What would happen if Donald Trump changes his mind about cryptocurrencies?

The incoming US president is a sceptic turned champion and the market is responding accordingly – for now

From left, portraits of pro-crypto personalities El Salvador President Nayib Bukele, US president-elect Donald Trump and Tesla Motors chief executive Elon Musk on the exhibition floor of the Bitcoin Mena conference in Abu Dhabi. Pawan Singh / The NationalShow less

Donald Trump once loathed cryptocurrencies. Now, his son Eric Trump guarantees that the returning US president will "fight like hell" to defend them.

The president-elect, however, is notorious for his impulsive decisions. Which begs the question, what if he decides to make another U-turn and withdraw his support for cryptocurrencies?

Top executives of some of the world's largest cryptocurrency companies and analysts believe this is a remote possibility. Such a scenario will have varying outcomes, but Bitcoin, on its own, could come out unscathed – possibly even stronger, they told The National at the Bitcoin Mena conference in Abu Dhabi this week.

In too deep?

In his usual dramatic delivery style that has endeared him to his support base, Mr Trump touted cryptocurrencies on the campaign trail, promising to all but mainstream the innovation, which in turn would allow people to profit.

The promises he made may be too far-reaching for him to abandon, said Khurram Shroff, chief executive of Canada-based iMining Technologies.

"I don't think it can happen [him backing out]. I think he's going to create a lot of people that don't necessarily agree with him and it would be a big public relations nightmare for him," added Mr Shroff, who is known as the "Arab crypto whale".

The two-day Bitcoin Mena event at Adnec in Abu Dhabi explores the transformative potential of cryptocurrencies. All photos: Pawan Singh / The National

Shaping the Future: Strategic Leadership & Bitcoin Adoption in the Middle East session at Bitcoin Mena at Adnec in Abu Dhabi on December 10. Panelists from left to right are Aymman Shaikh, BTC; Dr Ayesha Binlootah, Virtual Assets Regulatory Authority; Bilal Ahmed Mir, Carter Capital and Khurram Shroff, 3iQ.

Sheikh Nahyan bin Mubarak, Minister of Tolerance and Coexistence, attends Bitcoin Mena

Delegates at Bitcoin Mena held at Adnec in Abu Dhabi

Khurram Shroff, adviser at 3iQ, addresses the Shaping the Future session

Vishal Sacheendran of Binance addresses the question of how nations are shaping Bitcoin’s regulatory landscape

Dr Ayesha Binlootah of the Virtual Assets Regulatory Authority talks to the audience at the Shaping the Future session

Visitors at the Binance stand at Bitcoin Mena

Aymman Shaikh of BTC during the Shaping the Future session at Bitcoin Mena

Harris Irfan of CCM and Onramp Mena shares his thoughts on Islamic fiat banking at Bitcoin Mena on December 10

Visitors at Bitcoin Mena at Adnec in Abu Dhabi

Saifedean Ammous from Saifedean.com addresses the session on Bitcoin: A New Frontier for Islamic Finance at Bitcoin Mena

AJ Nelson, co-founder of Rain, discusses regulation at Bitcoin Mena held at Adnec in Abu Dhabi

Sudhu Arumugam of M2 also spoke on regulation at Bitcoin Mena

David Bailey, chief executive of BTC, the parent company of Bitcoin Magazine and The Bitcoin Conference, was more certain, saying: "That's not going to happen."

"That's like asking if Mr Trump would reverse course on his America First policy," he added, noting that the coming president "respects Bitcoin because of its success" – a typical embodiment of the businessman in him.

A price to pay

Bitcoin, the world's first and largest cryptocurrency, soared past the $100,000-mark last week, leaping 40 per cent in the two weeks after Mr Trump won the US elections, as the market prepares for his second presidency's anticipated pro-crypto stance.

It was trading under the $98,000 mark as of Tuesday, now up by nearly half since the November 5 polls, leading a crypto sector whose market capitalisation is now at more than $3.46 trillion, data from CoinMarketCap shows.

Negative news typically hits the value of assets, and Bitcoin having to deal with a hypothetical Trump U-turn would be no different. But some experts see reasons why crypto will withstand headwinds.

First, if for example Mr Trump enacts a law that bars public companies from buying Bitcoin, there might "be lawsuits and lots of other problems [that would] have a massive effect", Mr Khurram said.

Inversely, the widening adoption of cryptocurrencies in more jurisdictions should act as a fallback should the US go "rogue", said Philip Karageorgevitch, the hereditary prince of Serbia and an early crypto adopter.

"Maybe Bitcoin's price might drop, but just a little bit," he said.

Bitcoin is 'the future of finance' says Eric Trump

01:12

That minimal effect is reflected in the fact that regulations on Bitcoin, and cryptos overall, are uneven at best, non-existent at worst. That gives crypto owners the opportunity to take their assets to jurisdictions that enjoy pro-crypto rules.

"There will be other jurisdictions that will sweep up the mess and use it to their advantage. The next country that adopts Bitcoin, from a global strategical, geopolitical and economical standpoint, will be a very big winner," Mr Karageorgevitch said.

There are more than 560 million people who own cryptocurrencies globally as of 2024, which is nearly 7 per cent of the world's population, data from Singapore-based crypto payments company Triple A shows.

The UAE leads in adoption, with more than a quarter of its population estimated to own digital assets, the study said.

This means cryptocurrencies are, now a global asset class that cannot be ignored, which demonstrates their adoption potential to grow further, said Yoni Assia, co-founder and chief executive of trading platform eToro.

"Cryptos are trading in most countries around the world. I think the course of adoption on digital assets is in one direction and we hope to see regulators and governments across the globe and embrace it and continue to support it," he added.

This gives less incentive for governments to minimise or drop its support for it, given the economic potential it brings and especially considering that it is a building block of the future of finance.

Team titans

Mr Trump has all the reasons to protect the cryptocurrency base that helped carry him back to the White House. Apart from two of his closest crypto lieutenants – vice president-elect J D Vance and the world's wealthiest person Elon Musk – he has selected a team comprising other crypto enthusiasts, including Paul Atkins as nominee for head of the powerful Securities and Exchange Commission.

"The US is entering a new world: Mr Trump recently appointed a range of FinTech and crypto-fluent leaders" that would streamline his crypto agenda, Sam Blatteis, founder and chief executive of Dubai-based government relations firm The Mena Catalysts, told The National on the sidelines of Abu Dhabi Finance Week.

Mr Trump's Project 2025 Mandate for Leadership agenda highlights his position on digital assets.

"Both the SEC and the CFTC [Commodity Futures Trading Commission] have been irresponsible actors in the digital asset area. They have had more than a decade to promulgate rules governing digital assets, yet the SEC has utterly failed to do so, and the CFTC has provided only minimal guidance. Instead, both agencies have chosen regulation by enforcement – and have done it poorly," it stated.

In any case, no matter what happens in politics, be it in America or elsewhere, Bitcoin is expected to continue its success, despite the expected wild price swings and being able to solidify its standing and proving it is able to come back from downturns, going higher each time.

"If [Mr Trump] does a 180, it'll be very stupid, but Bitcoin carries on," Mr Karageorgevitch said.

Mr Bailey agreed: "Bitcoin will continue to be successful no matter what happens in the political world."