- Republican Presidential nominee Donald Trump has taken a U-turn on his crypto stance but the industry is trying to decipher whether they can trust their new supposed ally.
Just three years ago, Trump called Bitcoin a “scam,” and last week the former president embraced cryptocurrency donations, claims he would commute the sentence to the creator of Bitcoin marketplace Ross Ulbricht, and said under his leadership, he wouldn’t let cryptocurrency builders leave the country.
“Our country must be the leader in the field, there is no second place,” Trump said in a May 25 post on Truth Social. “I am very positive and open minded to cryptocurrency companies and all things related to this new and burgeoning industry,” he said.
The sudden change from Trump has some in the crypto industry wondering whether they can trust the former president to follow through if he makes it to the White House.
Others wonder whether they should overlook any of the qualms they may have and back him just because of his pro-crypto stance.
Sudden Shift
It’s been a confluence of factors over the years, but the gradually-then-suddenly moment took place on May 8, during a Mar-a-Lago gala dinner for supporters who purchased his NFT collection featuring his mugshot from his Georgia jail surrender.
Malcolm Castañeda, Chief of Staff for NFT project, DeGods who was present at the event, probed Trump.
Castañeda explains that the company he works at has been advising the Trump team that oversees his NFT collections, and that DeGods were invited to participate at the Mar-a-Lago event.
He told The Defiant that they went prepared to publicly ask what the former president was planning to do in light of the hostility the crypto industry has received from top government officials, including Securities and Exchange Commission (SEC) Chairman Gary Gensler, and U.S. Senator Elizabeth Warren.
“A lot of the smartest people in crypto are leaving the country due to U.S. regulations,” said Castañeda, who proceeded to ask Trump what he would do to stem the brain drain.
Trump said his government will stop the hostility that the industry has experienced from the current administration, although he didn’t elaborate on the details.
“We’re going to embrace them if we want them to say,” he claimed.
Does Trump Mean It?
This sudden shift in tone has experts wondering.
“Trump is going all in for these voters — he has promised to roll out the red carpet for the crypto industry in the U.S. and release jailed crypto programmers,” political commentator Rajgopal Menon, Vice-President, WazirX crypto exchange told The Defiant. “This has set the cat among the pigeons as evidenced by the hasty approval of the Ethereum ETFs. No politician can hope to get elected after antagonizing the crypto voter.”
But others, like Adam Cochran, partner at Cinneamhain Ventures, shared strong reservations about Trump’s pro-crypto stance.
“Just like Biden, Trump was previously anti-crypto and is pandering to get votes,” he said. “Trump isn’t someone to honor his transactions.”
Meanwhile, others aren’t surprised by the shift in views.
Jonathan Thomas, CEO and co-founder of Blueberry Protocol is one of them.
“Crypto has increased its presence between the last and current presidential elections, from the FTX collapse to ETF approvals,” he told The Defiant. “Candidates like Trump are looking to gain every vote they can, and crypto has become important to earn.”
And as there are some that saw the scenario playing it out as it is now, optimists abound.
Potential Scenarios
For crypto lawyer James Murphy, also known as “MetaLawMan,” Trump’s possible victory in the upcoming November elections could lead to the dismissal of several SEC crypto lawsuits.
Murphy anticipates “a very different SEC” based on Trump’s recent crypto-friendly statements. “I could imagine voluntary dismissals of crypto cases the [SEC Chair] Gary Gensler regime has initiated where there was no fraud and no victims.”
Trump joins the ranks of presidential hopefuls Robert F. Kennedy Jr., Rand Paul, and Andrew Yang, all of whom have embraced cryptocurrency contributions for their campaigns.
The donation page for Trump’s 2024 campaign prominently displays logos for Bitcoin (BTC), Ether (ETH), Dogecoin (DOGE), Shiba Inu (SHIB), XRP, USD Coin (USDC), Solana (SOL), and 0x (ZRX).
Trump is not just embracing crypto; his own holdings have surged as well. On-chain data shows Trump’s crypto asset portfolio briefly surpassed $10 million on Monday.
A Push Against Biden
Another big reason for Trump to support crypto close to the election, as per experts, is to use Biden’s perceived anti-crypto stance to his favor.
The Biden administration, through the SEC, has been tough on the crypto industry.
In March 2022, Biden issued an executive order for comprehensive crypto regulation and exploring a U.S. central bank digital currency (CBDC).
Biden also proposed a 30% tax on electricity used by crypto miners, citing environmental concerns. Historically, his administration has been wary of unregulated cryptocurrencies due to risks like money laundering and fraud.
And the SEC has been relentlessly pursuing a regulation-by-enforcement agenda against crypto. The agency recently threatened to sue decentralized exchange Uniswap, and last year in June, the SEC went against Coinbase and Binance, charging both firms with violating U.S. securities laws.
Authorities also took aim at several crypto projects, labeling a number of tokens such as Solana and Cardano, unregistered securities.
Trump’s campaign criticized Senator Elizabeth Warren, labeling her a “Biden surrogate” and accusing her of forming an “anti-crypto army” to limit Americans’ financial freedoms.
In response, the campaign vowed that MAGA supporters would form a “crypto army” to secure a victory on November 5.
Bipartisan Support
Notably, the shift in Trump’s views has also triggered a 180 from Democrats.
Two crypto bills, H.J. Res. 109 and the Financial Innovation and Technology for the 21st Century Act (FIT21), have garnered bipartisan support, indicating a shift in legislative attitudes towards cryptocurrency.
The House has made a move by passing FIT21 legislation with a 279-136 vote to establish a regulatory framework specifically designed for cryptocurrency. This marks the first instance where either chamber of Congress has undertaken such a step.
Dozens of Democrats, including Senate Majority Leader Chuck Schumer, have parted ways with Elizabeth Warren’s anti-cryptocurrency stance in recent days.
This bipartisan move was driven by a mix of crypto advocacy, bank lobbying, and frustration with the SEC under Gensler.
Schumer said in a statement, “New York State already has a strong law on the books, and they weren’t consulted on this regulation.”
Thomas noted that both parties are going to do what they can to appease crypto voters. “It will likely be a competition of who can outdo the other to push crypto regulation forward,” he said.
Legal Challenges
Trump’s decision to welcome cryptocurrency comes amid ongoing legal challenges.
He faces 88 criminal charges across four cases — two in federal courts and two in state courts. Trump denies any wrongdoing in all cases.
In Manhattan, Trump is under scrutiny for allegedly falsifying business records stemming from a $130,000 payment to adult film star Stormy Daniels.
Meanwhile, in Georgia and the District of Columbia, he faces allegations of attempting to overturn the 2020 election results.
Even with the turn of events on both sides of the political aisle, some are pushing back against Trump’s allegedly pro-crypto agenda.
Molly Jane Zuckerman, editor of op-eds at Blockworks, wrote a warning to single-issue voters, like the crypto enthusiasts that are now star-gazed at the former president’s backing of the industry, and avoid getting blindsided by his most recent words.
Trump has edged ahead in several polls. On Polymarket, 56% of traders are betting he wins the election versus Biden’s 37%, and on PredictIt, Trump also leads the race.
On opinion polling website 538, Trump also is ahead, although with a much tighter margin, with 41.3% of voter preferences versus Biden’s 39.9%.
Maybe part of Trumps’ lead reflects that crypto enthusiasts are willing to take their chances.
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