Is Trump's crypto promotion just more grifting?

Donald Trump once decried crytpocurrency investment as a "a scam'.

Now he's using it as a new strategic reserve to back the dollar.

That's quite a turnaround in policy.

So has Donald suddently 'seen the light' due to anything the crytpo industry has done to improve its notorious record of volatility and lack of regulation and oversight?

Or has he just decided to get in on the act?

Trump’s sudden embracing of cryptocurrency seemed to come after an influx of $130 million to his campaign from the crypto industry.

However, any hopes among crypto bros that this would Trump would make crypto respectable were soon dashed.

Just before his inauguration he launched his own  ‘memecoin’ – actually undermining crypto further - and then his wife Melania followed soon after with one of her own.

CNN”s senior business writer Allison Morrow explained: “Days before his inauguration, Trump shocked many of his crypto supporters by peddling a digital token known as a meme coin, a functionally worthless asset that trades on hype.”

Both meme coins soared (reaching a notional valuation of €67bn.)before predictably crashing, leaving many ‘investors’ seriously out of pocket, but the new Pres very much richer as his organisation pocketed millions of dollars in fees alone.

Comedian Bill Maher quipped on his show Real Time: “I’m sure it’s just a coincidence but before the inauguration, Trump increased his wealth by 89 percent in a day to $58 billion.”

“So Trump voters help me out on one thing. You voted for him because you couldn’t afford eggs but you can afford the Melania magic coin?”

Even cryptobuffs like Anthony Scaramucci of investment firm Skybridge Capital were not impressed with the new direction.

 “Sometimes in the desert, when you see the oasis, there could be a mirage,” he said.

“You get everything with him. You get the trade wars, you get the flip-flopping," he said.

Scaramucci briefly worked for Trump in his first presidency and co-presents a policai podcast called The Rest is US Politics.

 Launching a meme coin shortly before assuming the presidency signals a lack of focus on the industry’s needs, YahooFinance reported Scaramucci saying.

Trump has said he plans to make America ‘the crypto capital of the planet’ and build a strategic reserve of bitcoin.

This means backing the most important currency in the world with what is probably the most volatile 'asset', and one that has fuelled money-laundering, criminality and all the nefarious activities on the Dark Web.

Trump has also pledged to fire a regulator who has been seen as tough on crypto currencies.

As a result, 'crypto' has been on an even more hair-raising rollercoaster ride than usual under Trump.

Bitcoin, as a market-leading example, soared to $75,371.69 the  morning after the election than a new record. After Trump declared it as the basis of a reserve fund for the dollar, it hit €106k in December before falling to €92k in January, rising later than month once again to €106.

And then, yes, you guessed, it fell again and is currently at around €86k.

Other crypto currencies have also benefitted from being named on the strategic reserve, spiking in value before Trump's announcement of which ones made the list , suggesting that those 'in the know' could have made hundreds of millions in profits.

"Blockchain and cryptocurrencies are not de facto bad or evil. The baseline of cryptography, distributed ledgers, and decentralized consensus protocols is rooted in worthy ideals—namely that of putting power in the hands of collectives rather than the centralized individuals and entities (which increasingly concentrate power)," wrote crypto commentator Jesse Damiani recently on his blog Realitystudies.

"Unfortunately, the confusing and unregulated “wild west” aspects of 'crypto' technology make it an ideal zone for graft, fraud, and ransoms (e.g., cyberattacks on hospitals frequently involve ransom payments in cryptocurrencies because they are easier to send without oversight and harder to track and retrieve once disbursed)."

Donald Trump’s forays into crypto – and a suggestion that a European Central Bank should follow suit or indeed any central bank – were slapped down in no uncertain style by ECB Governor Christine Lagarde.

“Reserves have to be liquid. Reserves have to be secure. They have to be safe that they should not be dogged by the suspicion of money laundering or other criminal activities and as a result, I’m confident that bitcoin will not enter the reserves of any of the Central Banks,” she said at a press conference to announce the bank’s recent 0.25% interest rate cut.

The head of the Czech National Bank Ales Michl had said he wanted to follow Trump’s lead and plough billions into bitcoin to back the eastern European nation’s currency.

But Ms Lagarde seemed to slap down this notion, saying : “I have had a good conversation with my colleague from the Czech Republic and leave it to him to make any announcement he wants to make but I’m confident that he’s convinced of the necessity to have liquid secure and safe reserve.”

The head of the US Central Bank – The Federal Reserve - has also said US law does not allow it to hold bitcoin and it is not looking for any change to enable it to do so.