DDonald Trump, who once denounced cryptocurrencies as a “destined disaster” and said Bitcoin was a “scam,” has now vowed to build a “crypto army.”
On Tuesday, the Trump campaign announced that it would be accepting donations in cryptocurrencies, including Bitcoin, Ether, and Dogecoin. Many crypto enthusiasts on social media welcomed the announcement, arguing it was proof that cryptocurrencies will be a key issue in the upcoming election. But others said it simply smacks of opportunism.
The following are the factors that will change Mr. Trump's attitude regarding virtual currencies.
Are cryptocurrencies left or right?
When cryptocurrencies entered mainstream consciousness three years ago, their supporters came from both sides of the political spectrum. Many cryptocurrency fans had liberal tendencies. For example, Minnesota Republican Tom Emmer said virtual currencies are a boon to market freedom and privacy. In contrast, some Democrats, including Cory Booker, have argued how cryptocurrencies can be a “democratizing” force, leading to increased financial access for people long excluded from traditional banking. He emphasized that it is possible.
For a while, the potential alignment between crypto and progressive ideals was boosted by the success of FTX founder Sam Bankman-Fried, who became one of the top individual donors to Democratic candidates in the 2022 election cycle, preaching “financial inclusion and fair access.” But in reality, Bankman-Fried was secretly donating to both parties with the ultimate goal of putting pro-crypto candidates in office. After FTX went under, some of the Democratic politicians Bankman-Fried supported distanced themselves from the industry.
read more: Shocking evidence that led to Sam Bankman Freed's conviction
At the same time, several prominent Democratic politicians have gone to war over cryptocurrencies, arguing that they are predatory and pose a huge risk to the American economy. Elizabeth Warren vows to build an “anti-crypto army,” while Biden-appointed Securities and Exchange Commission Chairman Gary Gensler will use his position to prosecute bad actors and disrupt the crypto industry in states. was suppressed.
Warren and Gensler's anti-crypto campaign has angered many crypto enthusiasts who see them as a threat to the industry. In contrast, pro-crypto right-wing candidates, including Vivek Ramaswamy, have found friendly audiences at crypto conferences.
Given this larger context, endorsing crypto could put Trump in direct opposition to Warren and galvanize support from an industry that skews young and male. The Trump campaign made this overly clear in a statement on Tuesday, claiming that accepting Bitcoin donations is part of its opposition to “socialist government control” of U.S. financial markets. “As Biden imposes regulations and red tape on all of us, President Trump is ready to embrace new technologies,” the statement read.
The changed landscape of cryptocurrencies
President Trump is not the only politician to soften his opposition to cryptocurrencies. Last week, many Democrats, including Chuck Schumer, broke with Warren and Gensler to reject the SEC's efforts to make it harder for banks to own digital assets. Their decision was another big loss for Mr. Gensler. Last summer, his efforts to block the creation of Bitcoin ETFs, a type of investment vehicle aimed at mainstream institutional investors, were rejected by a federal judge. Since this decision, Bitcoin ETF trading volume has exceeded hundreds of billions of dollars, and a similar ETF for the cryptocurrency Ether appears poised to be approved.
This week, the House of Representatives will vote on the Republican-led cryptocurrency promotion bill, the 21st Century Financial Innovation and Technology Act. A few Democratic lawmakers have expressed support for the bill. The White House opposes the bill, but said in his statement that it is eager to work with Congress on legislation to promote “the responsible development of digital assets and payments innovation” in the United States. Ta.
However, the path this bill will take to pass the Senate is unclear. And many ordinary Americans are wary of virtual currencies. Three-quarters of respondents to a 2023 Pew survey said they were not confident that current methods of trading cryptocurrencies are reliable or secure.
economic impact
There are political reasons for President Trump to embrace Bitcoin, but there are also strong economic incentives. Trump made between $100,000 and $1 million in 2022 selling NFT trading cards. He also owns over $1 million worth of Ethereum, which could increase in value based on his support for the industry. And meme coins, the virtual currency created by his fans, including the MAGA token, have soared in recent weeks, with investors buying in as a kind of proxy for support for his campaign. Trump himself was gifted a trove of tokens, currently worth more than $4 million.
If Trump welcomes cryptocurrencies, he could also receive lobbying funds. A crypto super PAC is poised to spend more than $80 million to influence the 2024 election.
But while some crypto enthusiasts have welcomed Trump, others have reacted with more caution. “Trump has not shown any real commitment to cryptocurrencies,” said David Hoffman, co-host of the Cryptocurrency Podcast. No bank“So far we have been nothing but milking cows to him,” he wrote on Twitter.
Andrew R. Chow's Book on Cryptography, cryptomaniawas published in August, Pre-order available.
