrencies contrasts sharply with the current administration’s approach. This has led to a rally in Bitcoin, which saw a significant increase in value, approaching near record highs.

The surge in open interest suggests increased investor demand and potential for a price breakout.

Over 75% of Bitcoin’s short-term holders were in profit as of July 24, indicating strong retail demand and potential for upward momentum.#Bitcoin #Trump #cryptocurrency #interest pic.twitter.com/tvyYaOBEsM

— Zulfiqar Ali (@AliZulfiqar_) July 29, 2024

EU Faces Regulatory Challenges Amid Crypto Resurgence

Trump’s proactive cryptocurrency stance could compel European policymakers to revisit their regulatory frameworks. Europe’s regulators might feel pressured as Trump’s policies could reinforce the dollar’s dominance in digital tokens, potentially undermining the euro.

The European Commission’s Digital Finance Package, which includes the Markets in Crypto Assets (MiCA) regulation, aims to balance innovation with risk mitigation. Adopted in stages, MiCA’s full implementation by December this year is pivotal in shaping the EU’s digital asset landscape.

Following Trump's pro-crypto speech, Bitcoin reaches a six-week high.#latestnews #cryptocurrency #bitcoin #trump #horixon pic.twitter.com/RvLRqTKFqr

— Horixon (@Horixonofficial) July 29, 2024

Potential Risks and the Euro’s Stability

The rise of USD-pegged stablecoins represents a further challenge to the euro’s standing. As these stablecoins need dollar reserves to maintain price stability, increased demand could inadvertently strengthen the U.S. dollar against the euro.

Trump’s potential re-election and his cryptocurrency policies could increase the issuance of stablecoins, putting additional pressure on the euro. European regulators are thus on high alert, monitoring these developments closely to safeguard the euro’s integrity in the face of burgeoning digital currencies.

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ABOUT THE AUTHOR See More

Arslan Butt

Lead Markets Analyst – Multi-Asset (FX, Commodities, Crypto)

Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics. His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker. His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.