Former President Donald Trump, who once called bitcoin a “scam,” has embraced cryptocurrency and is angling to position himself as a champion of the industry in this year’s presidential election.
The turnaround has been years in the making and comes as bitcoin and other cryptocurrencies enjoy a burst of institutional acceptance and a wave of optimism among investors. Trump’s warming to digital assets was on full display this weekend in Washington, where he told attendees at the Libertarian Party’s convention that he would defend the crypto industry.
“To the nation’s 50 million crypto holders, I say this: With your vote, I will keep [Sen.] Elizabeth Warren and her goons away from your bitcoin,” Trump told the crowd, drawing a contrast to the Massachusetts Democrat, who is one of the industry’s biggest opponents.
But Trump hasn’t always been a fan of digital assets and the flagship cryptocurrency bitcoin. In fact, his courtship of crypto proponents is a 180-degree turn, policywise.
“Bitcoin, it just seems like a scam. … I don’t like it because it’s another currency competing against the dollar,” Trump told Fox News in 2021 a few months after leaving the presidency, adding that he wants the dollar to be the currency of the world.
David McIntosh, president of Club for Growth, told the Washington Examiner that in addition to any personal evolution on the matter, the Trump campaign’s embrace of crypto is a shrewd political move.
“Part of that is politics. It’s seeing the opportunity to distinguish himself with younger voters, with voters that are engaged … in crypto,” McIntosh said of Trump’s speech at the Libertarian convention. “Because Biden has such a terrible record on it.”
Cryptocurrency backers have been leery about Biden’s record on it. Just this month, the Biden administration found itself at odds with crypto proponents by opposing bipartisan legislation that passed the House 279-136 and is meant to bring regulatory clarity for digital assets while safeguarding investors and consumers.
Additionally, several Democrats, including Senate Majority Leader Chuck Schumer (D-NY), broke with the administration and voted this month to cancel a Securities and Exchange Commission accounting policy rule related to cryptocurrency that critics argue discourages companies and major custodians from holding crypto assets for customers.
But Biden’s regulators have consistently clashed with crypto proponents. The SEC under Chairman Gary Gensler has been very tough on the industry, particularly in the wake of the collapse of the major exchange FTX. SEC enforcement actions against crypto companies have nearly doubled since Gensler took over in 2021. The Commodity Futures Trading Commission under Biden has also cracked down on crypto.
Jim Harper, a nonresident senior fellow at the American Enterprise Institute, told the Washington Examiner that it is not clear whether the shift in Trump’s policy is explicitly to draw a contrast between him and some on the Left such as Warren, but he emphasized that the more centrist, mainstream Democrats on Capitol Hill have broken with the “hard-left, anti-crypto team” in recent votes. Harper noted the resolution that Schumer voted for and described it as a “shot across the bow,” given the White House’s opposition.
Biden’s positioning on cryptocurrency is further complicated by Trump’s pivot and full-throated endorsement of digital assets.
“Trump’s switcheroo is significant in the position it puts Biden in right now,” Harper said, adding that he thinks it is possible it pulls Biden closer to the center on crypto issues.
“[Biden] has kind of let the Left run and that’s got him kind of boxed in right now where the centrist Democrats are going to give crypto, which is an active, energetic, and monied community … to the Right, and I think that is a mistake that many in the Democrat Party recognize,” he added.
More evidence of Trump’s transition on cryptocurrency comes in his vow to free Ross Ulbricht, who is serving a life sentence, from prison. Ulbricht, 40, was sentenced in 2015 for running the darknet platform Silk Road, which was used as an online black market for illegal drugs and other products purchased and sold using cryptocurrency.
“If you vote for me, on Day One, I will commute the sentence of Ross Ulbricht,” Trump told the Libertarian gathering.
In 2019, Trump tweeted that he was “not a fan” of bitcoin and other cryptocurrencies, warning that they could be used in the manner that Ulbricht facilitated on Silk Road.
“Unregulated Crypto Assets can facilitate unlawful behavior, including drug trade and other illegal activity,” Trump wrote.
Trump’s embrace of bitcoin and the crypto space has largely moved in tandem with the general public and financial markets. The run-up in cryptocurrencies such as bitcoin and ethereum has been described as a bubble and a fad by skeptical analysts. When Trump was first elected, bitcoin was trading at about $700. It is now flirting with $70,000, marking 9,900% gains since Election Day in 2016.
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McIntosh, who also co-chairs the bipartisan Blockchain Innovation Project alongside former Democratic Rep. Tim Ryan, noted that, over the past few years, there has been a small but growing voting bloc whose No. 1 issue is crypto.
“I think what you’ll see is, in this election, Trump will benefit from being the advocate for crypto and expanding it,” he said. “I think he will have an approach like Bill Clinton did in the ’90s where it was: Keep our hands off of the internet, let it develop as a new technology. And then as we’re seeing now 25 years later, it has revolutionized our whole economy.”