The term “pump and dump” refers to a scheme where certain investors acquire a financial asset at a low price and then actively attempt to inflate its market value by spreading positive narratives—often through social media or various online forums—causing the price to rise.

This is a well-known phenomenon, particularly in the world of small-cap stocks, but it is even more prevalent in the crypto space. Such behaviour is, in most cases, illegal. However, that does not seem to deter Donald Trump and his inner circle from engaging in precisely this tactic—now with the full financial muscle of the United States government behind them.

For some time, speculation has abounded that Trump would introduce a so-called “Strategic Bitcoin Reserve,” where the U.S. government would hold Bitcoin reserves—in effect, a state-backed Bitcoin purchasing strategy. However, in recent weeks, investors have begun to lose confidence that such a move would materialise.

Yet, this Sunday, Trump took to his own social media platform, Truth Social, to suggest that a “U.S. Crypto Reserve” would be a good idea. In a post Trump stated:

“A U.S. Crypto Reserve will elevate this critical industry after years of corrupt attacks by the Biden Administration, which is why my Executive Order on Digital Assets directed the Presidential Working Group to move forward on a Crypto Strategic Reserve that includes XRP, SOL, and ADA. I will make sure the U.S. is the Crypto Capital of the World. We are MAKING AMERICA GREAT AGAIN!”

Notably, he did not speak of a Bitcoin Reserve but rather a Crypto Reserve, and he specifically mentioned several different cryptocurrencies.

One of the blockchains Trump explicitly highlighted was Solana.

And guess what? Trump’s very own memecoin, $TRUMP, has just been launched on the Solana blockchain.

In other words, Trump is now directly opening the door for the U.S. government to purchase $TRUMP coins. And, predictably, the price of Bitcoin has surged by approximately 7%. Meanwhile, $TRUMP has jumped by 18% compared to yesterday’s price.

This move must also be seen in the context of what I recently described as the unwinding of the Trump Trade. In my blog post, Trump-Trade Unwinding: Bitcoin, (Micro)Strategy and Tesla in the Silver Trap, I detailed how the post-election surge in Bitcoin, Tesla, and MicroStrategy appeared to be reversing, with Tesla already down over 30% and Bitcoin losing momentum.

I also noted that MicroStrategy (now Strategy)’s extreme exposure to Bitcoin posed significant systemic risks, similar to the Hunt brothers’ infamous attempt to corner the silver market in 1980.

Now, Trump’s announcement can be interpreted as an attempt to halt or even reverse this unwinding. By signalling potential government intervention in crypto markets, he is throwing a lifeline to struggling positions—possibly including those of his own allies.

Whether this effort will succeed or merely delay the inevitable remains to be seen, but the implications for market stability are profound.

Potential Legal Implications

I am not a legal expert, but from an economic perspective, Trump’s statement could be seen as market manipulation.

In traditional finance, attempts to inflate asset prices for personal or political gain—commonly known as “pump and dump” schemes—are illegal.

If the U.S. government starts acquiring cryptocurrencies like Solana, potentially benefiting Trump’s personal financial interests, this could invite scrutiny from regulatory bodies such as the SEC, CFTC, and DOJ.

The Broader Consequences of Politicised Financial Regulation

Beyond the immediate legal questions, today’s announcement highlights a much bigger issue: the increasing politicisation of financial regulatory institutions under Trump. Since taking office in January 2025, he has reshaped key financial regulatory agencies, including the SEC, CFTC, CFPB, and FDIC, placing individuals who align with his deregulatory vision. This move suggests that cryptocurrency policy is now being shaped as much by political motivations as by economic rationale.

The consequences of this shift could be profound:

• Loss of Market Confidence – Investors, both in crypto and traditional finance, may start to question whether U.S. markets are being driven by economic fundamentals or by political favoritism.
• Increased Volatility – The mere perception that government policy can be influenced by personal financial interests will make markets more unpredictable.
• Legal Uncertainty – If laws and regulations change based on political convenience rather than clear regulatory frameworks, businesses and investors will face a chaotic environment.

With just a single social media post, Trump has significantly increased his personal wealth. There appear to be no limits to what he will do to enrich himself—even if it means undermining confidence in the global financial system.

And what about the “dump”? Well, perhaps some of Trump’s associates will now be able to exit some unfortunate crypto positions that have been underwater over the past month.

For those who believe in the potential of blockchain technology and cryptocurrencies as viable financial instruments (as I indeed do), this should be infuriating. Rather than fostering trust in the crypto sector, Trump is blatantly politicising the market and encouraging fraudulent behaviour that destabilises confidence in the entire industry.