When the FTX cryptocurrency exchange collapsed in 2022, triggering chaos across digital-asset markets, Washington largely stood aside. The Biden administration viewed cryptocurrencies with skepticism, and regulators were careful to keep the volatile sector at arm’s length from the traditional financial system. Crypto failures, at that time, were not considered a problem for the White House.
Heading into 2026, that stance looks set to change dramatically.
Donald Trump and his family now have deep financial and political ties to the crypto industry. At the same time, digital assets have become more intertwined with the broader financial system, particularly through stablecoins that rely heavily on U.S. government debt. If another crisis on the scale of FTX were to erupt, it would be far harder for the U.S. government to ignore—and far more likely for the president to intervene.
Since Trump’s return to power after the 2024 election, the crypto sector has flourished. The combined value of major digital tokens such as bitcoin and ether surged by roughly $1.2 trillion in the following year. The administration has openly supported the industry and pushed legislation that gave clearer legal status to dollar-backed stablecoins. Trump-affiliated businesses have also benefited directly, with crypto ventures reportedly generating hundreds of millions of dollars in income in early 2025 alone. If markets were to slide sharply, Trump and those close to him would have strong incentives to act.
Several scenarios could force government involvement. The most serious would be a loss of confidence in a major stablecoin such as Tether’s USDT, which has an issuance measured in the hundreds of billions of dollars. These tokens are designed to maintain a one-to-one value with the U.S. dollar and are backed by reserves that include short-term Treasury debt and other assets. However, reserve buffers are limited. Even a modest decline in asset values could leave the stablecoin undercollateralized, raising doubts about whether every digital dollar could truly be redeemed.
Past events show how fragile this structure can be. In 2023, another stablecoin briefly lost its dollar peg after a bank holding part of its reserves collapsed. In Tether’s case, some reserves are tied to assets like bitcoin and precious metals, which can be highly volatile. In a severe market downturn, those holdings could quickly lose value.
If investors rushed to exit a major stablecoin, the consequences would ripple across the entire crypto ecosystem. Many digital-asset trades are priced against USDT, so a loss of confidence could freeze trading activity. Worse still, mass redemptions might force the issuer to sell large amounts of U.S. Treasuries, potentially disrupting one of the world’s most important financial markets. That alone would be enough to draw the attention of the U.S. government, regardless of any pro-crypto bias.
Another trigger could be the collapse of a major crypto exchange. Unlike traditional stock exchanges, large crypto platforms often combine trading, custody, lending, and investment products under one roof—sometimes while also trading on their own accounts. This structure creates conflicts of interest and raises the risk that problems in one area spill rapidly into others. A major hack, trading loss, or loan default could cripple a leading exchange and disrupt essential market services.
The stakes are amplified by how concentrated the industry has become. A small handful of centralized exchanges now handle the vast majority of global crypto trading. The failure of just one of these giants could have severe, potentially catastrophic consequences for the entire market.
Taken together, these factors suggest that by 2026, crypto may be too politically connected and too financially entangled to fail quietly. If a major shock hits, a U.S. government rescue—once unthinkable—may become a very real possibility.
