The global cryptocurrency market is once again experiencing seismic activity. Two key factors are playing a significant role here: Donald Trump’s return to the White House and the anticipation of the outcomes from the strict regulation of the industry in the EU.
Even before officially taking office as U.S. President, Trump’s cryptocurrency-related statements helped Bitcoin reach record-breaking values. The inauguration of the current White House leader coincided with the launch of his own cryptocurrency. His early days in office were marked by an executive order establishing a working group on digital asset markets and banning the development of a central bank digital currency (CBDC).
Meanwhile, the EU is observing the global impact of the comprehensive regulatory framework for cryptocurrency markets (MiCA), implemented at the end of last year.
The stark contrast between Trump’s crypto-friendly stance and the EU’s strict regulatory framework is forcing investors, companies, and regulatory authorities worldwide to reevaluate their positions in the rapidly evolving digital asset space.
Major cryptocurrency exchanges have already announced plans to shift their focus to the U.S. market. Meanwhile, the EU faces the uncomfortable prospect that its well-thought-out rules could undermine the continent’s competitiveness in this innovative sector.
“As the situation unfolds, the global cryptocurrency market has reached a crossroads,” says Vladimir Kokorin, a Spanish investor, founder of the British consulting firm BCCM Group, and co-founder of the Tumodo digital platform for business travel. “The key question now is not whether the digital asset market will be regulated, but which approach to regulation will prevail: the more conservative European approach or the liberal American approach promoted by the Trump administration.”
Trump’s Open Crypto Policy
The day before Gary Gensler, the crypto market’s well-known adversary and Chair of the U.S. Securities and Exchange Commission (SEC), stepped down, Trump announced the launch of his own memecoin, $TRUMP. This cryptocurrency briefly became the 19th most valuable digital currency in the world.
“Despite some critical remarks, it’s worth noting that the U.S. President is not only expressing support for cryptocurrencies but also promoting his strategy for the development of digital finance,” Vladimir Kokorin notes.
On January 24, Trump signed a landmark executive order encouraging the development of cryptocurrencies and the creation of a national digital asset reserve. The document also established a working group on digital asset markets, headed by David Sacks, who is expected to become the Trump administration’s chief expert on AI and cryptocurrencies.
“Trump’s pivot toward a more open cryptocurrency policy marks a new era for digital assets,” emphasizes investor Vladimir Kokorin. “We’re witnessing growing interest from traditional financial institutions, which previously took a wait-and-see approach. Memecoins like $TRUMP and $MELANIA, despite their controversial nature, are helping to bring digital assets into the mainstream.”
The EU’s Strict Oversight
On December 30 of last year, the second phase of MiCA came into force in the EU. It imposes strict requirements on crypto companies, mandating licenses for service providers, mandatory detailed disclosures, and rigorous standards for stablecoin issuers.
“The effects are already evident,” notes investor Vladimir Kokorin. “Several European exchanges have delisted USDT Tether, triggering a ripple effect across the market, forcing traders to seek alternatives, and potentially draining liquidity from European platforms.”
Challenges with implementation are mounting. Various EU member states have set different transition periods for existing crypto companies to comply with MiCA, creating a fragmented regulatory landscape.
Despite criticism, analysts at Binance argue that MiCA could become a global benchmark for other jurisdictions, emphasizing that a clear regulatory framework will inevitably lead to greater investor trust and further adoption of cryptocurrencies.
Vladimir Kokorin takes a balanced view: “MiCA, despite its rigidity, establishes clear rules of the game that could benefit the industry in the long term. The main challenge now is to find a balance between investor protection and maintaining the competitiveness of Europe’s crypto market.”
Market Transformation
The differences in regulatory approaches between the U.S. and the EU are accelerating a broader transformation of global cryptocurrency markets. Institutional investors, previously hesitant to enter this space, are reassessing their positions in light of Trump’s pro-crypto stance.
Venture capital flows reflect this shift: while funding for crypto startups in Europe is heading toward a four-year low in 2024, North American investments are actively recovering.
The prospect of a more favorable regulatory environment in the U.S. is prompting banks and investment firms to develop services for digital assets, potentially speeding up their mass adoption.
The emerging regulatory dichotomy between the U.S. and the EU could reshape the global cryptocurrency landscape for years to come. While the EU’s MiCA system prioritizes consumer protection and market stability, Trump’s U.S. appears ready to embrace a more innovation-friendly approach that could attract talent, capital, and technological advancement.
“We’re witnessing a historic redistribution of capital and talent within the crypto industry,” emphasizes Vladimir Kokorin. “Companies that can effectively operate under both regulatory regimes—European and American—will gain a significant competitive advantage.”
Global Regulator Competition
“We mustn’t forget that global competition in crypto-asset regulation extends far beyond the ‘clash’ between the U.S. and the EU. This creates unique opportunities for jurisdictions capable of offering a reasonable balance between innovation and safety,” continues Spanish venture investor Vladimir Kokorin. “Countries like Singapore are demonstrating how to create an attractive environment for crypto businesses without excessive risks.”
It is evident that the industry is at a turning point, raising numerous questions. Will the EU’s protective system prove visionary in preventing future cryptocurrency crises, or will it stifle innovation and drive activity underground? Conversely, could the U.S.’s freer stance lead to another cycle of ‘boom and bust,’ or will it act as a catalyst for genuine technological progress?
“The crypto industry is entering a new era of regulator competition,” concludes Vladimir Kokorin. “Market participants worldwide must navigate an increasingly complex landscape of opportunities and restrictions. Success will depend not so much on the strictness or leniency of regulation but on the ability to adapt to different regulatory regimes and create sustainable business models.”