bitcoin fans bet on Donald Trump to change fortunes

Donald Trump promised thousands of bitcoin enthusiasts at the weekend that as president he would make America “the bitcoin superpower of the world”, winning him widespread support within a market resentful of regulatory scrutiny.

“My job will be to set you free,” said Trump.

With an enthusiastically pro-crypto speech on Saturday, the former president sought to deepen his ties to an industry fed up with its perceived persecution at the hands of the Biden administration and prepared to spend heavily to secure a more crypto-friendly audience in Washington.

Trump’s comments at the annual bitcoin conference in Nashville — a first for a major party presidential candidate — marked an about-turn for a man who only three years ago derided bitcoin as a “scam” that was a threat to the US dollar.

The feelgood factor helped push bitcoin to a six-week high on Monday, briefly touching $70,000 and just shy of its record high of just over $73,000.

“I think he’s going to be the first crypto president,” venture capitalist Shervin Pishevar told the FT.

Crypto’s embrace of Trump comes as it tries to throw off the dark cloud cast by FTX founder Sam Bankman-Fried, who was sent this year to jail for 25 years for fraud, and a crackdown by US regulators.

Industry executives lament the US government’s aggressive approach on companies such as Coinbase, and failure to pass regulation, arguing that it risks stifling innovation and pushing American companies offshore.

Crypto had faced “a brutal assault” under Biden and Gary Gensler, chair of the Securities and Exchange Commission, said Marc Andreessen, co-founder of venture capital firm Andreessen Horowitz, which bills itself as the world’s largest crypto investor, having raised about $8bn to target the sector. “It’s been intensely frustrating and impossible to make progress on this with the White House,” he added.

By contrast, Trump’s position is “a flat-out, blanket endorsement of the entire space. A complete, across the board, uniform embrace of the entire thing”, he said. “It’s an absolute 180 from what we’ve been experiencing.”

Trump’s appearance in Nashville stood in stark contrast to Kamala Harris, who had been in late discussions to speak but decided against it. The biggest names and companies in digital assets are willing to throw their weight behind Trump’s campaign.

Last month Pishevar co-hosted a fundraiser for Trump in Silicon Valley at investor David Sacks’ home, along with Coinbase executives and Tyler and Cameron Winklevoss, founders of exchange Gemini, who have each donated $1mn in bitcoin to his campaign. Jesse Powell, the co-founder of crypto exchange Kraken, said he donated $1mn mostly in ether.

Other Trump mega donors — Cantor Fitzgerald chief executive Howard Lutnick — joined attendees in Nashville alongside supporters wearing red “Make Bitcoin Great Again” hats. Outside, a Tesla Cybertruck promoting Bitcoin circled the Nashville conference, sharing a road filled with bachelorette party buses, tractors and pedal taverns.

Trump’s speech on Saturday was sprinkled with promises for the US crypto industry, from calling them “modern day Edisons” to commute the sentence of Ross Ulbricht, who is in life imprisonment for creating the online black market Silk Road.

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He drew the biggest applause for promising to fire the industry’s bogeyman, — the SEC’s Gary Gensler — who has been an ardent critic of crypto.

Under Gensler’s tenure the agency has filed has filed lawsuits against the biggest exchanges, including Binance, Coinbase, Kraken and Gemini, as well as payments provider Ripple Labs and blockchain software company Consensys, among others, accusing them of securities laws violations. Trump was so surprised by the audience’s raucous roar that he repeated his vow.

He also pledged to end the “repression” on Saturday, saying rules should be “written by people who love your industry, not by people who hate your industry”.

Conference attendees were particularly impressed with Trump’s promise to create a “strategic national bitcoin stockpile” by never selling the roughly 210,000 bitcoins that have been confiscated by the federal government.

“I think he definitely earned some votes,” said Fred Thiel, chief executive of crypto miner Marathon Digital Holdings, after meeting Trump.

The Trump campaign’s embrace of crypto has been under way for several months; he has been accepting payment in crypto and said his campaign had received more than $25mn in crypto donations. His vice-presidential pick, JD Vance, owned up to $250,000 in Bitcoin, according to his 2022 financial disclosure form, earning the Republican campaign further plaudits from executives.

The market has also become more politically astute with its money since the days when Bankman-Fried backed individual politicians. Pro-crypto group Fairshake has become one of the biggest super Pacs so far this year, raising nearly $203mn, according to filings. The group is backed by Coinbase, Ripple and Andreessen Horowitz, among others, but has no plans to play in the presidential campaign.

“It’s clear [Trump’s] long thought about keeping American industry here. Whether that’s protectionism or keeping things onshore, I suspect that’s the underlying principle,” said a senior US crypto exchange executive.

In a sign of Democrats’ concern about the scale of crypto support behind Trump, Kamala Harris’ advisers have in recent days sought to “reset” relations between the party and the industry, by contacting people at companies including Coinbase and Ripple, the FT reported.

But not everyone is convinced by Trump’s commitment to crypto.

Vitalik Buterin, co-founder of Ethereum, criticised the market’s self-interested backing of Trump. Boosting pro-crypto candidates means “politicians come to understand that all they need to get your support is to support ‘crypto’,” he wrote in a recent blog post.

Others are critical of the self-serving relationship between Trump and the crypto industry.

“Trump’s opinions can be bought as we have seen,” said Vinod Khosla, founder of Khosla Ventures, adding that executives were clearly contributing to his campaign in order to achieve less onerous regulation, so they could make more money.

Trump’s campaign “is certainly very savvy when it comes to knowing where the bread is buttered and knowing which constituents might be helpful”, said Sheila Warren, chief executive of the Crypto Council for Innovation.

“Running for president and being president are very different things . . . what he would actually do when in office is a different question.”

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