Donald Trump’s push for cryptocurrency could put the UK at a disadvantage
Jay Smith, a 37-year-old from Basingstoke, Hampshire, has a remarkable story that many aspiring traders dream of.
In 2013, while working as a Parcelforce sorter, he began investing his savings in bitcoin, the most well-known cryptocurrency globally. He estimates that his initial investments of around £1,000 would be valued at £1.6 million today if he hadn’t cashed out some and lost a bit in crypto-related schemes that turned out to be scams.
Now, Smith is a millionaire and a full-time crypto trader, with over 10,000 users following and emulating his trading strategies on the eToro platform.
Currently, his primary focus is on stocks rather than crypto, with only about 5% of his portfolio invested in digital assets. His significant holdings now include Microsoft and Nvidia, which are considered less risky.
Amid fading interest in crypto, global attention towards the sector has surged, partly due to Donald Trump.
The newly elected US president has not only pledged support for the sector but has also introduced his own “meme coins” with the First Lady Melania. These meme coins are novelty crypto items bought for collectibles or speculative purposes.
Sensible figures within the crypto industry are concerned about the potential devaluation of the Trump meme coins, posing risks to inexperienced investors and tarnishing the sector’s reputation. Despite the uncertainty, many anticipate Trump fulfilling his promise to establish the US as the global “crypto capital.”
During his campaign, Donald Trump endorsed crypto, and he and Melania have introduced their own meme coins
MARK HUMPHREY/AP
Despite positive developments in the US, advocates of Britain’s crypto sector are concerned about missed opportunities.
During the Biden administration, where the US was cautious about crypto, the UK had the chance to position itself as a global crypto hub by enacting regulations to legitimize the sector. Unfortunately, the enthusiasm seems to have waned under Trump’s rule.
Graham Rodford, CEO of London-based crypto exchange Archax, expresses disappointment, stating that the UK has lost its competitive edge compared to the US. This shift could impact investors and businesses looking for innovation-friendly environments with supportive leadership.
CryptoUK, a trade body, echoes a similar sentiment, emphasizing the risk of the UK falling behind on the global stage and losing its aspiration of becoming a leading crypto hub.
On the investment front, venture capital firm Andreessen Horowitz recently announced the closure of its London office, underscoring the importance of regulatory momentum. Anthony Albanese, a managing director at the firm, highlights the US’s favorable policy environment as a key factor in their decision.
The origins of the crypto boom can be traced back to November 2008, when an anonymous figure named Satoshi Nakamoto introduced a groundbreaking paper outlining the concept of bitcoin as a digital currency.
At a time of low trust in traditional financial institutions during the global financial crisis, Nakamoto envisioned a currency independent of banks and governments. The innovation of blockchain technology was the solution to ensure the security and authenticity of digital transactions.
Gavin Wood, co-founder of ethereum, is one of the significant figures in the British crypto space
LUKAS SCHULZE/GETTY IMAGES
CHRIS HARRIS FOR THE TIMES
The rise of bitcoin in the early 2010s heralded the emergence of the crypto industry. New digital currencies, brokerage firms, and crypto exchanges began sprouting up, shaping a growing market. Even bitcoin ATMs made their appearance, allowing enthusiasts to exchange physical currency for digital assets.
The UK, as a global financial hub, provided the launchpad for several crypto entrepreneurs.
Notably, founders like Ben Reeves established Blockchain.com from a modest York flat. The company, now headquartered in the Cayman Islands and valued at $7 billion, continues to attract users worldwide.
Another influential figure, Gavin Wood, co-founded ethereum and later developed the Polkadot platform, valued at $9.6 billion.
Similarly, Mustafa Al-Bassam, co-founder of the Celestia Foundation, raised $100 million in investments, maintaining a valuation of around $5 billion. Despite residing in London, Al-Bassam’s company is based in Liechtenstein due to regulatory uncertainties and financial constraints in the UK.
George Osborne at the Conservative Party Conference in 2014, initiating a review of the crypto sector in the UK
TIMES PHOTOGRAPHER JACK HILL
In 2014, UK Chancellor George Osborne’s review aimed to position the UK as a leading crypto hub by embracing emerging technologies. Subsequent efforts by the Financial Conduct Authority (FCA) to introduce crypto regulations underscore the strategic importance of aligning the UK with global standards.
Legislations like the Property (Digital Assets etc) Bill seek to legitimize digital holdings and cryptocurrencies, providing clarity and protection for investors. This regulatory framework aims to enhance consumer security and business operations within the crypto sector.
The FCA’s survey reveals a growing interest in crypto assets among UK adults, with a significant rise in ownership and value. Despite the risks associated with unregulated investments, the appeal of potential wealth generation through crypto remains strong.
As the crypto industry matures, the UK faces the challenge of balancing regulatory oversight with innovation. International shifts in regulations and market dynamics emphasize the importance of timely action to sustain the UK’s position in the global crypto landscape.
For Ripple’s UK and Europe managing director Cassie Craddock, regulatory agility is crucial for the UK to retain its leadership in digital assets and financial services.
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