From Truth Social to bitcoin empire: Trump’s $2 billion pivot

Follow the money: Trump’s latest crypto maneuver explained

Donald Trump at the 2024 Bitcoin Conference in Nashville. (Johnnie Izquierdo via Getty Images)

Since President Trump's election in November, the price of bitcoin has skyrocketed. On Election Day 2024, one bitcoin traded below $75,000. Last week, bitcoin reached an all-time high of over $123,000. (On Monday, it hovered around $118,000.)

This is not an accident. Trump has systematically used the power of the presidency to promote bitcoin and other cryptocurrencies.

On Monday, Trump Media & Technology Group (TMTG), a publicly traded company majority-owned by Trump, announced that it had acquired $2 billion in bitcoin. Trump is turning a failing media company into a bitcoin holding company. TMTG, the parent company of Truth Social, lost over $185 million on just $3.6 million in revenue in 2024.

TMTG is mimicking a strategy pioneered by Microstrategy. The company, now known as Strategy, officially sells software and other technology services, but it is really in the business of buying bitcoin. (Strategy and similar bitcoin-focused companies are valued far above their actual bitcoin holdings, for reasons that aren’t entirely clear.)

If the price of bitcoin continues to rise, the move could pay off handsomely for TMTG and Trump. The difference is that TMTG does not just have to hope bitcoin prices rise. Trump has the authority to take actions that will drive the price of bitcoin higher. If recent history is any guide, that is exactly what Trump will do.

On January 23, shortly after taking office, Trump signed a pro-crypto executive order, Strengthening American Leadership in Digital Financial Technology, signaling strong support for the crypto industry. Trump's executive order repealed a 2022 executive order by former President Joe Biden, which included a variety of provisions to "protect consumers, investors, and businesses" from financial risks. Trump's executive order underscored that "individual citizens and private-sector entities" had a right to use "open public blockchain networks without persecution." Under Biden, the Securities and Exchange Commission (SEC) had investigated and charged crypto trading platforms and others for marketing unregulated securities to Americans. It also established the "President’s Working Group on Digital Asset Markets," chaired by David Sacks, a venture capitalist and crypto investor who joined the White House as a special advisor. In other words, the world was on notice that more good news for the crypto industry was forthcoming.

It came on March 6, when Trump signed an executive order establishing a "Strategic Bitcoin Reserve and U.S. Digital Asset Stockpile." The federal government was getting into the business of acquiring and holding bitcoin and other cryptocurrency assets. It is unclear how the American public benefits from the creation of such a stockpile. But the announcement was a boon to bitcoin investors. Their assets now had the imprimatur of the world's largest economy.

On April 9, the Senate confirmed Paul Atkins, Trump's pick to chair the SEC. Atkins was a member of the SEC during the George W. Bush administration. After leaving that position, he became CEO of a consulting firm where he advised numerous clients in the crypto industry. He also served as co-chair of the Token Alliance, a crypto industry lobbying group. After taking office, Atkins announced he would "accommodate the crypto industry" and establish a "rational regulatory framework." He bemoaned that the crypto industry "has been stifled for the last several years" due to the enforcement of securities laws. He quickly dropped several SEC lawsuits against major players in the crypto industry, including a long-running lawsuit against the crypto payment network Ripple.

Most recently, on July 18, Trump signed the GENIUS Act, the first major piece of legislation to regulate the cryptocurrency industry. The new law, largely written by crypto lobbyists, sets standards for stablecoins — cryptocurrency tokens pegged to the value of a government currency, such as the U.S. dollar. Bitcoin is not a stablecoin, but stablecoins are used to facilitate many crypto transactions. The GENIUS Act, by legitimizing stablecoins, sets the stage for wider adoption of crypto overall, including bitcoin. Trump also has a large financial interest in a crypto company, World Liberty Financial, which recently launched its own stablecoin, known as USD1. Major banks may follow suit.

This could all just be the beginning. Trump is considering a host of other moves to further boost bitcoin's value, including allowing 401(k) retirement plans to invest in bitcoin, eliminating or reducing capital gains taxes on crypto, directing the Federal Reserve to hold Bitcoin as part of its foreign currency reserves, and shifting most regulation of bitcoin and other cryptocurrencies from the SEC to the more permissive Commodity Futures Trading Commission.

The widespread adoption of cryptocurrencies, which are highly volatile and have little practical utility, poses a risk for the American economy. When FTX collapsed, the broader impacts were limited because FTX had relatively few connections to the broader economic system.

Trump appears less concerned with those risks than simply pumping up the value of bitcoin. And now he has another vehicle to profit from his future pro-bitcoin policy moves.

How Trump changed his mind on crypto

Trump has not always been an ally to the crypto industry, famously calling bitcoin a "scam" in 2021. But an intense lobbying campaign during the run-up to his re-election changed Trump's mind, and the payoffs for the industry and his campaign were massive.

Trump’s first foray into the crypto industry was pushed by a former business partner, Bill Zanker. In 2022, Zanker convinced Trump to sell non-fungible tokens (NFTs), which utilize the same technology as crypto, with his likeness — essentially $99 digital Trump baseball cards. The NFTs sold out almost immediately, and Trump made millions.

The crypto industry’s courtship of Trump began in earnest at the start of 2024, according to the New York Times. Crypto executive David Bailey led the charge, showing Trump how the price of Bitcoin had grown during his first term and convincing him that crypto supporters could be tapped as voters and donors. Soon after, Trump gave a speech attacking Democrats like Biden and Senator Elizabeth Warren (D-MA) for supporting regulation of the crypto industry. A few months later, Bailey arranged for Trump to be the keynote speaker at Bitcoin’s annual conference, where he first announced his support for a national Bitcoin reserve.

Trump’s embrace of crypto provided a sizable fundraising boost. The New York Times reported that Bailey raised $30 million for the Trump campaign from fellow crypto executives. Sacks also hosted a multimillion-dollar fundraiser with San Francisco tech executives. Major crypto investors like Marc Andreessen, Ben Horowitz, and Tyler and Cameron Winklevoss donated millions of dollars to various pro-Trump super PACs. In total, the crypto industry accounted for over half of all corporate money in the 2024 election across federal races, raising $245 million.

The Trump campaign also accepted millions of dollars in donations in the form of cryptocurrency. In October, the Trump 47 joint fundraising committee reported $7.5 million in crypto donations. Bailey contributed nearly $500,000 in bitcoin, adding to the committee’s $5 million bitcoin stockpile and $1.5 million in Ether.

After Trump won re-election, cash from the crypto industry continued to pour in. Ripple donated $5 million to Trump’s inauguration committee, the second largest sum from a single donor. Crypto exchanges Coinbase and Kraken each donated $1 million, as did Circle, a stablecoin company which sells tokens based on the U.S. dollar’s value. Additionally, Bailey hosted a sold-out inauguration party sponsored by several other crypto companies.

Sacks' secret

The financial conflicts in the White House go beyond Trump. Sacks, Trump’s crypto czar, is continuing to work as a partner at Craft Ventures, a venture capital firm co-founded by Sacks that has investments in crypto companies.

A memo released by the White House in March states that Sacks and Craft Ventures divested over $200 million in digital-asset related investments. However, the memo also states that Craft Ventures continues to hold “private equity of digital asset-related companies that are highly illiquid and thus not easily divested.” At the time of the memo, Sacks also had a direct interest in a venture capital investing platform “that may presently have some minor digital asset industry holdings or might in the future.”

Normally, government employees are subject to conflict of interest laws. But the White House has issued multiple waivers to allow Sacks to work in the Trump administration while maintaining his investments. The first waiver, released in the March memo, allows Sacks “to participate as a special government employee in certain particular matters regarding regulation and policy related to the digital asset industry, including cryptocurrency.”

The White House memo acknowledges that Sacks’ work in the Trump administration could affect his investments, but argues that his personal financial interest is “not so substantial as to be deemed likely to affect the integrity of [his] services.”

The White House has not released Sacks financial disclosures, so Sacks' actual crypto investments and conflicts are not publicly known. Sacks is required to file a financial disclosure, but it does not have to be released publicly “unless [he begins] drawing a substantial government salary,” NBC reported. Sacks’ work as a part-time “special government employee” was reportedly designed specifically so that Sacks could remain at Craft Ventures.

In May, Warren, ranking member of the Senate Banking Committee, wrote a letter to the U.S. Office of Government Ethics asking for Sacks’ financial disclosures to be released publicly. “Sacks simultaneously leads a firm invested in crypto while guiding the nation’s crypto policy,” Warren wrote in a press release. “Normally, federal law would prohibit such an explicit conflict of interest.”