Trump’s big cryptocurrency bet

Former President Donald Trump, who once called bitcoin “a scam,” is now pitching himself as the pro-crypto presidential candidate. “You’re going to be very happy with me,” Trump said at the Bitcoin 2024 conference in Nashville, Tennessee, on Saturday. 

“If crypto is going to define the future, I want [it] to be mined, minted and made in the USA,” he told a room full of bitcoin enthusiasts. “If bitcoin is going to the moon … I want America to be the nation that leads the way.” 

Trump used his keynote address at the conference to announce that if elected, “it will be the policy of my administration, the United States of America, to keep 100% of all the bitcoin the U.S. government currently holds or acquires into the future.” 

The speech was an about-face for Trump, who tweeted in 2019 that cryptocurrency “is highly volatile and based on thin air. Unregulated Crypto Assets can facilitate unlawful behavior, including drug trade and other illegal activity….” 

But in the past two years, Trump has bought and sold millions of dollars in digital assets. 

Trump’s jump into cryptocurrency

The former president’s courting of the cryptocurrency industry is the latest step in his post-term pivot on digital assets. 

Over the last two years, he appears to have made a substantial amount of money buying and selling them. He sold NFTs featuring cartoon pictures of himself in various costumes – muscled superhero outfits, on the moon, in an all-leather rock n’ roll getup – personally earning between $100,001 and $1 million in income from them, according to his 2022 financial disclosure form.

In May, Trump became the first major-party presidential candidate to accept crypto donations. The Wall Street Journal recently reported he had raised about $3 million via 100 cryptocurrency donations through the end of June. 

He also appears to own a cryptocurrency portfolio worth nearly $8 million as of July 29, based on research from the blockchain data tracking group Arkham Intelligence. Of that, $3 million is in TrumpCoin, a Trump-branded digital token described on Crypto.com as “supporting the Trump administration and its conservative followers and Patriots.” 

Trump even announced a limited edition run of “Trump Crypto President” Bitcoin-branded sneakers, just days after the Bitcoin Conference. High tops in the color “Bitcoin Orange,” priced at $499, quickly sold out.

JD Vance and the play for Silicon Valley’s investors

Trump shored up his connection to the tech industry — and their money — by picking JD Vance as his vice presidential nominee. Vance has deep ties in Silicon Valley which have already paid dividends. He formerly worked for billionaire investor Peter Thiel, who donated $15 million to Vance’s 2022 campaign for Ohio’s Senate seat. 

In June of this year, one month before Vance was announced as the VP pick, he helped organize a $12 million fundraiser for Trump, attended by mega-donors in the tech space. Venture capitalist Chamath Paldihapitiya, an early senior executive at Facebook, was there, as was David Sacks, a member of the so-called PayPal Mafia, which also includes Thiel and Elon Musk. 

America PAC, a Trump-supporting political fundraising group, has also been flooded with money from Silicon Valley leaders like Palantir co-founder Joe Lonsdale, Douglas Leone of Sequoia Capital, and crypto billionaires Cameron and Tyler Winkelvoss. On July 15, The Wall Street Journal reported that Elon Musk promised to donate $45 million per month to the super PAC, but Musk has since disputed that claim. 

Investors indicate they are donating to Trump based on their belief his presidency would result in looser regulation and much higher growth for their assets, according to a recent survey by AMBCrypto. That survey showed 80% out of nearly 10,000 investors said they believed bitcoin would hit an $80,000 valuation if Trump wins the presidency. As of July 31, a bitcoin is worth nearly $66,500. 

“It’s becoming an interest group,” said Alex Gladstein, coauthor of “The Little Bitcoin Book: Why Bitcoin Matters for Your Freedom, Finances, and Future” and one of Bitcoin 2024’s speakers. “You have the agricultural lobby, you’ve got the Israel lobby, you’ve got the oil lobby, you’re going to have the bitcoin lobby. Welcome to the future.” 

Trump’s crypto promises

Trump made big promises for his potential future administration during his keynote speech at the Bitcoin 2024 conference. He told the crowd he would establish a crypto and bitcoin presidential advisory council and pledged to make America a “bitcoin mining powerhouse.” 

Trump also said he’d create a “strategic bitcoin stockpile,” which would be filled with some of the reportedly $5 billion worth of bitcoin the U.S. government is currently sitting on. The government acquired it through legal seizures from hackers and users of Silk Road, a black market on the dark web that sold everything from jewelry and books to hard drugs and pornography. 

“I’m laying out my plan to ensure that the United States will be the crypto capital of the planet and the bitcoin superpower of the world,” Trump said to applause.

The former president received a standing ovation when he promised to fire Gary Gensler, chair of the U.S. Securities and Exchange Commission, with a fervor that surprised even Trump. 

“On Day One, I will fire Gary Gensler and appoint a new SEC chairman,” Trump told the crowd. “I didn’t know he was that unpopular. Well, I— wow, I didn’t know he was that unpopular. Let me say it again. On Day One, I will fire Gary Gensler!”  

Gensler has argued that trading digital assets should be held to the same rules and standards as stock and bond trading, which crypto fans vehemently oppose. 

“The crypto industry’s record of failures, frauds, and bankruptcies is not because we don’t have rules or because the rules are unclear,” Gensler wrote in a May letter to Congress. “It’s because many players in the crypto industry don’t play by the rules.”

“Crypto people don’t like Gensler,” Gladstein said. “I don’t think he likes all these people printing free money and then not paying taxes or not being subject to regulation.” 

Crypto investor Adam Patterson, who also goes by the name Loudmouth, said Trump’s comments on Gensler struck a nerve, “because he knew that is something that really irritates and has really lagged the crypto community. [Gensler] was teaching bitcoin back at MIT, and then it’s like he became the number one combative source against it.” 

It is unclear based on previous court cases whether a future President Trump would legally be permitted to remove Gensler from his position. Gensler’s current five-year term ends in 2026. 

When Trump promised to commute the life sentence of Ross Ulbricht, the founder of Silk Road and an icon in the bitcoin community, the crowd began loudly chanting: “Free Ross! Free Ross! Free Ross!” 

Silk Road was the first major marketplace to use a bitcoin-based payment system. The Justice Department said the website was “used by thousands of drug dealers and other unlawful vendors to distribute hundreds of kilograms of illegal drugs and other unlawful goods and services to more than 100,000 buyers, and to launder hundreds of millions of dollars deriving from these unlawful transactions.” But his conviction on charges of narcotics trafficking, engaging in a continuing criminal enterprise, conspiring to commit computer hacking and conspiring to commit money laundering have turned him into a crypto-martyr to some.

Many of the event’s attendees wore black T-shirts with white letters that read: “Free Ross Day One.”

Trump has embraced crypto, but has all of crypto embraced Trump? 

While Trump appears to be saying all the right things for the crypto industry, some investors still sound cautious. 

The price of bitcoin dipped slightly while Trump was on stage Saturday but, following his speech, it rose to a near record-high, surpassing $70,000. By Tuesday, though, it had dropped more than 4%. That drop, according to crypto trackers, might have been because the U.S. government’s transfer of over $2 billion of bitcoin, which appear to be from the Silk Road seizures, to a new wallet.

“For most people this is our number one source of income,” said Leslie Motta, chief operating officer of Gokhshtein Media, who attended Bitcoin 2024. “We want politicians, we want people to tap into this realm that we’re in and continue to build it and expand it. I think he [Trump] resonates in that way because, you know, he’s strong.”

Major crypto donors seem to agree. The gold mask-wearing “Shibtoshi,” an anonymous crypto billionaire and the CEO and founder of SquidGrow, was ushered by the Secret Service into the front row of the conference right before Trump’s keynote.

“Because of who I am in the space … the money that I’m known to possess, I feel that I need to protect my identity to protect my family,” he told CBS from behind his geometric gold mask. “Crypto is still the wild wild west.”

While Shbitoshi may have been cautious about his identity, he was fully transparent about his reaction to Trump. 

“I love every word that he had to say,” he said. “When it comes to cryptocurrency, I mean everything that he was saying, as far as bringing crypto mining back here, freeing Ross. I mean that all resonates with me and everyone else in the space. He’s a businessman. He understands that bitcoin and other cryptocurrencies are a business, and it could be very lucrative to the United States if they are involved in it, maybe adopt it as a currency. There are ways that we can bring liquidity back to the United States, instead of losing liquidity to foreign nations.”

Others admitted that after hearing his speech, they were left with some hesitation about the promises Trump laid out. 

Julie Kennis, who hosts an NFTs podcast and works with Motta at Gokhshtein Media, said she liked Trump’s clear policy for easing regulations on the crypto industry but expressed ambivalence about his more “racially charged” comments. For example, during his speech Trump was dismissive about his grandchild speaking Chinese and mocked Elizabeth Warren for claiming Native American heritage, something he’s done many times before. Kennis called the statements “completely wrong.”

“I would love to hear [Vice President Kamala Harris’s] policy because I feel like crypto should have bipartisan support. It’s a huge industry, it’s a growing industry and people are working really hard to create fantastic businesses and ways to create wealth,” said Kennis, who voted for Trump in the last two elections.

Harris has yet to make a definitive statement on cryptocurrency in her role as the presumptive Democratic presidential nominee. Some believe she would continue Biden-era policies of crackdowns and increased regulation. However, even the Biden administration seems to be more open to discussions with the industry — in July, senior Biden adviser Anita Dunn met with crypto leaders in a meeting that was called “productive.”

While it remains to be seen whether Trump will get the crypto vote in November, he’s raking in their money now. A cryptocurrency fundraiser held after Trump’s speech in Nashville is said to have raised $25 million, according to David Bailey, who organized the Bitcoin conference and is the CEO of BTC Inc. 

“I think the big picture here is the increasing normalization of bitcoin in the world, on Wall Street, in Washington, at home,” said Gladstein. “It’s no longer some niche thing on the internet.”