Donald Trump appears to have added something new to his economic policy agenda: Bitcoin (BTC-USD). The former President is embracing the leading crypto as it continues to trend upward. Trump is now pushing for Bitcoin to be “made in the U.S.A” and is making it part of his campaign.
On June 11, he met with executives from several crypto mining companies, including CleanSpark (NASDAQ:CLSK), Riot Platforms (NASDAQ:RIOT) and Marathon Digital (NASDAQ:MARA), three of the country’s largest crypto miners. The list of executives who met with Trump includes CleanSpark chairman Matthew Schultz and Riot’s CEO Jason Les and head of public policy Brian Morgenstern, who has previously worked for both the U.S. Department of Treasury and the White House.
All three crypto stocks are rising today as Trump’s new focus helps spur momentum for the sector. But this begs the question as to why Trump is suddenly embracing crypto. He hasn’t always been a fan of it.
Trump Push Spurs Crypto Stocks
News of the meeting broke after the close of markets yesterday. Today, the momentum has translated into decent gains for crypto stocks across the board while Bitcoin prices rise as well. RIOT is up 8% for the day, while CLSK is up 3%. MARA is also in the green, though only by 3%. This rally follows a post on X from The Bitcoin Conference, which announced Trump’s meeting with executives from these companies, as well as a few others:
Following the event, Trump took to Truth Social to share his take on Bitcoin. In a post encouraging voters to support him, he stated that “Bitcoin mining may be our last line of defense against a CBDC [Central Bank Digital Currency]” He also levied criticism against President Joe Biden and finished the post by stating “We want all the remaining Bitcoin to be MADE IN THE USA!!! It will help us be ENERGY DOMINANT!!!”
Trump’s post has certainly been garnering positive attention across social media as the crypto community rallies behind him. After a volatile month, all three crypto stocks could certainly use the catalyst. But Trump hasn’t always been such a fan of Bitcoin. In fact, in the past, he’s been highly critical of it.
Trump on Bitcoin
Has Trump truly reversed his stance on Bitcoin and on crypto in general?
If so, it would be a complete reversal of his previous anti-crypto stances. In 2021, he told a Fox Business interviewer, “Bitcoin, it just seems like a scam. I don’t like it because it’s another currency competing against the dollar.” In a later interview, he stressed that he liked the currency of the U.S. and added, “I think the others are potentially a disaster waiting to happen.”
Trump’s more recent statement on Bitcoin is also worth examining in context. It seems to overlook the fact that the U.S. is the world’s leading Bitcoin miner, with a collective hash rate of 35.4%. That’s almost twice that of the second leading country, Kazakstan, which ranks second with a hash rate of 18.1%. By that logic, the U.S. is still by far the most dominant nation in the Bitcoin mining space, especially as it accounts for roughly 40% of Bitcoin mining operations across the globe. That has helped crypto mining stocks lately, particularly after China cracked down on crypto mining in 2021, making it illegal.
“ENERGY DOMINANT”
Additionally, although Trump clearly feels strongly about the U.S. becoming “energy dominant,” he doesn’t seem to understand how much energy Bitcoin mining requires. Ensuring that all Bitcoin is mined on American soil would require even more energy at a time when 2% of all U.S. electricity is being consumed by crypto mining. Increasing Bitcoin mining operations would certainly boost crypto stocks, but it would not increase the nation’s energy dominance unless severe changes were made to the national power grid.
The U.S. has also been a net exporter of energy since 2019.
The energy dominance take isn’t the only part of Trump’s pro-Bitcoin stance where the details aren’t adding up. In the post, he doesn’t make clear why the U.S. needs to defend itself against a CBDC, especially as the U.S. Federal Reserve has not opted to transition to one, as it is still conducting research. As Forbes report:
“It is unclear how embracing cryptocurrency would deter the Fed from establishing a digital U.S. currency and it’s possible widespread uptake of cryptocurrencies in the U.S. could even encourage it to move quicker on the issue.”
Trump and Crypto Stocks: What Comes Next
Even as crypto stocks continue to rise, investors should evaluate this news in context. Trump is no stranger to bold statements and making campaign promises that don’t necessarily translate into policy action.
The list of claims he made, especially on the economic policy front during his 2016 presidential campaign, that he did not deliver on is long. Trump promised that he would boost economic growth by 4% each year during his presidency. But by the time he left office in 2020, the economy had stalled amid surging unemployment levels. Under his leadership, the federal deficit ballooned by $7.8 trillion after Trump had claimed he would eliminate it.
Now, Trump is embracing Bitcoin but unintentionally indicating that he doesn’t understand it. If he is reelected, crypto stocks will likely rise as market momentum shifts in their favor. However, unless he is able to act on this area and deliver real policy changes that benefit crypto mining, this growth may be short-lived. Trump is notoriously unpredictable, and his new stance on crypto isn’t necessarily a reason for investors to celebrate.
On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
