"The Trump Effect" strikes again: DeFi, AI, and altcoins welcome policy dividends?

Written by: Biteye Core Contributor viee

Edited by: Biteye Core Contributor viee

Yesterday (January 23, 2025), Trump signed a highly anticipated executive order at the White House, officially announcing that the U.S. will increase policy support in the fields of artificial intelligence (AI) and digital cryptocurrencies. This not only indicates Trump's intention to push the U.S. to take a leading position in the global AI race but also sends a positive signal for the cryptocurrency sector.

Compared to the regulatory approach of the Biden administration, Trump's policies are bold and sweeping, potentially allowing projects that have been overshadowed by regulatory concerns to welcome a long-awaited spring. From DeFi to AI, and to MEME coins, will these sectors experience a new wave of growth driven by the "Trump effect"? Can he, like last time when he led the "$Trump coin craze," catch the market off guard?

In this article, Biteye outlines several key sectors and related tokens that may benefit from this situation.

1. DeFi: Accelerating Compliance and Mainstream Adoption

The DeFi project World Liberty Financial (@worldlibertyfi) launched by the Trump family undoubtedly injects a strong dose of confidence into the DeFi sector. The WLFI project is not a hasty endeavor but operates within a regulatory framework after thorough legal compliance preparations, especially in terms of compliance planning. This means that, in addition to showing a strong optimism for DeFi, WLFI may convey hints of a more lenient regulatory environment for the crypto industry under Trump's administration.

Moreover, according to the new DeFi tax regulations proposed by the IRS in December 2024, it can be inferred that more systematic DeFi regulatory laws may be introduced in 2025, making compliance in the DeFi industry a potential trend for crypto development in 2025. The establishment of a compliance framework to promote the development of the DeFi industry, coupled with Trump's lenient regulation of the crypto sector, may encourage more traditional financial institutions to venture into DeFi. Currently, $LINK and $AVAX are the two highest market cap tokens in the DeFi sector and are also held by WLFI, which may encounter new opportunities in this wave of policy adjustments.

2. AI: Trump Vows to Make America the World Capital of Artificial Intelligence

In his inaugural speech, Trump mentioned that he would increase investment and development in the field of artificial intelligence (AI), particularly in decentralized AI infrastructure. On Tuesday, the White House announced that it would collaborate with tech giants such as Oracle, OpenAI, and SoftBank to launch a $500 billion AI infrastructure project. On Thursday, Trump signed an executive order related to the crypto industry and AI, setting a 180-day deadline to formulate an "Artificial Intelligence Action Plan" and a federal regulatory framework for managing digital assets (including stablecoins), as well as assessing the creation of strategic national digital asset reserves. The executive order also prohibited central bank digital currencies (CBDCs), as Trump believes this would "threaten the stability of the financial system, personal privacy, and U.S. sovereignty."

Against this backdrop, the potential for the combination of AI and crypto is particularly noteworthy, especially in the DeFi x AI (DeFAI) field, where decentralized AI applications and algorithmic trading may receive more boosts.

3. RWA & DePIN: Tokenization of Real-World Assets

The Trump family's World Liberty Financial (@worldlibertyfi) is not only involved in the DeFi sector but also has laid out plans for RWA (real-world assets) related tokens, such as $ENA and $ONDO. Robinhood CEO Vlad Tenev and well-known cryptocurrency trader Andrew Kang have both expressed optimism that Trump’s administration will accelerate the transfer of stocks, private companies, and real-world assets (RWA) onto the blockchain through tokenization. The recently launched RWAFi concept project Plume Network was also publicly invited to Trump's inaugural ball.

In addition to RWA, last month Trump spoke at the Blockchain Association's annual gala, stating that real use cases like DePIN are legitimizing cryptocurrencies and are on the legislative priority list.

This information inevitably raises questions about the impact of Trump's administration on the RWA and DePIN sectors. In a more lenient policy environment, these sectors may welcome a golden development period.

4. Meme Coins and the SOL Ecosystem: Reassessing the Potential of "Altcoin Season"

The $TRUMP Meme coin launched by Trump created a market cap of $24 billion on its first day, bringing a new wave of attention to the Meme coin sector, with Web2 speculators rushing in overnight. The popularity of $TRUMP is a rare combination of politics and finance in crypto history, and "presidential coin issuance" undoubtedly has far-reaching market implications.

Additionally, the decision to deploy the $TRUMP token on the Solana chain further strengthens the market recognition of the Solana ecosystem and may become a catalyst for Solana's future development, potentially having the following impacts:

• Increased capital inflow into the Solana ecosystem: Due to the high market cap of $TRUMP and the influence of the Trump family, Meme coin projects on the Solana chain have attracted significant capital and market attention. This capital inflow may not be limited to the Meme coin itself but could also encourage more developers and project teams to choose Solana as their issuance and operating platform.

• Potentially facilitate the approval of Solana ETFs: As a representative of high-performance blockchains, Solana has a foundation for market acceptance. Trump's involvement not only increases Solana's market exposure but also helps its recognition in traditional financial markets, thereby accelerating the approval process for Solana ETFs.

• May lay the groundwork for "Altcoin Season": Meme coins driven by celebrity and political power may trigger the emergence of more similar projects, absorbing most of the on-chain liquidity and potentially driving the next round of "Altcoin Season."

5. World Liberty Holdings & U.S. Native Coins: Strongest Connection to Trump

These two sectors have a relatively strong connection to Trump and do not require further elaboration. Currently, the top ten tokens held by World Liberty are: $ETH, $wBTC, $STETH, $USDC, $TRX, $USDT, $AAVE, $LINK, $ENA, $ONDO. Additionally, projects sponsoring Trump's inaugural ceremony and crypto gala include TRON, Ripple, Anchorage, Kraken, Sui, MetaMask, Galaxy, Ondo (ONDO), Solana, Etoro, Uniswap, and publicly listed crypto companies such as Coinbase, MicroStrategy, Marathon Digital, Nano Labs, Exodus, and Metaplanet.

6. Conclusion

From DeFi to AI, from RWA tokenization to Meme coins, as the "Crypto President," every move Trump makes challenges the traditional industry landscape. His crypto policies may drive the industry toward a more compliant and mature direction in the coming years.

However, the true future of the crypto industry relies not only on short-term policy dividends but also on continuous innovation in its underlying technology and ongoing compliance efforts. Will Solana seize this opportunity to break through its bottleneck? Can sectors like DeFi and RWA rejuvenate within a compliant framework? At the intersection of policy relaxation and technological innovation, how will crypto assets dance with the traditional financial system? We can foresee that the coming years will be a critical period for all these transformations.