By Angel Au-Yeung, Eliza Collins and Meridith McGraw

Ryan Kirkley, a Blockchain startup founder, took his friends to a Suitsupply store in Washington, D.C., to buy tuxedos before President Trump's inauguration. Hoodie and ball cap devotees, they had come to the capital unprepared for the black-tie dress code at the Crypto Ball.

At the ball, crypto executives hobnobbed with Donald Trump Jr. and House Speaker Mike Johnson (R., La.) as waiters plied attendees with McDonald's cheeseburgers on silver platters. At 9 p.m. that night, Trump introduced a meme coin. The first lady introduced a coin two days later. The ventures could make the Trumps big beneficiaries of crypto's resurgence.

"Crypto is taking over D.C.," said Erik Finman, a bitcoin investor. "It's a whole new town."

The capital's embrace of the crypto crowd as Trump returned to office marked a reversal of the Biden administration's pursuit of crypto companies over the past two years, after the epic meltdowns of FTX and other crypto companies.

"It felt like the boot had been lifted off our throat," Brian Armstrong, chief executive officer of the crypto exchange Coinbase, told The Wall Street Journal in Davos, Switzerland. Armstrong attended inauguration events including the Crypto Ball, which Coinbase co-sponsored, and a dinner with Vice President JD Vance.

Chris LaCivita, co-manager for Trump's 2024 campaign, and former Arizona Sen. Kyrsten Sinema joined Coinbase's Global Advisory Council in January. "I know you're going to see an administration that is focused on bringing people together to pass crypto legislation," Sinema said. "That was not a priority for the prior administration."

Last month Trump signed an executive order addressing industry priorities including a six-month timeline to create a regulatory framework, easier access to bank accounts and a potential federal cryptocurrency stockpile.

Trump has appointed the tech investor and donor David Sacks to serve in a new role as White House AI and crypto czar.

"It is a very, very different feel here in Washington, " said Sen. Cynthia Lummis (R., Wyo.), an advocate for the industry. At the Crypto Ball, Lummis said, she chatted with the rapper Snoop Dogg and learned that he is working to encourage Black Americans to invest in cryptocurrencies.

"I am following up," Lummis said.

Elites at the recent World Economic Forum in Davos were more welcoming to the crypto crowd. Executives asked crypto insiders how banks can offer digital assets and how crypto affected the U.S. election, said Konstantin Richter, founder of the blockchain company Blockdaemon.

"We get to participate with all the normal people, and I don't get shipped off to the crypto jail, which is where it felt like we all lived in for a bit," he said.

The crypto industry, including venture capitalists and pro-crypto political action committees, donated tens of millions of dollars to congressional candidates who supported their priorities. They poured more than $40 million into the U.S. Senate race in Ohio to boost Republican Bernie Moreno's successful bid to oust Sherrod Brown, a Democrat who chaired the Senate Banking Committee.

Trump, who once called cryptocurrency a scam, met with crypto leaders during his campaign. He took personal interest in the mechanics of digital assets and investors' concerns about energy infrastructure and regulation, Trump advisers said.

Trump was swayed by advice from his 18-year-old son, Barron Trump, who is involved in a family cryptocurrency venture and helped the president boost his appeal among young men.

Since Trump's win on Election Day, the price of bitcoin has surged nearly 50%, reaching above $100,000.

Ether, the largest cryptocurrency after bitcoin, has jumped around 30% since the election. On Inauguration Day, Donald Trump Jr. wrote on X that World Liberty Financial, a crypto project backed by the Trumps, had purchased $47 million of ether and $47 million of a bitcoin derivative that runs on the Ethereum blockchain.

Trump Media & Technology Group on Wednesday said it would invest $250 million into crypto and other investments in kick-starting a company called Truth.Fi to strengthen the "Patriot Economy."

Trump Media is majority-owned by the president.

Trump's meme coin has already earned him billions of dollars on paper. $TRUMP and $MELANIA are a type of cryptocurrency that doesn't serve an economic purpose and whose value is based on the popularity of internet memes. The market cap of the $TRUMP token peaked at $15 billion before falling to $4 billion Saturday afternoon. $MELANIA is worth around $800 million.

Kirkley, the blockchain startup founder, said the meme coins disappointed him because they could make the industry appear unserious. But, he said, even an overly enthusiastic embrace was better than none at all.

"It means that legitimate companies trying to work with banks, trying to tokenize real estate, trying to actually bridge new technologies in the world can stop fleeing to Dubai," he said.

--Amrith Ramkumar contributed to this article.

Write to Eliza Collins at eliza.collins@wsj.com, Angel Au-Yeung at angel.au-yeung@wsj.com and Meridith McGraw at Meridith.McGraw@WSJ.com

(END) Dow Jones Newswires

February 02, 2025 09:00 ET (14:00 GMT)

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