The cryptocurrency market experienced a sharp downturn following the latest developments from the U.S. government, despite a highly anticipated policy shift by President Donald Trump. On March 7, the White House hosted its first-ever cryptocurrency summit, signaling a new era of digital asset regulation and federal engagement with the blockchain industry.
At the summit, President Trump declared that the federal government would support the growth of Bitcoin and digital assets, effectively ending what he described as the "war on crypto" waged by previous administrations. This marked a dramatic reversal from his earlier stance, where he once labeled Bitcoin a "fraud." Now, Trump is championing the U.S. as a global leader in blockchain innovation and digital finance.
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Strategic Bitcoin Reserve Announced — But Markets React Negatively
On March 6, Trump signed an executive order establishing a strategic Bitcoin reserve, directing the U.S. government to halt the sale of its existing holdings—reportedly up to 200,000 BTC—and preserve them as national assets. However, the order did not include plans for active purchases of Bitcoin from the open market, which disappointed investors expecting more aggressive pro-crypto fiscal action.
As a result, Bitcoin prices dropped sharply, falling from around $94,000 to $81,600 within days. Though it briefly recovered to $92,800, the volatility continued, and BTC stabilized near $86,000 at press time. Over the past week, more than 130,000 traders were liquidated, with total contract liquidation losses exceeding $470 million in just 24 hours, according to Coinglass data.
Solana (SOL) declined over 4%, while XRP and Cardano (ADA) each dropped more than 6% during the same period.
Charles Edwards, founder of hedge fund Capriole Investments, called the reserve plan “the most disappointing outcome this week,” noting that without active buying, the strategy lacks real market impact. However, Matt Hougan, Chief Investment Officer at Bitwise Asset Management, viewed it positively: “Creating a national Bitcoin reserve reduces the risk of outright bans and could inspire other nations to follow suit.”
Trump’s transformation from crypto skeptic to advocate aligns with broader political trends. During his 2024 campaign, he received significant financial backing from crypto donors—over $130 million in political contributions funneled through super PACs to pro-crypto candidates in both parties, per The Wall Street Journal. His administration’s pro-digital asset agenda includes clearer regulations, institutional adoption incentives, and infrastructure development.
Even Trump’s own branded token—“Trump Coin”—launched before his return to office, briefly surpassing a $10 billion market cap before losing over 80% of its value by early March.
Coinbase Celebrates Regulatory Clarity With Major Hiring Push
In the wake of the summit, Brian Armstrong, CEO of Coinbase, hailed the event as “a historic day for crypto.” He credited Trump with revitalizing an industry he claims was “illegally attacked” under prior leadership and emphasized that regulatory certainty now enables long-term growth.
Armstrong announced that Coinbase will hire 1,000 employees in the U.S. in 2025, expanding its workforce significantly from 3,772 full-time staff at the end of 2024. The hiring surge reflects confidence in stable policy frameworks and growing institutional interest.
“We’re committed to building this industry in America,” Armstrong said. “Our goal isn’t zero volatility for Bitcoin—it’s sustained upward price momentum over time.”
He stressed bipartisan cooperation as essential for lasting innovation and urged lawmakers to craft balanced rules that protect consumers while fostering competition.
Financial Strength and Institutional Confidence
Rosenblatt Securities recently initiated coverage on Coinbase with a “Buy” rating and a $305 price target—well above its current trading level of $214. Analysts cited strong fundamentals: an impressive 85.7% gross margin and a healthy 2.28 current ratio, indicating solid liquidity and operational efficiency.
In its Q4 2024 earnings report (released mid-February), Coinbase posted:
- Revenue: $2.3 billion (+138% YoY)
- Net income: $1.291 billion (+372% YoY)
- EPS: $4.68 vs. expected $1.81
- Total trading volume: $439 billion (+185% YoY)
Retail trading volume surged 224%, while institutional activity rose 176%. The company attributed this growth to two key catalysts:
- The launch of spot Bitcoin ETFs in early 2024.
- The election of a pro-crypto president and Congress, raising expectations for clear regulations.
Despite this success, Coinbase remains heavily reliant on transaction fees—68.5% of revenue comes from trading, mostly retail-driven. The company is actively diversifying into staking, lending, and institutional services.
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Legal Victory and Tokenization Ambitions
A major turning point came on February 27 when the SEC dropped its 2023 lawsuit against Coinbase—a move widely seen as a sign of shifting regulatory tone under the new administration. Armstrong called it “a huge win for the entire industry,” clearing legal uncertainty around whether certain digital assets qualify as securities.
This victory paves the way for Coinbase’s renewed push to tokenize its stock (COIN)—a project first attempted in 2020 but shelved due to regulatory hurdles. With the SEC now forming a dedicated crypto task force, CFO Alesia Haas expressed optimism about integrating blockchain-based securities into traditional finance.
“We believe regulators are now open to product innovation,” Haas said at Morgan Stanley’s TMT conference. The plan involves issuing a security token representing shares of COIN, enabling 24/7 settlement and greater accessibility for global investors.
Brian Armstrong believes tokenized assets will revolutionize capital markets by reducing friction, increasing transparency, and enabling real-time ownership transfers.
Gemini Quietly Files for IPO
Meanwhile, another major player is preparing for public markets. Gemini, the cryptocurrency exchange co-founded by Cameron and Tyler Winklevoss, has reportedly filed confidentially for an IPO with the SEC. The company is working with Goldman Sachs and Citigroup on the process and aims to go public as early as 2025.
Gemini joins a growing list of crypto firms seeking public listings amid improved sentiment—including Kraken and possibly even Binance in international markets.
Frequently Asked Questions (FAQ)
Q: Why did Bitcoin drop after Trump’s crypto announcement?
A: While Trump established a strategic Bitcoin reserve, he did not authorize new purchases from the market. Investors had hoped for active accumulation like gold reserves, so the lack of buying pressure led to disappointment and sell-offs.
Q: Is the U.S. government buying Bitcoin now?
A: No. The executive order only stops the government from selling its existing stash—estimated at up to 200,000 BTC—but does not mandate new acquisitions.
Q: What impact does Coinbase’s hiring plan have on the crypto market?
A: It signals strong confidence in regulatory stability and long-term growth. Adding 1,000 jobs shows commitment to U.S.-based innovation and may encourage other firms to expand domestically.
Q: Can tokenized stocks like COIN become mainstream?
A: Yes—if regulators approve. Tokenization offers faster settlements, lower costs, and全天候 trading. With supportive policies emerging, such innovations could redefine traditional finance.
Q: How are political donations influencing crypto policy?
A: The crypto industry contributed over $130 million to political campaigns in 2024 via super PACs. This financial support helped elect pro-crypto lawmakers who are now shaping favorable regulations.
Q: What caused recent massive liquidations in crypto markets?
A: High leverage combined with sudden price swings—from $94K to $81K in days—triggered margin calls across exchanges. Over $470 million in positions were wiped out in 24 hours.
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Conclusion
The U.S. crypto landscape is undergoing a structural transformation driven by policy shifts, corporate expansion, and technological innovation. While short-term volatility remains high—as seen in recent price swings and mass liquidations—the long-term trajectory appears bullish due to increasing regulatory clarity and institutional adoption.
With Coinbase expanding aggressively, Gemini eyeing an IPO, and federal policy turning supportive, Bitcoin, blockchain infrastructure, and digital asset regulation are emerging as core themes for 2025 and beyond.
As Armstrong put it: “We’re entering the golden age of crypto.”