Coinbase CEO Brian Armstrong to Meet Trump for Personnel Discussions

The intersection of cryptocurrency and politics is growing increasingly pronounced as President-elect Donald Trump’s transition team engages with prominent figures in the crypto industry and explores significant moves within the sector. In recent developments, Coinbase CEO Brian Armstrong is set to meet with Trump to discuss potential personnel appointments, while Trump Media and Technology Group is reportedly in advanced talks to acquire Bakkt Holdings, a cryptocurrency exchange owned by Intercontinental Exchange. 

Coinbase CEO Brian Armstrong to Meet President-elect Donald Trump Amid Crypto-Friendly Appointments

Coinbase CEO Brian Armstrong is scheduled to meet with President-elect Donald Trump on Monday. The meeting, first reported by The Wall Street Journal, is expected to focus on “personnel appointments” that could shape the future of the crypto industry.

President-elect Trump has made rapid progress in assembling his cabinet, demonstrating an openness to tech-savvy and crypto-friendly figures. Among his recent appointees are Robert F. Kennedy Jr., a vocal supporter of bitcoin, who will serve as Secretary of Health and Human Services; SpaceX CEO Elon Musk; and Vivek Ramaswamy, co-founder of Strive Enterprises. Musk and Ramaswamy have been tapped to lead the newly created Department of Government Efficiency. All three have demonstrated a positive stance toward cryptocurrencies, signaling a potential shift in how the government engages with digital assets.

However, critical vacancies remain, particularly for positions with a direct influence on the financial and regulatory environment for cryptocurrencies: Treasury Secretary and Chair of the Securities and Exchange Commission (SEC). The individuals chosen for these roles could have profound implications for the crypto market.

Howard Lutnick, CEO of Cantor Fitzgerald, has emerged as a potential candidate for Treasury Secretary. Lutnick is not only a prominent figure in traditional finance but also a vocal advocate for bitcoin. His firm, Cantor Fitzgerald, has acted as a custodian for Tether (USDT), the world’s largest stablecoin. Over the summer, Lutnick defended Tether’s reserves, emphasizing their composition of US Treasurys, bitcoin, and gold at the Bitcoin 2024 conference.

A Treasury Secretary with Lutnick’s background could herald a friendlier regulatory approach to stablecoins and the broader crypto ecosystem. Tether’s role as a cornerstone of crypto liquidity makes Lutnick’s potential appointment a point of significant interest for the industry.

Coinbase, the largest US-based cryptocurrency exchange, has reportedly been collaborating with Trump’s transition team. The New York Times recently reported that Armstrong has been instrumental in facilitating discussions between Lutnick and the incoming administration, possibly positioning himself as a key advisor on crypto-related matters.

Coinbase has declined to comment on the specifics of Monday’s meeting. However, industry insiders believe that Armstrong’s involvement could influence Trump’s picks for regulatory roles, particularly at the SEC and Treasury.

Ripple and Circle Also in the Loop

Armstrong is not the only crypto leader engaging with the Trump transition team. Ripple CEO Brad Garlinghouse has confirmed discussions with individuals close to Trump about potential appointments, according to The New York Times. Executives from Circle, the issuer of the USDC stablecoin, have also reportedly been in contact with Trump’s team. These engagements suggest a concerted effort by the crypto industry to position itself favorably within the incoming administration.

The Trump administration’s approach to crypto could mark a significant departure from the stance of current regulators. The SEC, under outgoing Chair Gary Gensler, has taken a hardline approach to crypto enforcement, including high-profile lawsuits against Coinbase and Ripple. A more crypto-friendly SEC chair could mean a shift toward clearer regulations and less adversarial oversight.

Similarly, the appointment of a Treasury Secretary like Lutnick could support the integration of stablecoins into the traditional financial system, offering regulatory clarity and fostering adoption. Lutnick’s endorsement of bitcoin as a reserve asset further suggests a potential alignment with the crypto industry’s long-term goals.

In a related development, Bakkt Holdings Inc. (NYSE: BKKT) saw its stock soar an astonishing 162.46% on Monday, closing at $29.71, following a report by The Financial Times that Donald Trump’s media company is in advanced discussions to acquire the cryptocurrency exchange. The momentum didn’t stop there, as the stock climbed an additional 16.43% after hours, reaching $34.59. Trump Media and Technology Group Corp. (DJT), the parent company of Truth Social, also experienced a surge, closing up 16.65%, though it lost 3.5% in after-hours trading.

The potential acquisition, reportedly an all-share deal, marks a bold move by Trump Media as it aims to expand its presence in the cryptocurrency sector. Trump Media is controlled by the United States president-elect, Donald Trump, who holds a 53% majority stake. 

Despite Monday’s dramatic rally, Bakkt’s stock remains approximately 44% down year-to-date and an eye-watering 97% below its October 2021 peak of $1,063. The company, owned by Intercontinental Exchange (ICE), has struggled to gain traction in the competitive cryptocurrency exchange market, particularly in its crypto custody business, which is set to be wound down. Notably, the custody arm will not be part of the deal with Trump Media, according to The Financial Times.

The surge in Bakkt’s stock has now elevated its valuation to over $400 million, a significant uptick for a company that has struggled to achieve profitability.

If finalized, the acquisition would represent a significant milestone in Donald Trump’s increasing involvement in the cryptocurrency sector. Trump’s pro-crypto stance during his presidential campaign included pledges to end regulatory hostility toward the industry and to create a strategic Bitcoin reserve for the US government. His campaign promises, combined with his victory earlier this month, have already buoyed the cryptocurrency market. Bitcoin (BTC) has surged roughly 30% since Trump’s election win, reflecting optimism about a more favorable regulatory environment for crypto under his administration.

Trump has previously licensed his image to multiple non-fungible token (NFT) collections and backed his family’s crypto project, World Liberty Financial, which generates fees for the Trump family. The acquisition of Bakkt could be another step in positioning Trump Media as a significant player in the digital asset space.

A central component of Trump’s crypto strategy revolves around establishing a US Bitcoin reserve. However, this ambitious plan is expected to face significant legislative hurdles. Creating a Bitcoin reserve would require congressional approval, a challenging task given the polarized political landscape and Bitcoin’s historically volatile nature.

Izabella Kaminska, founder of the finance-focused news outlet The Blind Spot, speculated on X that Trump might sidestep congressional approval by using a special purpose vehicle (SPV). She suggested that Trump Media could utilize Bakkt as an SPV to accumulate Bitcoin, with profits potentially transferred to the US government under a profit-sharing agreement.

Challenges Ahead for Trump Media

While the potential acquisition of Bakkt signals bold ambitions, Trump Media will likely face several challenges. The company’s ability to turn Bakkt into a profitable venture remains uncertain, particularly as Bakkt’s existing business lines, including crypto custody, have struggled to gain market traction. Moreover, Trump’s plan to establish a Bitcoin reserve could ignite political opposition, as not all lawmakers on Capitol Hill may support the federal government holding such a speculative and volatile asset.

Furthermore, questions remain about whether Trump Media can sustain the momentum generated by its association with cryptocurrency. Critics argue that the crypto market’s inherent volatility could pose risks to Trump Media’s valuation and future endeavors.

The news of Trump Media’s interest in Bakkt has rippled across the cryptocurrency market. Trump’s election has already sparked a wave of optimism, with Bitcoin and other digital assets experiencing significant price increases. The possibility of Trump leveraging Bakkt as part of a larger crypto strategy has added fuel to the rally, with many speculating that Trump’s administration could pave the way for increased adoption and regulatory clarity for digital assets.

Meanwhile, traditional players like Intercontinental Exchange, the current owner of Bakkt, have remained tight-lipped about the reported deal. A spokesperson for ICE declined to comment, and neither Trump Media nor Bakkt has issued an official statement.

As Trump prepares to assume office, the intersection of politics and cryptocurrency will undoubtedly come into sharper focus. The reported acquisition of Bakkt, coupled with Trump’s pro-crypto rhetoric, suggests that digital assets could play a prominent role in his administration’s economic strategy.