President Trump Has Been in Office for Less Than 2 Months. Here's What He Could Do for Cryptocurrency Over the Next Year.

Changes to the crypto market have been happening at warp speed in 2025. We're only two months into the second presidency of Donald Trump, and we've already seen a scaling back of the Security and Exchange Commission's crypto oversight power, the creation of a Strategic Bitcoin (CRYPTO: BTC) Reserve, and a proliferation of executive orders related to digital assets.

That's just the start. There's more that could be coming during the next 12 months. Here's a brief overview of three key developments to watch and what they could mean for your crypto portfolio.

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New buying authority for the Strategic Bitcoin Reserve

Let's start with the one development that's at the top of every Bitcoin investor's mind, and that's the creation of the Strategic Bitcoin Reserve in March. As it currently stands, the U.S. will consolidate its holdings of 200,000 bitcoins into one centralized reserve. And, unlike past administrations, it plans to never sell coins.

However, there's much more that the Trump White House could be doing. For example, the Trump team has left open the possibility of finding new budget-neutral strategies to buy even more Bitcoin. The big idea here is that the government won't use taxpayer funds to buy more Bitcoin. Moreover, the government won't increase the nation's debt by buying new Bitcoin.

So, it will require a little creativity to get things right. Already, a number of different ideas have been proposed -- everything from revaluing gold certificates held by the Federal Reserve to using some of the cost savings created by the Department of Government Efficiency -- to open up new buying authority for the U.S. government.

If that happens, of course, it would be a huge development and would almost certainly send the price of Bitcoin soaring. Under the Bitcoin Act of 2024, the government was supposed to purchase 200,000 bitcoins per year for the next five years, for a total of 1 million bitcoins. That scale of Bitcoin buying is unprecedented.

Legendary Bitcoin bull Michael Saylor, the founder and executive chairman of Strategy (formerly MicroStrategy), recently upped the ante. He now wants the U.S. government to buy as much as 25% of the total circulating Bitcoin supply (roughly 5 million Bitcoins) by 2035.

New comprehensive regulation for the crypto industry

Next up on everyone's crypto wish list is the establishment of comprehensive regulation for the U.S. crypto industry along the lines of the new Markets in Crypto Assets (MiCA) regulatory framework for the European Union.

Right now, the U.S. lacks a comprehensive regulatory framework for crypto, and that's causing a number of market deficiencies. For one, it leads to scammers, grifters, and outright criminals doing things with crypto that shouldn't be legally possible. After the collapse of Sam Bankman-Fried's FTX cryptocurrency exchange in November 2022, industry leaders were begging the government to do something -- anything -- to protect the integrity of the crypto industry. But little happened under the Biden administration.

Moreover, the lack of a clear regulatory framework leads to a lot of market uncertainty. Why go to all the trouble of creating a new product or service for customers if there's a risk that the government might deem it illegal at some point in the future? This is exactly what happened to major cryptocurrency exchanges in 2023 when the SEC decided to crack down on a common crypto activity known as staking.

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Right now, there are several key pieces of legislation awaiting the president's signature at some point in 2025. The low-hanging fruit is the GENIUS Act of 2025, which will help to regulate the $200 billion stablecoin market. "GENIUS," as you probably guessed, is an acronym. It stands for "Guiding and Establishing National Innovation for U.S. Stablecoins." Pending congressional approval, Trump is expected to sign this into law sometime within the next two months.

Why stablecoins, you might ask? Well, the Trump White House now views stablecoins as the key to continued U.S. dollar dominance. In the non-crypto world, the dollar is the global reserve currency. So, in the crypto world, the thinking goes, the dollar also should function as a global reserve currency.

This logic makes sense when you consider that most stablecoins are pegged 1-to-1 to the U.S. dollar. More demand for stablecoins means more demand for U.S. dollars, so it's important to keep the U.S. stablecoin market in, well, stable condition.

A splashy new move for Bitcoin mining?

During the presidential campaign, Trump promised to support the Bitcoin mining industry. He said that he wanted all Bitcoins to be mined in the U.S. He also suggested that, given the energy-intensive nature of Bitcoin mining, he would be willing to invest in new energy infrastructure to make that happen.

A big, splashy move for Bitcoin mining could be huge for crypto. Of course, this would need to go far beyond just offering tax incentives for Bitcoin miners to relocate to the U.S.

For example, the U.S. government might launch a Bitcoin mining program of its own. This would ensure that new Bitcoin is 100% domestic. Given that the Trump White House views Bitcoin as a national strategic priority, that might not be as far-fetched as it sounds.

Which cryptos should you buy?

Considering the above, the most obvious investment target for 2025 is Bitcoin. In many ways, all roads -- the new Strategic Bitcoin Reserve, new crypto regulation, and new steps to support Bitcoin mining -- lead to Bitcoin.

While the White House has no official price target in mind for Bitcoin, it is not surprising that it is keeping a close eye on Bitcoin's price as a proxy for how well its crypto policies are working.

That should provide some peace of mind to potential Bitcoin investors. If the price of Bitcoin remains less than $100,000, you can be sure that the brightest minds in Washington, D.C., will be working overtime trying to figure out what they can do next.

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Dominic Basulto has positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy.