Dogecoin (CRYPTO: DOGE) soared by 250.9% last year, outperforming most other major cryptocurrencies

Elon Musk is stepping down from his role in President Donald Trump's administration, leaving behind a legacy of pro-crypto policies that could continue to drive value for Bitcoin and other major tokens.

After pivoting toward a more interventionist economic policy during the 2020 presidential election, former President Donald Trump surprised many investors by adopting a hands-off approach to crypto investing. Despite the U.S. government establishing a strategic Bitcoin reserve and a digital asset stockpile earlier this year, there are currently no plans for the administration to purchase any cryptocurrencies.

However, President Trump's administration has focused on slashing red tape and reducing government overreach, which bodes well for the crypto industry. Earlier this year, Congress approved a bill to extend the window for reporting cryptocurrency gains to the Internal Revenue Service (IRS). But the administration intervened to remove that provision from the final version of the legislation.

Moreover, President Trump has vowed to slash America's national debt, which could be aided by reducing the scope of government programs. A move in that direction would likely benefit cryptocurrencies, as they are often used to facilitate cross-border payments, an area where government intervention is usually greatest.

Image source: Getty Images.

The SEC's focus shifts as crypto cases are paused

During his presidential campaign, President Trump expressed support for cryptocurrency and said he was open to the U.S. adopting Bitcoin. After winning the election, he appointed officials known for their ties to the crypto industry. For example, President Trump's pick to run the Securities and Exchange Commission (SEC), Paul Atkins, previously served as the co-chairman of a crypto advocacy organization called the Token Alliance and as an advisory board member of blockchain company Securitize.

Atkins was confirmed by the Senate in April, but even before he was officially sworn in, the SEC paused or withdrew several of its active legal cases. Among them was the SEC's case against Ripple, which began in December 2020. The agency was also set to sue Binance, the world's largest cryptocurrency exchange, and Coinbase (NASDAQ:COIN), the largest U.S. cryptocurrency exchange, but ultimately decided against it.

"We are focused on using our limited resources to pursue the most pressing cases," an SEC spokesperson told Blockworks in April.

After the SEC announced it was putting a hold on several cases, President Trump appointed Elon Musk to run an external government agency called the "Department of Government Efficiency" -- or DOGE for short -- which would focus on slashing wasteful spending to reduce America's national debt.

The DOGE acronym is a clear nod to Musk's favorite cryptocurrency, and once again, investors speculated that he would find new ways to drive value for the meme token. But as I highlighted earlier, there has been no indication that cryptocurrencies will play any role in the DOGE initiative.

Elon Musk steps down to focus on Tesla, SpaceX

In a statement released on Thursday, President Trump said: "Elon will be stepping down from his role as the head of DOGE to focus on his own companies and on creating new technologies that will help to improve the lives of Americans."

The president added that he was grateful for Musk's service and that he looked forward to continuing to work with him in the future.

"I have enjoyed working with Elon over the past year and a half," President Trump said. "He is a brilliant and creative thinker who is passionate about making a difference in the world."

"I am grateful for his service to our country and I look forward to continuing to work with him in the future on issues that are important to both of us, such as space exploration and artificial intelligence."

Musk's appointment to the DOGE agency came after he had expressed support for Dogecoin on social media since 2019 by regularly posting memes and engaging in friendly banter with other enthusiasts. In 2021, investors seemed to interpret his growing support as a ringing endorsement of the meme token's potential, and speculation swirled that he would make some kind of bullish announcement during his appearance on Saturday Night Live (SNL) on May 8 of that year.

Dogecoin peaked at $0.73 on that date, as Musk did nothing more than participate in a comedy skit. Investors quickly realized he didn't have a concrete plan that could actually drive value for the meme token, so it spent the next 12 months plunging. By mid-2022, it had lost more than 90% of its value.

Dogecoin remained dormant for 2023 and most of 2024 but found new life following President Trump's election win. Momentum accelerated when he announced Musk would run the external government agency. However, the token's latest rally stopped well short of its record high from 2021, and it is now trending lower once again.