Trump, Musk, Crypto, and Ireland

Donald J. Trump and Elon Musk

One of the lesser-known side effects of Trump's victory in the US presidential election was the significant surge in the value of Bitcoin and cryptocurrencies in general. Bitcoin experienced a remarkable 33% increase, nearly reaching the USD 90,000 mark around the time of the election, and has continued to rise, hitting just over USD 97,000 as of early February 2025. Dogecoin, Musk's favoured cryptocurrency, also saw a 20% increase in value following Trump's election win. Musk, a prominent supporter of Trump and cryptocurrencies, is expected to play a significant role in Trump's administration.

Throughout the presidential campaign, Trump notably shifted his stance on cryptocurrencies. Initially a sceptic, more recently he appears to fully embrace the concept. His statements about making the US the "crypto capital of the planet," investing in crypto on a national scale, building a reserve as a hedge against flat currencies, and introducing reforms to facilitate the holding and trading of cryptocurrencies have all contributed to the spike in cryptocurrency values. This approach contrasts sharply with the Biden administration and SEC Chairman Gary Gensler, who viewed the industry as rife with "fraud, scams, and abuses." The prosecution of Sam Bankman-Fried, head of the crypto exchange FTX, underscored their commitment to addressing perceived crypto abuses. For a comprehensive review of this situation, Michael Lewis's book "Going Infinite: The Rise and Fall of a New Tycoon"  provides interesting insights.

Trump's positive stance on cryptocurrencies may be influenced by his family's recent venture into the crypto business.  During the presidential campaign, his family launched World Liberty Financial, a cryptocurrency company. Regardless of the motivation, it appears that the US will see a favourable environment for cryptocurrencies to flourish over the next four years.

Ireland

In recent years, Ireland has emerged as a European leader in digital asset exchanges, with three significant players now based there. In 2023, an Irish subsidiary of the US crypto asset exchange Kraken received its virtual asset service provider authorisation from the Central Bank of Ireland, following similar authorisations for Coinbase and Gemini. Kraken, in particular, is a major global player, ranking third in daily trading volumes for assets such as Bitcoin and other cryptocurrencies. Ireland's prominent position in this new frontier means that any increased acceptance of cryptocurrencies from the world's largest economy will significantly impact the viability of these businesses and the industry as a whole.

The new EU regulation on markets in crypto-assets (MiCA), effective from December 30, 2024, will further enable exchanges like Kraken to provide their services EU-wide. This regulation will also offer reassurance to users by implementing measures to prevent the abuses the SEC sought to address. This development will create a vital bridge from the US to the EU market in this growing area.

A Crypto Future

Ireland's established position as a European leader in fintech, its favourable corporate tax regime, and its deep pool of tech-savvy talent contribute to a robust ecosystem that will help Ireland capitalise on the positive momentum from the US in the cryptocurrency space. Although seemingly unrelated, the convergence of a new Trump administration and new EU regulations on asset exchanges presents a timely opportunity for Ireland to lead in holding and trading cryptocurrencies and digital assets more broadly.

Written by Aaron McGarry