Real-Time BNB Signal Analytics
Real-Time BNB Signal Analytics
Trump's Crypto Pardon: A Calculated Bet or Just Clueless?
Alright, let's dissect this Trump-Zhao pardon situation. The headline is that Trump claims he doesn't know who Changpeng Zhao is, despite pardoning the Binance founder—a guy who pleaded guilty to enabling money laundering in 2023. Four months in the clink and a CEO resignation later, Trump’s saying "who?" on 60 Minutes.
The official line is that Zhao was a victim of a "witch hunt" by the Biden administration. The White House Press Secretary even called it a "war on cryptocurrency." Seems a bit much, doesn’t it? It suggests a coordinated attack, but where’s the evidence? It's the kind of statement that plays well to a certain base, but lacks any real substance.
Here's the interesting part: Zhao's companies have partnered with firms linked to Trump, including Dominari Holdings, where Trump's sons sit on the board of advisors. So, while Trump claims ignorance, his family seems to be rather familiar with the crypto world—and Zhao's orbit. This raises a few questions. Is this willful blindness, or is there a more strategic game at play? And why does Trump seem to be actively involved with the crypto space now, after years of near silence on the topic?
Trump also pardoned founders of the crypto exchange BitMEX, who faced money laundering charges, and Ross Ulbricht, founder of the Silk Road. It’s a pattern, isn’t it? A clear trend. I've looked at hundreds of these pardons, and this level of consistency within a single, niche industry is atypical. As Trump claims, 'I don't know who he is', says Trump after pardoning crypto tycoon.
Now, let’s pivot to the broader crypto market. Bitcoin is hovering around $108,000, and Ethereum is at about $3,750. Treasury Secretary Scott Bessent suggests that high interest rates "may have driven" parts of the economy into recession. Crypto initially reacted positively to the prospect of rate cuts, but those gains faded. Why? Because traders are weighing whether cuts driven by a slowing economy are a good thing or a sign of trouble.
BlackRock's IBIT saw a $291 million outflow in a single day, signaling a shift in institutional sentiment. The products saw a net outflow of $388.43 million on October 30. That's not chump change. It suggests that even the big players are getting nervous.
On-chain data shows Bitcoin stuck below a key $113,000 cost-basis level. Glassnode analysts point to $88,000 as the next significant support level. That's a potential 20% drop from current levels. Is crypto really a safe haven in a recession, or is it just another asset class vulnerable to economic headwinds?
Then there's the world of Digital Asset Treasuries (DATs). These firms hold digital assets and aim to outperform the underlying. But they face challenges, including shrinking net asset value multiples (mNAVs). ETHZilla even sold $40 million of its ETH to fund a buyback.
Quynh Ho at GSR called it "an uncommon move," but potentially "rational" if the stock trades at a deep discount to NAV. Cosmo Jiang at Pantera Capital says buybacks are useful when used with discipline. But Michael Bucella at Neoclassic Capital warns that selling core assets for buybacks only works for liquid holdings like Bitcoin, Ether, or Solana. Selling smaller tokens risks a "death spiral."
A "DAT death spiral," according to VCs, looks like prolonged sub-NAV trading leading to accelerated treasury selling, falling NAV, and mounting pressure on the shares. Early warning signs include shrinking treasury transparency, repeated ad-hoc buyback announcements, or unfavorable convert terms.
Mathijs van Esch at Maven 11 argues that DATs have higher cost bases to just hold digital assets. If they don't manage to utilize those assets efficiently, their asset basis will erode from fees. That's the bear case for a DAT. The Funding: Crypto VCs discuss the next phase of DATs amid rising buybacks.
So, what’s the common thread here? Risk. Trump's pardon, the volatile crypto market, the precarious situation of DATs—it all points to a high-stakes game with uncertain outcomes. The question isn't whether Trump knows Zhao, but whether he understands the implications of his actions. And frankly, based on the data, it's hard to say.
My analysis suggests that Trump's actions are less about understanding crypto and more about leveraging it for political gain. Whether it's a calculated bet or just plain cluelessness, the consequences could be significant.
