Is Mr. Wonderful Right? Has the Crypto Cowboy Era Really Come to an End?
As President Donald Trump positions himself in the realm of cryptocurrency, opinions among investors and industry experts are split on whether his administration signifies a pivotal moment for digital assets.
Kevin O’Leary, chairman of O’Leary Ventures and a longtime proponent of cryptocurrency, has recently praised Trump’s approach to digital assets, claiming that this administration is initiating a “new phase” for the sector.
During an appearance on “My View with Lara Trump,” O’Leary declared that the so-called “cowboy era of crypto”—characterized by notable fraud incidents and regulatory ambiguity—has come to an end.
It is worth noting that O’Leary was significantly impacted by what could be considered the largest crypto fraud case in history—FTX. As both an investor and spokesperson for the exchange, he suffered financial losses when Sam Bankman-Fried’s company declared bankruptcy in late 2022.
“All the crypto cowboys are either in jail or out of business. Now we’re entering a new phase. There’s a fresh tone coming from the government, and Trump has led the way,” O’Leary stated.
However, issues like rug pulls and devastating hacks continue to plague the space.
At the same time, crypto “whales” and influencers are profiting immensely by promoting coins with false “insider knowledge,” driving up prices before cashing out, leaving everyday investors with significant losses. The landscape resembles the Wild West, with scammers thriving.
O’Leary’s optimism coincides with Trump’s series of new crypto initiatives.
Following his address at the Bitcoin 2024 Conference in Nashville, the then-GOP nominee launched World Liberty Financial. Just days before his inauguration, he introduced the Official Trump (TRUMP) meme coin. Moreover, the numerous SEC investigations into cryptocurrency firms like Binance and Coinbase appear to be fading away.
Earlier this month, Trump signed an executive order to create a Strategic Bitcoin Reserve, a move which recognizes specific digital assets like XRP, SOL, and ADA as part of a government-backed strategic reserve, hailed by Trump and his supporters as a significant step toward integrating cryptocurrency with traditional finance.
While O’Leary views these developments as evidence of a regulatory turning point, not everyone in the crypto community shares his confidence.
‘This ain’t it’
Critics suggest that Trump’s new endorsement of digital assets undermines the industry’s integrity and sets the stage for crony capitalism.
“Crypto is currently at a critical juncture,” cautioned Zack Guzmán, a crypto journalist and founder of the Web3 media firm Trustless Media, on January 18. “I understand the allure of quick profits, the excitement of thinking short-term, and the appeal for Trump—a man who has profited through various means. But this is not the way forward.”
According to Guzmán, only crypto companies with political backing will succeed under government protection.
On the day Trump announced the memecoin, which skyrocketed 10,000% in value, crypto elites donned tuxedos and gowns to mingle at a gala in Washington, D.C., oblivious to the impending digital disaster that Official Trump would become (currently down over 84% from its peak).
“I’m not claiming that Trump simply exploited everyone in crypto by hosting a black-tie affair in D.C. while unveiling a memecoin sans their involvement, but that’s exactly what occurred,” Guzmán remarked on January 18. “This industry now belongs to him, whether they realize it or not. Frankly, it’s quite disheartening.”
‘Stupid and embarrassing’
Following the launch of Official Trump, Balaji Srinivasan, a cryptocurrency investor, referred to meme coins as a “zero-sum game.”
“There is no value creation,” he tweeted the day before Trump’s inauguration. “Each buy order is countered by a sell order. After an initial surge, prices inevitably plummet, leaving the last investors with nothing.”
Crypto entrepreneur Erik Voorhees expressed his disapproval on X:
Trumpcoin is both stupid and embarrassing. It signifies a major shift in U.S. fintech policy towards much more lenient innovation. Both statements are accurate.
Anthony Scaramucci, founder of SkyBridge and former White House Communications Director, likened it to “Idi Amin-level corruption,” referencing the military leader whose tenure in Uganda during the 1970s was marred by corruption.
As for the Bitcoin reserve—believed to be filled with seized digital assets, according to David Sacks, Trump’s crypto czar—it seems unrealistic. Crypto analyst Dessislava Aubert mentioned to the Agence France-Presse that the U.S. government should return confiscated Bitcoin to all individuals identified as victims of hacks.
Despite the skepticism surrounding these initiatives, O’Leary continues to believe that Trump’s policies will legitimize crypto in ways no previous administration has achieved.
“The significant takeaway is that this will be the first administration to assert that this sector belongs in America, that development should happen here, and that we should excel in this technology and lead the global effort,” O’Leary concluded.
Whether Trump’s promises will lead to enduring regulatory clarity or simply serve as political posturing remains to be seen. For now, the crypto community remains watchful, caught in the balance between hope and profound skepticism.