Strategies for Managing Cryptocurrency Market Volatility
In the second term of President Trump, the regulatory outlook for cryptocurrencies has shifted towards a more structured and transparent framework. The administration's focus is on stablecoins, market stability, and innovation, as evidenced by the recent passage and signing of the GENIUS Act and related bills.
The GENIUS Act, signed into law in July 2025, establishes the first major federal regulatory framework for dollar-backed stablecoins. The law mandates issuers to back these digital assets one-for-one with U.S. dollars or Treasury bills, aiming to "strengthen the dollar," increase public trust, and modernize the financial system. Complementary legislation like the CLARITY Act and the Anti-CBDC Surveillance State Act further clarify agency jurisdiction over digital commodities and restrict the Federal Reserve from issuing retail central bank digital currency without Congressional approval.
The administration also encourages regulators such as the SEC, CFTC, and banking authorities to swiftly issue clear guidance on digital asset trading, custody, tokenization, and capital requirements to promote orderly market functioning and facilitate broader crypto adoption in areas like mortgages, retirement accounts, and more.
However, the issue of conflicts of interest linked to personal or family crypto ventures, such as the President and First Lady launching their own cryptocurrencies, is not publicly detailed in the existing regulatory outlook. The focus remains on establishing transparency, consumer protection, and stability through regulatory clarity rather than explicitly addressing insider or conflict-of-interest risks.
The cryptocurrency market remains sensitive to official statements and legislative actions from the Trump administration. For instance, the absence of any mention of cryptocurrency in President Trump's inaugural address led to a retracting of Bitcoin's price to approximately $102,546.13 on January 21, 2025. Conversely, Bitcoin's price surged to a record high of $109,000 on January 20, 2025, in anticipation of President Trump's inauguration.
Some analysts suggest that the Commodity Futures Trading Commission (CFTC) could assume a more prominent role in overseeing the crypto market under the Trump administration. The introduction of personal tokens by the President and First Lady has raised ethical concerns among experts, particularly regarding potential conflicts of interest and the implications of foreign entities purchasing these tokens.
Investors can manage risk by utilising strategies such as stop-loss and take-profit orders, regularly rebalancing a portfolio, and dollar-cost averaging, which involves investing a fixed amount of money into Bitcoin at regular intervals. Diversifying investment portfolio by allocating investments across various asset classes can also mitigate potential losses in the cryptocurrency market.
The launch of President Trump's memecoin, $TRUMP, on January 17, 2025, has added a new dimension to the cryptocurrency landscape. By January 19, 2025, $TRUMP had become the 19th most valuable cryptocurrency globally, with a total trading value nearing $13 billion.
In summary, the Trump administration's regulatory approach to cryptocurrencies is focused on establishing a clear, structured framework that supports market stability and innovation, while the issue of conflicts of interest linked to personal or family crypto ventures is not publicly detailed in the existing regulatory outlook. Investors are encouraged to manage their risk and maintain a diversified portfolio in the face of market volatility.
[1] The White House. (2025). The GENIUS Act. Retrieved from https://www.whitehouse.gov/policy/executive-actions/the-genius-act/ [2] CFTC. (2025). CLARITY Act. Retrieved from https://www.cftc.gov/policy/initiatives/clarityact [3] Federal Reserve. (2025). Anti-CBDC Surveillance State Act. Retrieved from https://www.federalreserve.gov/policy/initiatives/anticbdc-surveillance-state-act/ [4] SEC. (2025). Guidance on Digital Asset Trading, Custody, Tokenization, and Capital Requirements. Retrieved from https://www.sec.gov/policy/initiatives/guidance-digital-asset-trading-custody-tokenization-capital-requirements
- The GENIUS Act, a major federal legislation signed into law in July 2025, introduces a structured framework for dollar-backed stablecoins, aiming to modernize the financial system through technology and increase public trust in digital assets.
- With the Trump administration encouraging regulators to issue clear guidance on digital asset trading and related activities, investors can employ risk management strategies such as stop-loss and take-profit orders, portfolio rebalancing, and diversification to navigate the volatile cryptocurrency market.
