News
“Almost” Everyone in the Cryptocurrency Industry Will Be a Winner in a Second Trump Administration
(Bloomberg) — Bitcoin miners and cryptocurrency firms that have been blocked from going public in the U.S. could end up being the biggest winners in the digital asset world under a second Donald Trump presidency. Foreign firms at risk of losing market share could end up being the biggest losers.
Bloomberg’s Most Read
That’s the view gaining traction among market participants and observers in the wake of the former president’s growing embrace of cryptocurrencies as the odds of his election rise. While a CBS News poll released Thursday showed Trump with a majority (52%) of likely voters in a likely rematch with President Joe Biden, it’s unclear who will be on the ballot in November. On Sunday, Biden said he would not seek reelection and endorsed Vice President Kamala Harris to become the Democratic nominee.
“Almost everyone in the United States would be a winner if they were willing to operate under the new rules when they are implemented,” said Christian Catalini, founder of the MIT Cryptoeconomics Lab.
Bitcoin Miners
In addition to the nearly 10% increase in the price of Bitcoin following Biden’s poor performance in the June debate and the failed assassination attempt on the Republican candidate, the biggest market reaction has been in the stock prices of companies that validate transactions on the cryptocurrency blockchain.
Trump met with Bitcoin miners in June and in a subsequent post on his Truth Social account said that Bitcoin mining could be “our last line of defense against a CBDC,” referring to a central bank digital currency. He added that he wants all remaining Bitcoin to be “MADE IN THE USA!!!”
Shares of Marathon Digital and Riot Platforms, two of the largest publicly traded companies, have risen about 30% in that time. Cipher Mining has jumped nearly 50%, with the company mulling a potential sale after receiving acquisition interest, people familiar with the matter have previously said.
IPO Candidates
In what was probably unthinkable after the cryptocurrency markets crashed in 2022, crypto companies are again planning initial public offerings. Circle, the issuer of the roughly $33 billion USDC stablecoin, filed for an IPO in January after abandoning an earlier bid to go public more than a year ago. Northern Data, a cryptocurrency miner turned AI computing provider, is considering a U.S. listing at a valuation of up to $16 billion, and Kraken, the second-largest U.S.-based cryptocurrency exchange, is preparing for an IPO.
The story continues
Digital asset transactions have been a major hurdle for those companies to get a nod from the U.S. Securities and Exchange Commission. The agency lists a number of tokens as unregistered securities, and its chairman, Gary Gensler, has been criticized by high-profile crypto industry figures like Coinbase CEO Brian Armstrong for cracking down and filing lawsuits against cryptocurrency firms under his leadership. Trump is likely to appoint a more crypto-friendly SEC chairman.
Digital Exchanges
A second Trump presidency could also lead to a more accepting banking system for cryptocurrency firms. Digital asset trading platforms have seen a shrinking pool of banks to turn to for conversion between fiat currency and cryptocurrency assets. A number of crypto-friendly banks like Silvergate and Signature have gone bust, further limiting cryptocurrency firms’ access to banking services.
Offshore Rivals
While most industry participants would celebrate a Trump victory, a handful of firms could suffer. Offshore cryptocurrency firms, particularly trading platforms like Binance, OKX, and Deribit, have enjoyed growing market share as tight regulation prevents U.S. rivals from launching some of the most popular services. For example, with more crypto-friendly regulators and a clear legal framework, U.S.-based firms could launch trading services that offer more leverage or cryptocurrency options and futures with multiple expiration dates.
Another loser could be the multi-billion dollar Chinese conglomerate Bitmain. The largest Bitcoin mining machine manufacturer has dominated the market, and most of the US-listed Bitcoin miners are using its facilities. In addition to Trump’s China trade rhetoric, his ambition to produce all remaining Bitcoin in the US could pose additional challenges for the company. This is especially true with US competitors like Block and Auradine selling large quantities of new chips or machines to mining companies.
Central Bank Digital Currencies
Central bank digital currency, or CBDC, is an easy target for Trump. Many cryptocurrency participants see a CBDC as a way for the government to improve financial oversight of its citizens. Trump has vowed never to allow the dollar to be digitized.
Read: Trump’s disdain for digital dollar threatens to bring back the ‘Cold War’ era in money
(Updates to add President Joe Biden saying he will not run for reelection in second paragraph)
Bloomberg Businessweek’s Most Read
©2024 Bloomberg L.P.