Donald Trump once said bitcoin is based on "thin air." Now, he wants to make the US the industry's leader.
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At a campaign fundraising event in June, former president Donald Trump styled himself as something that would have seemed unlikely not long ago.
"He said he would be the crypto president," tech executive Trevor Traina, who attended the fundraiser, told Reuters that month.
It's not a title the Republican candidate would have donned as eagerly during his first term.
In a series of tweets in 2019, then-President Trump made it clear that he had no love for crypto.
"I am not a fan of Bitcoin and other Cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air."
I am not a fan of Bitcoin and other Cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air. Unregulated Crypto Assets can facilitate unlawful behavior, including drug trade and other illegal activity....
— Donald J. Trump (@realDonaldTrump) July 12, 2019
He stuck to this view until at least 2021, telling Fox Business that bitcoin "seems like a scam." When making these points, Trump often reiterated that the industry needs strict regulation.
Yet, with the 2024 election looming, Trump's stance has flipped almost completely.
After telling CNBC earlier this year that he was no longer certain about taking crypto away, by May, he declared that the US should be the industry's global leader in the space.
"Crooked Joe Biden, on the other hand, the worst president in the history of our country, wants it to die a slow and painful death," he wrote in a post on Truth Social.
The comparison to his Democratic rival may be emblematic of one reason crypto has become such a hot election issue — and a heightened focus for both parties.
"By all accounts, it's expected to be a very tight election," Alan Konevsky, tZERO's chief legal officer, told Business Insider: "Where there's fierce competition for campaign cash, and where crypto and the crypto lobby has shown itself to be an important force from that perspective as well."
The numbers back the point. According to a May report from Public Citizen, the cryptocurrency sector is becoming a titan of political funding that's hard to ignore. Through the 2024 election cycle, crypto-backed super PACs raised over $102 million, the third-most among all super PACs.
Trump's pledges to support US crypto miners or loosen regulatory overhangs are granting him access to fresh funds from the industry. For instance, one crypto executive told CNBC the space was now committed to donating $100 million to his campaign.
"As an industry we are committed to raising over $100 million and turning out more than 5,000,000 voters for the Trump reelection effort," BTC Inc. CEO David Bailey said.
On the other hand, crypto's rise in the electoral contest also stems from how important the topic has become to the American public, something that may have been underestimated before, Konevsky noted.
For instance, about half of young voters surveyed by Grayscale said they will consider a candidate's crypto position before voting.
The increasingly bipartisan nature of crypto is also influencing President Biden's platform. He, too, has opened to crypto donations, and his administration has adjusted regulators' approach to the industry.
The growing political embrace of crypto means that it might not matter who wins in the long run, billionaire crypto bull Michael Novogratz said. Pro-industry efforts are also being pushed by Congress, such as the Financial Innovation and Technology bill.
But for the near-term, the market appears more confident in Trump to help the sector.
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, Konevsky noted. Aside from questions of who leads market watchdogs like the Securities and Exchange Commission, crypto lawsuits have placed judges front-and-center as the decision-makers on questions related to the market.
