Is Trump Crashing the Economy… to Pump Crypto?
Why Trump’s trade war might not be about protecting American industries, but making him one of the richest people in the world...through crypto.
by Ben Cohen
As longtime Banter readers know, I have a passing interest in blockchain technology and crypto currencies.
Like it or not, blockchain isn’t going anywhere. Blockchains automate processes through self-executing contracts that are far faster and more efficient than traditional systems in finance and logistics, so companies are increasingly adopting blockchain technology to improve their businesses.
As companies adopt blockchains to build their businesses on, the native tokens of the chains like Bitcoin, Ethereum, and Solana rise in value. There is a lot of speculation over these “coins” creating huge volatility in the market. New chains emerge on an almost monthly basis with new coins that their creators claim will be the next Bitcoin. Most of these chains will never gain mass adoption, and most of their tokens will become worthless. But some chains and their tokens will take off and millionaires will be made. This makes the space extremely volatile and prone to extraordinary levels of corruption. Crypto is now so big that a single exchange collapse, like FTX, can wipe out billions and rattle global markets
Sam Bankman-Fried, once the golden boy of crypto, had a surprisingly large impact on the global economy—especially considering how young the crypto industry is. FTX’s collapse in November 2022 (along with sister trading firm Alameda Research) wiped out over $30 billion in value. Investors—both retail and institutional—lost billions, shaking faith in the entire crypto ecosystem. And that was just one company.
After following crypto closely for about eight years, I’d say 50% of the industry is a naked scam, 30% is genuinely interesting but unlikely to go anywhere, and the remaining 20% has the potential to radically change entire industries.
Another thing I’ve observed is that crypto follows highly predictable cycles that are linked to global liquidity cycles, namely the M2 money supply. The M2 money supply is a broad measure of the money supply that includes M1 (currency and checking accounts), savings deposits, CDs and retail money market mutual fund balances. When the M2 money supply goes up, the price of crypto follows as you can see here:
In layman terms this means that when liquidity is injected into the market, usually via interest rate cuts or government stimulation, people have more money to invest. When they have more money to invest, they look for higher risk assets for a greater return — namely crypto and tech stocks. When money tightens, people look for safer havens like bonds and traditional stocks.
So what does this have to do with Donald Trump and his increasingly extreme trade war with the rest of the world? If you’ve followed Trump’s career in business and politics over the years, one thing becomes abundantly clear: Trump is transactional to the core.
This means he views every interaction as an opportunity to make money.
While he might perform his duties as President, Trump once again sees the White House as an opportunity to expand his business empire. We saw this during his first term, when he routinely steered government and political spending toward his own properties. Foreign diplomats were encouraged to stay at the Trump International Hotel in D.C. His private clubs—Mar-a-Lago and Bedminster—hosted everything from official meetings to political fundraisers, with the proceeds going straight to Trump-owned businesses. According to a CREW (Citizens for Responsibility and Ethics in Washington) report, Trump and his campaign spent over $16 million at his own properties during his presidency.
Even the White House’s Easter Egg Roll was opened to corporate sponsorship complete with company logos splashed across children’s activities on the South Lawn.
So when Trump proposes massive tariffs or rails against the Fed, we should ask: who benefits? Because if history is any guide, Trump’s economic strategies aren’t just political, they are profit-seeking maneuvers dressed up in populist rhetoric.
In 2019 Donald Trump Tweeted this about Bitcoin:
By 2024, he’d done a complete 180, becoming the most pro-crypto politician in America. He launched his own NFTs and quietly aligned himself with a number of Silicon Valley crypto billionaires who bankrolled his 2024 campaign. Trump talked about a US crypto reserve and pledged to make America the most crypto friendly country in the world.
So what changed? Trump’s pivot isn’t ideological — it’s opportunistic. And if you connect the dots between his current economic rhetoric and the crypto market cycle, a clear pattern emerges.
Trump’s new wave of proposed tariffs—10% on all imports and up to 60% on Chinese goods— are set to increase inflationary pressure and slow global trade. Goldman Sachs estimates such tariffs could add up to 0.5 percentage points to core inflation. That kind of pressure could force the Federal Reserve to cut rates faster than expected, especially if growth stalls and unemployment ticks up.
Rate cuts and looser monetary policy have historically driven crypto markets higher. For example:
When the M2 money supply surged by over 25% in 2020–2021, Bitcoin rose from $7,000 to over $60,000.
Conversely, as the Fed tightened monetary policy in 2022 and M2 growth stalled, Bitcoin crashed by over 70%, and the broader crypto market lost more than $1 trillion in value.
In simple terms: when liquidity flows, crypto flies. And Trump knows it.
Trump isn’t really interested in crypto adoption and he almost certainly doesn’t understand the underlying technology. But he is interested in dramatically increasing his net worth. So if he can create the perfect conditions for a liquidity supercycle, it would allow Trump and his allies to ride the next crypto wave to obscene profits. His inner circle includes major investors with positions in Ethereum, Solana, and Avalanche. Trump has already entered the cryptocurrency market with the launch of his $Trump meme coin, which dramatically increased his net worth. Reported Axios back in January:
The $TRUMP memecoin — a financial asset that didn't exist on Friday afternoon — now accounts for about 89% of Donald Trump's net worth.
Why it matters: The coin (technically a token that's issued on the Solana blockchain) has massively enriched Trump personally, enabled a mechanism for the crypto industry to funnel cash to him, and created a volatile financial asset that allows anyone in the world to financially speculate on Trump's political fortunes….
At its peak, the token briefly made Trump one of the world’s 25 richest people—on paper. Trump isn’t just talking about crypto, he’s making very serious money from it.
Given the astonishing potential crypto has for Trump’s bank account, it makes sense to view his economic policies as a direct attempt to manipulate the market. By manufacturing economic pressure and shaking market confidence through tariffs, Trump sets the Fed up to cut rates, opens the floodgates of liquidity, and helps ignite a speculative frenzy in risk assets.
If it works, it could trigger one of the most aggressive wealth transfers in modern history, straight into the wallets of Trump’s campaign backers and the broader crypto elite.
It’s not a conspiracy theory, it’s a stimulus strategy disguised as economic populism.
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I literally don’t think he’s in charge at all. I think he’s just a mouthpiece.
I don’t want to sound like a conspiracy theorist, but, I have a bad feeling in my gut that he is going to make physical money completely redundant. The price of gold has been rising steadily and he has already invested government funds in crypto! I hope I’m wrong…😳