# Trump’s Crypto Support Yields Significant Bitcoin Gains, Study Finds
A recent analysis indicates that President Donald Trump’s advocacy for cryptocurrencies has had a tangible positive impact on the Bitcoin market. David Krause, an emeritus professor at Marquette University, published a study on SSRN contending that Trump’s supportive remarks and policies on cryptocurrencies resulted in Bitcoin (BTC) demonstrating significant excess returns compared to the S&P 500.
Krause’s study underscores the vulnerability of the cryptocurrency market to signals from political power, illustrated acutely by the case of “World Liberty Financial” (WLF), a politically backed financial initiative.
# Bitcoin Reacted Sharply; Ethereum Did Not
Researchers examined five major events related to Trump from May 2024 to April 2025 to analyze excess returns. These events included: Trump’s declaration of the U.S. as the “crypto capital” (July 2024), the launch of WLF (September 2024), his electoral victory (November 2024), the establishment of a national crypto reserve (March 2025), and his endorsement of stablecoin legislation (March 2025).
Analyzing the nine days around these events, Bitcoin exhibited an average excess return of 0.94% during these periods, a statistically significant difference compared to the average return during non-event periods (-0.04%). The p-value of 0.0498 met the 5% significance level. Conversely, Ethereum (ETH) did not exhibit similar patterns, suggesting that Trump-related signals were specifically focused on Bitcoin rather than the broader cryptocurrency market.
Over the same period, Bitcoin achieved an annual cumulative return of 55.36%, in stark contrast to the S&P 500’s 10.59% and gold’s 43.49%. Ethereum, however, saw a decline of 40.44%. Despite Bitcoin’s high annual volatility of 51.46%, its risk-reward ratio (Sharpe ratio) stood at 1.076, outperforming the S&P 500’s 0.55, indicating greater rewards for the risks taken.
# Political Messages Drive Asset Prices Through Bitcoin
This study is significant as it empirically shows how political actions can move asset prices, beyond mere market reactions. Trump consistently made cryptocurrency support statements during the 2024 presidential campaign and announced the creation of a federal “crypto reserve” in March 2025. This acted as a public guarantee, bolstering investor confidence in Bitcoin.
The connection between Trump and “World Liberty Financial” (WLFI), in which Trump’s family held a 60% stake and retained 75% of token sales revenue, suggests that such signals were not mere endorsements but potentially part of a strategic asset allocation plan. Despite the tokens’ iliquidity and lack of dividend payouts, WLFI raised $550 million, with over $400 million allocated to the Trump family.
# Politics and Capital: A Risky Combination Undermining Regulatory Trust
A concerning aspect highlighted by the report is the relationship with regulatory bodies. Shortly after investing in WLFI, Justin Sun, one of its major investors, avoided an SEC investigation and later took up an advisory position at WLFI. This prompted the Senate Banking Committee to question the potential for “regulatory capture.”
Additionally, WLFI executives gained access to closed-door meetings at the White House. In such blurred lines between power and capital, the market is likely to overvalue cryptocurrency projects with political connections, resulting in market distortions and criticisms over the transparency of cryptocurrency price formation.
# Bitcoin Has Become a Political Asset
The study’s indication that Trump’s statements exert structural influence on prices, rather than being transient boons, challenges the traditional concept of cryptocurrencies as autonomous and decentralized assets. Political influence, concentrated on Bitcoin, could serve as a critical indicator of the cryptocurrency market’s susceptibility to political developments.
Professor Krause states, “Political signals should now be considered as substantial investment information for digital asset investors,” urging policymakers to implement mechanisms to counter market distortions and regulatory evasion.
The intertwining of politics and assets is not new. However, its manifestation in cryptocurrencies, which champion decentralization, poses significant trust issues for the market.
