Donald Trump's bitcoin obsession

30.07.2024 00:02:56 Yorum Yok Görüntülenme

"If bitcoin is going to the Moon, I want America to be the nation that leads the way."

Channelling his inner JFK, Donald Trump marked his full conversion to the cult of cryptocurrency by vowing to turn the US into a "bitcoin superpower" if he is returned to the White House in November.

Using what The New York Times called the same "rhetoric of persecution" that he has applied to himself and his supporters to appeal to cryptocurrency enthusiasts who want to see less regulation, the Republican presidential nominee told a sell-out conference in Nashville that he would end Joe Biden and Kamala Harris's "anti-crypto crusade".

The speech capped a "complete about-face" by the former president towards "an asset class he considered a crime-riddled scam while he was in office", said Bloomberg. It also marked what is "more and more looking like the merger of a once-outsider political machine with an outsider financial movement that is also punching its way into the mainstream".

Why has he changed his view?

"Conventional wisdom has it that this gambit is simply a classic Trumpian transactional relationship," said Bloomberg.

With November's presidential election likely to go down to the wire, both sides are looking to pick up money and votes wherever they can. But with the Democrats still sceptical of the famously unregulated crypto market, Trump and his team have sensed a wedge issue they can exploit. 

His dramatic U-turn from bitcoin sceptic to one of its most vocal cheerleaders has already won him the backing of influential figures such as Tesla and X owner Elon Musk as well as a growing army of online fans.

Yet something else has also played an important role in Trump's conversion to crypto believer, said Bloomberg: "flattering images of himself". "Simply put, he fell in love with Trump-themed nonfungible-tokens (NFTs) – and the supporters who bought them – and that passion has turned into a broader appreciation for the industry."

What has he promised to do?

Despite previous warnings that bitcoin could undermine the position of the US dollar in the global economy, Trump has now promised a series of measures to deregulate and grow the cryptocurrency market.

He vowed to end efforts by the US government to create a central bank digital currency, an initiative that cryptocurrency enthusiasts have "long been critical of", said the NYT, vowing instead to establish a "bitcoin and crypto presidential advisory council". He said he will order the government to not sell the crypto it has seized in criminal cases and instead use it as the basis for what he called a strategic national bitcoin reserve.

He also announced that on his first day in office he would fire US Securities and Exchange Commission chairman Gary Gensler, who has cracked down on the crypto market after the FTX exchange collapsed in 2022 and its founder, Sam Bankman-Fried, was convicted of fraud. Trump also promised to commute the life sentence of Ross Ulbricht, the mastermind behind the dark web Silk Road marketplace, who has become "something of a martyr" among cryptocurrency enthusiasts, said the NYT.

What impact could this have on the election?

Trump has sought to convey his new-found support for crypto to both working-class voters and in the context of super-power politics, said Quartz. He described bitcoin as "the steel industry of 100 years ago" and warned that if it was not mined, minted and made in the US then it could leave the door open for the likes of China to lead the way.

But while it may seem a canny realignment, there is "political risk" for Trump to be so closely associated with such a notorious asset class, said Bloomberg, "should another FTX-like situation arise – or even a simple downturn in prices that sours sentiment".

There is also a risk for the crypto industry itself to be so ideologically aligned with the Republican Party, said Hilary Allen, a professor at American University's Washington College of Law. "That may prove to alienate some users, given that crypto itself is a pretty ideological thing to invest in," she added. Trump's involvement "may increase appeal among Republican users, but it may alienate Democrat users".

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