President Trump’s 2019 Crypto Criticism

“On July 15, 2019, Bitcoin plummeted 10% to $10,175, briefly dipping below $10,000, following scathing remarks from U.S. President Donald Trump, who declared he was “not a fan” of cryptocurrencies. Reported by CNBC, Trump’s comments, which labeled Bitcoin and other digital assets as “not money” and facilitators of illegal activity, also targeted Facebook’s Libra project, sparking a broader market sell-off. Ethereum dropped nearly 17% to $221, and XRP fell 5% to 31 cents, intensifying volatility in a market already grappling with regulatory scrutiny.

The Criticism: Trump’s Attack on Crypto

On July 11, 2019, President Trump posted a series of tweets dismissing cryptocurrencies, stating, “I am not a fan of Bitcoin and other Cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air.” He warned that “unregulated Crypto Assets can facilitate unlawful behavior, including drug trade and other illegal activity.” Trump also criticized Facebook’s proposed Libra cryptocurrency, arguing it would require a banking license to operate as a financial institution. The remarks, coming from the leader of the world’s largest economy, sent shockwaves through the crypto market, amplifying fears of U.S. regulatory crackdowns.

The timing was significant. Bitcoin had surged over 160% in 2019, driven by institutional interest and news of major firms like Facebook entering the crypto space. Trump’s comments, however, cast a shadow over this optimism, aligning with ongoing concerns about regulatory hurdles, such as the SEC’s rejection of Bitcoin ETFs and the NYAG’s Bitfinex-Tether probe. While some industry leaders, like Coinbase CEO Brian Armstrong and Fundstrat’s Tom Lee, framed the attention as a positive spotlight on crypto, the immediate market reaction was overwhelmingly negative.

Market Impact: Bitcoin and Ethereum Plunge

Bitcoin’s 10% drop to $10,175 on July 15, with a low of $9,872, marked a sharp reversal from its 2019 peak of nearly $14,000 in June, per CoinDesk data. Ethereum, the second-largest cryptocurrency, fell nearly 17% to $221, reflecting its higher volatility and sensitivity to market sentiment. XRP, the third-largest, declined 5% to around 31 cents. The total crypto market capitalization, hovering around $280 billion, took a hit as investors panicked over the potential for stricter U.S. regulations.

The sell-off was driven by Trump’s influence as a global figurehead and the fear that his comments could spur legislative action against crypto. The mention of Libra, a high-profile project backed by Facebook, raised concerns about broader regulatory backlash affecting all cryptocurrencies. Despite Bitcoin’s year-to-date gains of over 160%, the sharp decline underscored the market’s vulnerability to high-profile criticism, especially in a year marked by regulatory setbacks like the Bitfinex-Tether $850 million fraud allegations.

Why It Mattered: Political Influence and Regulatory Fears

Trump’s 2019 crypto criticism was a pivotal moment for several reasons. First, it demonstrated the power of political rhetoric to move markets. As the U.S. president, Trump’s words carried weight, amplifying existing fears of regulatory clampdowns in a market still recovering from the 2018 bear market. His focus on illicit activities echoed concerns raised by regulators globally, from South Korea’s exchange bans to the SEC’s ETF rejections, reinforcing crypto’s reputation as a risky asset.

Second, the remarks highlighted the regulatory uncertainty surrounding crypto. Trump’s call for Libra to seek a banking license signaled that major crypto projects could face traditional financial oversight, a prospect that spooked investors. This uncertainty deterred institutional adoption, as firms hesitated to enter a market facing potential bans or heavy regulation.

Third, the event exposed crypto’s retail-driven volatility. While industry leaders like Armstrong saw Trump’s attention as a sign of crypto’s mainstream relevance, the sharp price drops showed that retail investors, dominant in 2019, were quick to sell on negative news. Ethereum’s steeper decline, tied to its role in DeFi and ICOs, underscored its exposure to sentiment shifts.

Long-Term Implications: A Bump on Crypto’s Road to Legitimacy

Trump’s comments, while impactful in the short term, didn’t derail crypto’s long-term growth. Bitcoin rebounded to $13,000 by October 2019 and soared to $69,000 by 2021, driven by institutional adoption and ETF approvals. Ethereum recovered to over $4,000 in 2021, fueled by DeFi and NFT booms. The Libra project, rebranded as Diem, was abandoned in 2022 amid regulatory pressure, but other stablecoins like Tether thrived, with improved transparency post-NYAG settlement.

The event spurred the crypto industry to engage more proactively with regulators. Exchanges like Coinbase lobbied for clearer U.S. policies, contributing to the eventual approval of Bitcoin spot ETFs in 2024. Globally, Trump’s remarks prompted regulators to clarify crypto’s legal status, with countries like Canada and Singapore advancing frameworks that balanced innovation and oversight. The incident also highlighted the need for investor education, as retail panic amplified the crash.

Conclusion: A Presidential Jab That Shook Crypto Markets

President Trump’s 2019 criticism of cryptocurrencies, branding them as “not money” and tools for crime, triggered a 10% Bitcoin crash and a 17% Ethereum plunge, exposing the market’s sensitivity to political rhetoric. While the immediate sell-off faded, the event underscored the challenges of regulatory uncertainty and retail-driven volatility in crypto’s early years. For investors and enthusiasts, Trump’s remarks remain a notable chapter in crypto’s volatile journey, highlighting the growing pains of an asset class striving for mainstream legitimacy.”