How Trump Became the ‘Crypto President’

Former President Donald Trump has undergone a significant transformation from a bitcoin skeptic to a vocal supporter of the cryptocurrency industry. This shift in stance has made bitcoin a “Trump trade,” according to Bernstein.

A Change of Heart

In 2019, Trump expressed his disdain for cryptocurrencies, stating that they are not money and have highly volatile values based on thin air. He reiterated this view until at least 2021, calling bitcoin a “scam.” However, with the 2024 election looming, Trump’s stance has flipped almost completely.

Trump speaking at a campaign event

In May, Trump declared that the US should be the global leader in the cryptocurrency space, a stark contrast to his previous views. This change in heart is likely due to the growing importance of crypto in the electoral contest.

The Rise of Crypto in Politics

Political spending by the cryptocurrency industry has made it an election issue for both parties. According to a May report from Public Citizen, crypto-backed super PACs have raised over $102 million, the third-most among all super PACs. This influx of funds has granted Trump access to fresh campaign donations, with one crypto executive pledging to donate $100 million to his campaign.

Crypto donations

The growing bipartisan nature of crypto is also influencing President Biden’s platform. He, too, has opened up to crypto donations, and his administration has adjusted regulators’ approach to the industry.

The Future of Crypto

The increasing political embrace of crypto means that it might not matter who wins in the long run. Pro-industry efforts are being pushed by Congress, such as the Financial Innovation and Technology bill. However, for the near-term, the market appears more confident in Trump to help the sector.

Bitcoin rising

In late June, Bernstein highlighted that if Republicans look more likely to win November’s election, Trump’s promises of better regulation will help bitcoin rise through the fourth quarter.

“If the election sentiment shifts more Republican, crypto would end up as the primary ‘Trump trade’ and hopes of a favorable regulatory regime would change the ‘use-case’ narrative around blockchains such as ETH,” analysts wrote.

It’s also important to watch how regulatory and court appointees may change under a different administration.