The Cryptocurrency Industry Goes Trump

• Donald Trump was the keynote speaker at the world’s largest Bitcoin conference, promising to support the crypto industry

• Kamala Harris declined to attend the event, though her campaign is seeking the crypto sector's donations

• Crypto has been supporting Republicans due to their supporting reduced regulations on the sector, in contrast to President Biden and the Democrats

The story

Former President Donald Trump and Independent presidential candidate RFK Jr. recently attended the world’s largest annual Bitcoin gathering in Nashville. So far this election cycle, pro-crypto super PACs have raised over $100 million, funneling that money into candidates who pledge to expand the influence of cryptocurrency and oppose heavy regulation.

During his address as the Bitcoin 2024 keynote speaker, Trump made several promises to the crypto fanatics in attendance, such as, “The United States will be the crypto capital of the planet and the Bitcoin superpower of the World.”

And while he stopped short of promising to found a Bitcoin strategic reserve, as was championed by Sen. Cynthia Lummis (R-WY), Trump promised to keep “100 percent of all the Bitcoin the U.S. government currently holds.”

The U.S. government holds a substantial amount of Bitcoin, primarily acquired through criminal seizures and legal forfeitures, though it frequently sells these assets at auction. Many Bitcoin holders want the US to retain its Bitcoin holdings, as this would help increase its value.

As cryptocurrencies gain popularity in the US and globally, the extremely lucrative crypto industry is funding candidates across the political spectrum. However, the sector's major players are overwhelmingly favoring the GOP due to their openness to expanding the industry and opposing the Biden administration's regulatory efforts.

The politics

RFK Jr. went further than any other major politician at the conference, stating that if elected, he would issue an executive order making all Bitcoin to USD transactions non-reportable and tax-free. Kennedy, who is much more favorable to using cryptocurrencies as a mainstream use of financial exchange, also favored the idea of the Federal Reserve purchasing $4 million in Bitcoin.

And while Democratic presidential nominee Kamala Harris declined to attend the event in Nashville, her campaign has been reaching out to major cryptocurrency entities, possibly signaling her willingness to buck her party’s more skeptical view of the sector. Despite crypto’s complex reputation among the American public, the industry is awash with cash, attracting major political players who are vying for their support.

Some Democrats are pushing Harris to adopt a more supportive stance toward cryptocurrencies, which have faced stringent enforcement from the Biden administration. Crypto advocates argue the Democratic Party should harness the technology’s potential instead of letting Trump, who is attracting crypto enthusiasts and massive donations from industry leaders, dominate the issue.

Kamala Harris's adoption of such a move would risk alienating crypto-skeptics like Sen. Elizabeth Warren (D-MA), who views digital currencies as a threat to consumers and financial stability.

Republicans have steadily adopted pro-cryptocurrency stances, including the GOP-controlled House of Representatives voting to prevent the Federal Reserve from creating their own Central Bank Digital Currency (CBDC). Donald Trump has been vocally opposed to the creation of CBDCs, while President Biden issued a 2022 executive order paving the way for their creation.

Beyond the headlines

A lesser-known reason many on the left oppose cryptocurrencies is that the effort to “mine” these currencies uses huge amounts of energy. Crypto mining operations, which utilize entire warehouses running 24/7, have significantly increased local electricity demand. This spike in power usage has strained local grids and raised electricity bills for residents.

During the cryptocurrency conference in Nashville, Donald Trump aggressively advocated for supplying crypto-miners with as much power as they need. In overtly Trumpian fashion, the former president proclaimed, “We will be creating so much electricity that you'll be saying, Please, please … We can't stand it. You'll be begging me, no more electricity, sir, we have enough.”

Trump has successfully aligned himself to be the pro-crypto candidate in the 2024 election, having already secured the endorsements of numerous tech billionaires, including David Sacks and the Winklevoss twins. However, the crypto industry is seeking to gain the favor not only of the president but, perhaps more importantly, of Congress.

Over $60 million has flooded Capitol Hill since 2021, with tech leaders trying to advance legislation that would shift industry oversight from the Securities and Exchange Commission to the more pro-crypto — and less well-funded — Commodity Futures Trading Commission. Ripple, Coinbase, and several other crypto-lobbying groups collaborated with House Republicans to push for that legislation.

Donald Trump winning the support of cryptocurrency groups is a significant victory for both the industry and Congressional Republicans. This alliance allows down-ballot Republicans to align with Trump's vision and benefit from the crypto sector’s massive donations.

Why it matters

The cryptocurrency sector plans to spend upwards of $160 million on this year’s elections, placing pro-crypto politicians in Congress while unseating their critics. With the influx of donations flowing to Republicans, House Democrats are now pushing to make the party more receptive to cryptocurrencies.

Just last weekend, Rep. Ritchie Torres (D-NY) and over one dozen House Democrats sent a letter to the Democratic National Committee chair, urging the party to adopt pro-crypto policies in its platform. They argue that with Biden stepping down, there's a prime opportunity to align with the growing crypto movement and attract significant financial support.

Although the cryptocurrency sector lobbies Washington with a fraction of the amount of cash as larger industries like pharmaceuticals, they are part of the larger tech sector, which wields great power in American politics. While the crypto industry is backing Donald Trump, Kamala Harris continues to receive support from high-ranking executives at major companies like Facebook, Salesforce, and Apple.