Bitcoin News Update: With Trump's Crypto Faltering, Investors Turn to Stablecoins for Security

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Bitcoin News Update: With Trump's Crypto Faltering, Investors Turn to Stablecoins for Security

Bitget-RWA2025/11/24 09:24

By:Bitget-RWA

- Trump's crypto investments lost $1B as ABTC and TMTG collapsed, prompting a shift to stablecoins exceeding $300B market cap. - Trump Media's $250M Bitcoin investment initially boosted shares but was overshadowed by broader crypto market declines. - SEC probes and central bank warnings highlight risks in politically connected crypto projects and stablecoin redemption vulnerabilities. - Despite losses, Trump family members remain bullish on Bitcoin, while DOGE meme coin surged post-program termination. - M

Donald Trump's entry into the cryptocurrency sector has resulted in a $1 billion reduction in his and his family's wealth, prompting a surge in stablecoin investments as market participants move away from high-risk assets. The Trump-themed

memecoin

American Bitcoin

Corp. (ABTC), and

Trump Media

& Technology Group (TMTG) have all experienced significant declines, with the family's crypto-related net worth falling from $7.7 billion to $6.7 billion

as reported by the Bloomberg Billionaires Index

. This downturn has accelerated a widespread move toward stablecoins, which now boast a market cap surpassing $300 billion

as investors look for safety from speculative cryptocurrencies

In January, Trump Media, which operates Truth Social, revealed the launch of Truth.Fi,

a financial technology platform providing crypto services and tailored ETFs

, marking a bold step into digital finance. The firm invested $250 million with Charles Schwab to buy

Bitcoin

and other digital currencies, a decision that initially sent

DJT

shares up by 10%. Yet, the broader slump in crypto markets has since overshadowed these gains,

with Trump's memecoin dropping 25% in value since August

and ABTC losing half of its worth.

Bitcoin News Update: With Trump's Crypto Faltering, Investors Turn to Stablecoins for Security image 0

Regulatory concerns have added further uncertainty. Alt5 Sigma, a partner in Trump's World Liberty Financial project,

is under SEC investigation for inconsistencies in its disclosure

regarding a CEO suspension, raising doubts about regulatory compliance in politically linked crypto ventures. At the same time, central banks have issued warnings that mass stablecoin withdrawals could pose systemic threats similar to the 2008 financial meltdown,

with the Dutch National Bank warning that a "fire sale" of U.S. Treasuries

could occur if confidence collapses.

The shift toward stablecoins has become increasingly evident. Bluwhale, a DeFi company,

has launched an AI-powered Stablecoin Agent

to enable investors to automate their allocations among dollar-backed tokens, highlighting the rising appetite for stable assets. Both retail and institutional investors have gravitated toward stablecoins such as

USDT

and

USDC

with trading statistics indicating a clear move away from speculative coins

. The highly publicized losses suffered by Trump have further reinforced caution among new entrants to the crypto space.

Despite the ongoing challenges, the Trump family remains optimistic. Eric Trump, whose American Bitcoin controls 4,004 BTC valued at $350 million, recently encouraged investors to "buy the dip" and reaffirmed his prediction that Bitcoin could reach $1 million,

though he noted it might take "several years"

. In a separate development, the now-defunct Department of Government Efficiency (DOGE),

a Trump-Musk collaboration designed to cut federal expenditures

, has seen its related

meme

coin rise in value despite the initiative's early end.

The unpredictable nature of the crypto market highlights the dangers of investments driven by celebrity influence. As regulators and central banks intensify their focus on stablecoin operations, the industry's future will depend on finding a balance between innovation and systemic protection. For now, the Trump crypto

saga

stands as a vivid example of the sector's inherent unpredictability.

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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