Trump’s Big Bet on Cryptocurrencies – CBS News

Former President Donald Trump, who once called bitcoin a “fraud,” is now positioning himself as a 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 mined, created and manufactured in the United States,” he told a room full of bitcoin enthusiasts. “If bitcoin is going to go to the moon… I want America to be the country that defines that.”

Trump used his inaugural speech at the conference to announce that if elected, “it will be the policy of my administration, the United States of America, to retain 100% of all bitcoin that the U.S. government currently owns or acquires in the future.”

The speech was a 180-degree turn for Trump, who tweeted in 2019 that cryptocurrency “is highly volatile and based on thin air. Unregulated crypto assets can facilitate illegal behavior, including drug trafficking and other illegal activities…”

However, over the past two years, Trump has bought and sold millions of dollars worth of digital assets.

Trump’s leap into cryptocurrency

The former president’s interest in the cryptocurrency industry is the latest step in his post-war shift in attitude towards digital assets.

Over the past two years, he seems to have made a considerable amount of money buying and selling them. He sold NFTs showing off comic-book photos of himself in various costumes — muscle-bound superhero outfits, on the moon, in a leather rock ‘n’ roll outfit — and personally earning between $100,001 and $1 million from them, according to his 2022 financial disclosure form.

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

He also appears to have a cryptocurrency wallet worth nearly $8 million as of July 29, based on research from 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 and Patriot supporters.”

Trump even announced a limited-edition Bitcoin-branded “Trump Crypto President” sneaker just days after the Bitcoin conference. The $499 “Bitcoin Orange” high-top quickly sold out.

JD Vance and the Game for Silicon Valley Investors

Trump has solidified his ties to the tech industry — and its money — by selecting J.D. Vance as his running mate. Vance has deep connections in Silicon Valley that have already paid dividends. He previously worked for the billionaire investor Peter Thiel, who donated $15 million for Vance’s 2022 campaign for Ohio State Senator.

In June of this year, a month before Vance was announced as the vice presidential candidate, he helped organize Fundraising for $12 million for Trump, which was attended by tech mega-donors. Venture capitalist Chamath Paldihapitiya, one of Facebook’s first chief executives, was in attendance, as was David Sacks, a member of the so-called PayPal Mafia that also includes Thiel and Elon Musk.

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

Investors indicate they are donating to Trump because they believe his presidency will lead to looser regulation and significantly greater growth in their holdings, according to a recent study by AMBCrypto. The study found that 80% of nearly 10,000 investors said they believe bitcoin will reach a valuation of $80,000 if Trump wins the presidential election. As of July 31, bitcoin is worth nearly $66,500.

“It’s becoming a special interest group,” said Alex Gladstein, co-author of “The Little Bitcoin Book: Why Bitcoin Matters for Your Freedom, Finances, and Future” and one of the speakers at Bitcoin 2024. “You’ve got the farm 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 opening speech at the Bitcoin 2024 conference. He told the crowd he would establish a presidential advisory council on cryptocurrencies and bitcoin and promised to make America a “bitcoin mining powerhouse.”

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

“I am unveiling 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 U.S. Securities and Exchange Commission Chairman Gary Gensler, and he did so with a zeal that surprised even Trump.

“On day one, I’m going to fire Gary Gensler and appoint a new chairman of the SEC,” Trump told the crowd. “I didn’t know he was that unpopular. Well, I… wow, I didn’t know he was that unpopular. I’ll say it again. On day one, I’m going to fire Gary Gensler!”

Gensler argues that digital asset trading should be subject to the same rules and standards as stock and bond trading, something that cryptocurrency advocates strongly oppose.

“The cryptocurrency industry’s record of failures, fraud, and bankruptcies is not due to a lack of rules or unclear rules,” Gensler wrote in a May letter to Congress. “It is because many players in the cryptocurrency industry do not play by the rules.”

“The cryptocurrency people don’t like Gensler,” Gladstein said. “I don’t think he likes the fact that all these people are printing free money and then not paying taxes or being regulated.”

Cryptocurrency investor Adam Patterson, who also goes by the pseudonym Loudmouth, said Trump’s comments about Gensler hit a nerve “because he knew this was something that was really irritating and really out of step with the cryptocurrency community. (Gensler) taught bitcoin at MIT and then he became a major source of the fight against it.”

It is unclear based on previous court cases whether an incoming President Trump would be legally able to remove Gensler from office. 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 to loudly chant, “Free Ross! Free Ross! Free Ross!”

Silk Road was the first major marketplace to use a bitcoin-based payment system. The Justice Department found that the website was “used by thousands of drug dealers and other illicit sellers to distribute hundreds of kilograms of illegal narcotics and other illegal goods and services to more than 100,000 buyers and to launder hundreds of millions of dollars in proceeds from these illicit transactions.” But his conviction for drug trafficking, engaging in a continuing criminal enterprise, conspiracy to commit computer hacking, and conspiracy to commit money laundering have made him a crypto martyr to some.

Many of the event attendees wore black T-shirts with white lettering reading: “Free Ross on Day One.”

Trump has embraced cryptocurrencies, but have all cryptocurrencies embraced Trump?

While Trump is seemingly saying all the right things about the cryptocurrency industry, some investors still seem wary.

Bitcoin fell slightly when Trump was on stage Saturday, but surged to a near-record high after his speech, surpassing $70,000. However, it was down more than 4% by Tuesday. That drop, according to cryptocurrency trackers, may have been caused by the U.S. government moving more than $2 billion in bitcoin, apparently stemming from the Silk Road acquisitions, to a new wallet.

“For most people, this is our primary source of income,” said Leslie Motta, COO of Gokhshtein Media, who participated in Bitcoin 2024. “We want politicians, we want people to come into this sphere 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.”

Crypto’s biggest donors seem to agree. Wearing a gold mask, “Shibtoshi,” the anonymous crypto billionaire and CEO and founder of SquidGrow, was ushered into the front row of the conference by the Secret Service just before Trump spoke.

“Because of who I am in this space… the money that I know I have, I feel like I have 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 was circumspect about his identity, he was completely honest about his reaction to Trump.

“I love every word he had to say,” he said. “When it comes to cryptocurrencies, I mean everything he said, when it comes to bringing cryptocurrency mining back here, getting Ross out. I mean, that resonates with me and everyone else in this space. He’s a businessman. He understands that bitcoin and other cryptocurrencies are a business and can be very profitable for the United States if they get involved, maybe adopt it as a currency. There are ways we can bring liquidity back to the United States instead of losing liquidity to other countries.”

Others admitted that after listening to Trump’s speech they had some doubts about his promises.

Julie Kennis, who hosts the NFT podcast and works with Motta at Gokhshtein Media, said she likes Trump’s clear policy on easing regulation of the cryptocurrency industry, but expressed ambivalence about his more “racial” comments. For example, during his speech, Trump made dismissive references to his granddaughter speaking Chinese and ridiculed Elizabeth Warren for claiming Native American heritage, something he has done many times before. Kennis called those statements “completely false.”

“I would like to hear (Vice President Kamala Harris’) policy because I think cryptocurrencies should have bipartisan support. It’s a huge industry, a growing industry, and people are working hard to create fantastic companies and ways to create wealth,” said Kennis, who voted for Trump in the last two elections.

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

While it’s unclear whether Trump will win votes on cryptocurrencies in November, he’s raking in their money now. A cryptocurrency fundraiser that followed Trump’s speech in Nashville was expected to raise $25 million, according to David Bailey, who organized the Bitcoin conference and is CEO of BTC Inc.

“I think the bigger picture is the growing normalization of bitcoin globally, on Wall Street, in Washington, and domestically,” Gladstein said.. “It’s not some niche thing on the internet anymore.”