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Donald Trump’s honeymoon with the cryptocurrency industry may be over. At the very least, the campaign contributions in Dogecoin he received last month are probably a lot less valuable right now than they were three weeks ago.
That’s because crypto prices—like a lot of stocks—aren’t doing well at the moment. Why is the market so borked? As with any economic freakout, there are Coindesk reports that the price of Bitcoin plummeted 15 percent over the course of a day, while Ether similarly fell 21 percent during one 24-hour period. Prominent exchange Coinbase sank 17 percent. Numerous other crypto-related businesses have all seen similarly apocalyptic slides.
Indeed, the crypto market is undergoing what observers have been calling a “perfect storm.” One particular event that some have attributed to the industry’s recent panic is a series of uniquely large asset transfers by the trading firm Jump Trading. The Block, citing blockchain data, writes that the firm “appears to be liquidating hundreds of millions of dollars worth of crypto.” Jump Trading has “unstaked” $315 million worth of Ether during this period and sent it to exchanges, giving the impression that it plans to sell off much of its inventory. This apparent cash-out seems to have spooked other investors in the crypto market, encouraging them to similarly jump ship. The sell-offs may also be spurred by the same recessionary fears endemic to the rest of the market—with crypto traders trying to avoid losing money as the market turns sour.
In short: This is a really bad time to get into crypto…which is what makes it so funny that former President Donald Trump chose to announce his newfound embrace of the industry just last week.
Yes, Trump appeared at a Bitcoin conference in Nashville, Tennessee last weekend, in an effort to gin up political support in the tech industry. The candidate announced his support for digital assets while garnering endorsements from some of the industry’s heavy hitters. His campaign website has also made crypto contributions possible via a unique portal that includes integrations with Coinbase and Gemini. It looked like the beginning of a beautiful friendship, but now the industry is on fire. Like a rookie trader, Trump appears to have gotten into the market at the exact wrong time. Nice job, sir.
Still, if Trump’s moderate amount of shitcoin contributions may be suffering, the rocky stock market has also afforded him a powerful political weapon. Trump’s allies have been quick to weaponize the economic downturn, using it to tar the Biden-Harris administration. #KamalaKrash trended on X/Twitter on Monday, as rightwingers blamed the market’s troubles on the current administration. “STOCK MARKETS ARE CRASHING, JOBS NUMBERS ARE TERRIBLE, WE ARE HEADING TO WORLD WAR lll,” Trump posted on Truth Social after getting the ball rolling on the “TRUMP CASH vs. KAMALA CRASH!” branding.
Kamalanomics same as Bidenomics #KamalaCrash #stockmarketcrash pic.twitter.com/NIv3YpDhdv
— Politi_Rican 🇵🇷 𝕏 🇺🇸 (@TheRicanMemes) August 5, 2024
Many economists believe it is the Federal Reserve, not the White House, that has slowed job growth and kicked off a panic in the market. Critics claim that Fed chair Jerome Powell’s refusal to cut interest rates has increasingly endangered the economy. It should be noted that it was Trump who nominated Powell to his current role, not Biden. Powell has also ignored advice from progressive Democrats (and Biden) who have urged him to cut rates, warning that his policies could spur a recession. Conversely, Trump has spent the last few weeks urging Powell not to cut rates before the presidential election, thus advocating for the very force that experts blame for the economy’s sluggish state.
That said, the U.S. economy is still relatively strong, despite lingering inflation and fears of a downturn. Over 15 million new jobs have been added under the Biden administration, and unemployment hit a 53-year low last January.
