Crypto Finally Suffers From Trump Blowback

After a week of crypto builders (and Eric Trump) descending on Dubai for a week of conferences, it seems that the pendulum is swinging back stateside as Democrats are mounting a big crypto counteroffensive.

An incredibly important stablecoin bill may be losing ground in D.C., Arizona’s Democratic Governor just shot Bitcoin momentum in the foot, and Ethereum and The Fed both have big updates playing out this week.

Per usual, Coinage recapped all these stories and more in our live Monday broadcast (above.)

Arizona Shoots Down Bitcoin Bill

The Grand Canyon State left a canyon-sized hole in the heart of bitcoiners everywhere when the state’s Governor vetoed a bill this weekend that would’ve allowed the state to invest in Bitcoin.

“The Arizona State Retirement System is one of the strongest in the nation because it makes sound and informed investments. Arizonans' retirement funds are not the place for the state to try untested investments like virtual currencу,” Governor Hobbs said in a statement.

Arizona Senate Bill 1025 had proposed using seized funds to invest in BTC and create a digital assets reserve. After passing the state House in a narrow 31–25 vote, the bill reached Hobbs' desk only to die. That could be good though, because now the race might swing to New Hampshire. And considering it’s the Live Free or Die State — well, that would just seem more fitting to become the first state to green light a state-level Bitcoin reserve.

Unsurprisingly, however, many crypto fans freaked out and went nuclear on Democrats. But it’s really just the beginning of an increasingly political battle over crypto’s standing in America. Unfortunately, President Trump’s own crypto endeavors have only led to Dems digging in.

Trump’s Stablecoin Secures $2 Billion UAE Deal

This week, Eric Trump and I were in Dubai. Not like, together — but both there to talk crypto. Trump announced the family’s stablecoin, USD1, would be used to help an Emirati wealth fund settle a $2 billion investment into Binance.

We’ve covered this before anyone, but the fact that the Trump’s have launched a digital dollar being used by foreign nationals to settle deals like this has definitely sparked ethical concerns. As adoption for USD1 grows, the Trumps stand to print billions of dollars in profits.

Democrats appear to have taken notice and are now digging in. After seemingly playing ball on key stablecoin legislation, even Chuck Schumer is raising a stink. A report from Politico over the weekend seemed to raise the specter of Dems voting against the bill.

That could be a very bad omen for crypto because just a couple weeks ago this looked to be a rare bipartisan win-win. Dems like Schumer are fine with stablecoins because they would stand to help big banks just as well when they play catchup — but considering Trump is making so many waves with his own, that may have re-awoken crypto hatred long pioneered by Sen. Elizabeth Warren. She took to twitter to rally the point home.

To be fair, it’s a bit more nuanced than a foreign government directly giving Trump’s family money — but still the point remains that some of this collapse in recent crypto goodwill (outside of Sen. Warren) is directly linked to Trump’s own personal crypto dealings. And that’s not something you hear too many people in crypto talking about.

Winning back support among Dems to get things finalized now becomes pretty important, or a bunch of money flowing into crypto likely gets delayed by a bit.

Celsius Founder Sentencing

The founder of one of the largest crypto lending platforms to collapse in the crypto winter of 2022 is facing his sentencing this week. The DOJ is pushing for 20 years for Celsius founder Alex Mashinsky.

Frankly, that would be quite high to see considering SBF got 25 and Mashinsky pled guilty. It’s also one of the few high-profile crypto sentencings to hit since Trump has pushed a pro-crypto agenda.

But, considering many people lost a lot of money in Celsius (and that he lied to me on Yahoo Finance when I called out a lot of these issues before the collapse) there aren’t a lot of people asking for mercy. He will learn his fate on May 8. Coinage will cover the news from the courtroom in NYC.

Big Fed Decision on Deck

Outside of politics, macro forces are once again expected to blow the winds one way or another this week at the Fed is largely expected to keep rates steady where they are. That won’t be the news to watch as much as what Fed Chair Jay Powell says will be.

Any insights on how Trump’s tariffs might be impacting the economy could swing markets again. We’ll hear what Powell has to say on Wednesday.

Ethereum’s Pectra Upgrade

Last but not least, Ethereum oddly has news this week. The network is planning its so-called Pectra upgrade for May 7 and people are excited.

CoinDesk is writing that it could be setting up for a short squeeze — and other analysts like Fundstrat’s Sean Farrell have noted that ETH trading sideways for this long usually leads to a break out. An upgrade like this might just be the catalyst ETH needs for that.

Pectra is set to make smart contract optimization across ETH’s Layer-2 networks more efficient, and considering a lot of DeFi is still being built on ETH, the upgrade could be coming at just the right moment as TradFi looks to choose which chains they want to build on.

The upgrade could potentially also be a big boost for Base, Coinbase’s Layer-2 that is continuing to search for things to bring onchain. In our latest episode, we dig into their latest invention — so-called contentcoins which are really just abstracted memecoins tied to a piece of content. Are they really better for creators than memecoins? Watch our episode to learn more (every view on YouTube helps to burn our PLYBTN tokens as you’ll find out.)

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