Cryptocurrency advocate Eric Trump suggests that Federal Reserve interest rate cuts could significantly drive up cryptocurrency prices.
"I believe cryptocurrency prices could potentially surge," Trump stated, adding that due to the seasonal characteristics of cryptocurrencies, the fourth quarter presents particularly strong growth potential. His cryptocurrency mining company "American Bitcoin" (ticker: ABTC) — which his brother Donald Trump Jr. also supports — went public on NASDAQ in early September following its merger with Gryphon Digital Mining.
Trump also noted that declining borrowing costs would free up capital for higher-risk investments. Markets currently widely expect Fed Chairman Jerome Powell to announce a 25 basis point rate cut on Wednesday, though the path for subsequent cuts remains unclear.
Rate cuts reduce the attractiveness of safe interest-bearing assets, encouraging investors to shift toward stocks and speculative trading instruments like Bitcoin (BTC-USD). Historical data shows cryptocurrencies often rally following easing cycles, though not in a straight-line trajectory. While rate cuts may trigger short-term gains, they could also signal economic weakness, potentially pressuring high-risk assets.
Trump observed that people who have long been skeptical of cryptocurrency are now changing their stance, citing large private wealth management firms as examples. He recalled a friend working in private wealth management who previously refused to invest in Bitcoin, preferring U.S. Treasuries, but now recommends clients increase their cryptocurrency exposure.
"These people are changing, and changing rapidly. Without question, this will add fuel to the entire cryptocurrency movement," Trump said.
This optimistic outlook has context behind it.
The Trump family has established deep connections with the digital asset sector. Eric Trump co-founded "American Bitcoin," while President Trump supports crypto-friendly policies, including the GENIUS Act (Promoting Innovation and Digital Asset Security Act), aimed at providing regulatory clarity for the cryptocurrency industry.
The Trump family has attempted to enter the cryptocurrency space through various means: accepting campaign donations in cryptocurrency form, offering cryptocurrency payment options on their social media platform Truth Social, and launching respective meme coins (Trump and First Lady Melania Trump each launched one).
Truth Social's parent company, Trump Media, holds substantial Bitcoin positions. The Trump family also maintains ties with cryptocurrency investment firm World Liberty Financial.
Bitcoin has gained 24% year-to-date and risen over 92% in the past 12 months, partly due to regulatory clarity from policies like the GENIUS Act, which has boosted investor sentiment.
In Eric Trump's view, the digital asset industry is here to stay. "I see this as competition between cryptocurrency and traditional banking," he said. "The entire industry — especially in America — has tremendous utility value."
He also considers Bitcoin as "digital gold," calling it "gold without all the drawbacks (of traditional gold)."