Bitcoin, no longer a game for bored nerds. It's the Trumponomics, stupid

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The first Trump effect on the economy has already manifested, even though the official inauguration of the old-new president is scheduled for January. The total capitalization of cryptocurrencies rose from $2.26 trillion (thousands of billions) the day before the election to $3.7 trillion on December 9. To provide a comparison, the capitalization of the Milan Stock Exchange in 2023 was about €0.75 trillion, while the total capitalization of Euronext stood at €6.6 trillion. Cryptocurrencies can no longer be ignored; Bitcoin, the most famous among them, is no longer just a game for bored rich nerds.

The reason for this sudden growth is simple. Shortly before the elections, the Trump family directly invested in a cryptocurrency trading platform. Consequently, it is expected that the administration's decisions will favor these new financial instruments, and the initial moves confirm this. Trump announced plans to appoint Paul Atkins, an outspoken cryptocurrency supporter, as head of the SEC (the American equivalent of Consob), and David Sacks, an active investor in the sector and former CEO of PayPal, as "Crypto Czar." This context has prompted both large and small investors to quickly enter the market, convinced of the potential for substantial profits. While awaiting concrete policy developments, this rapid growth already demonstrates three key consequences of Trumponomics. First, the intertwining of public roles and private interests blatantly influences collective decision-making. This commingling was already evident during the electoral campaign when Trump, in addition to seeking votes, aired ads encouraging people to buy a sort of digital trading card of himself. While it is natural for a president to support the economic interests of the part of society that backed him, this personal identification represents an unprecedented level in any democracy.

If the first consequence primarily concerns the United States, the other two directly affect us. Cryptocurrencies, unlike traditional financial organizations stemming from central banks, operate in a completely decentralized system. There are a series of entry points to buy and sell these cryptocurrencies, and initially, traditional money is required to make purchases. Thus, within this closed system, hundreds of billions in traditional currency also circulate, but each cryptocurrency remains independent. The growth of a decentralized system strengthens it and makes it inherently irreversible—unlike centralized systems, which are challenging to stabilize as they expand significantly. This leads to the second consequence: we will hear more and more about cryptocurrencies, and many will use them. As the ecosystem continues to grow, it is no longer a game but a much more sophisticated financial system that is emerging as a parallel, horizontal financial network, only marginally intersecting with the traditional financial system and much less regulated.

Indeed, it can essentially perform the same functions: exchange, lending, store of value, and speculation. There is already a network of ATMs in Italian shopping centers where cryptocurrencies can be exchanged. This system will increasingly compete with the traditional financial system, intensifying economic fragmentation and reducing state sovereignty. The third consequence is that the centrality of the dollar and the American economy is further reinforced. Thus, state sovereignties are diminished—except for one. The vast majority of these innovations are based in the United States, and the value of cryptocurrencies is expressed in dollars. This process ultimately consolidates the role of the dollar and U.S.-made innovations. On this front as well, Europe, unfortunately, remains an absent spectator.