Donald Trump seems to have added something new to his economic policy agenda: Bitcoin (BTC USD). The former president hails the leading cryptocurrency as it continues to trend upwards. Trump is now pushing to make Bitcoin “made in the USA” and making it part of his campaign.
On June 11th he did met with executives from several crypto mining companies including CleanSpark (NASDAQ:CLSK), Riot Platforms (NASDAQ:REVOLT) And Marathon Digital (NASDAQ:MARA), three of the largest crypto miners in the country. Executives who have met with Trump include CleanSpark Chairman Matthew Schultz, Riot CEO Jason Les and public policy chief Brian Morgenstern previously worked for both the US Treasury Department and the White House.
All three crypto stocks are rising today as Trump’s new focus helps boost the sector’s momentum. But that raises the question of why Trump is suddenly embracing cryptocurrencies. He wasn’t always a fan of it.
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Trump Push Spurs Crypto Stocks
News of the meeting broke yesterday after the market closed. Today, the momentum has translated into tidy gains for crypto stocks across the board, while Bitcoin prices are also rising. RIOT is up 8% on the day while CLSK is up 3%. MARA is also in the green, but only by 3%. This rally follows a post on X from the Bitcoin conference announcing Trump’s meeting with executives from these and several other companies:
Following the event, Trump addressed Truth Social share his opinion on Bitcoin. In a post urging voters to support him, he stated: “Bitcoin mining could be our last line of defense against a CBDC.” [Central Bank Digital Currency]He also voiced criticism of President Joe Biden, ending the post by saying, “We want all remaining Bitcoins to be MADE in the USA!!! It will help us be energy dominant!!!”
Trump’s post has certainly garnered positive attention on social media as the crypto community rallies behind him. After a volatile month, all three crypto stocks could definitely use the catalyst. But Trump wasn’t always such a fan of Bitcoin. In fact, he has been very critical of it in the past.
Trump on Bitcoin
Has Trump really changed his stance on Bitcoin and crypto in general?
If so, it would be a complete reversal of his previous anti-crypto stance. In 2021, he said A Fox business Interviewer: “Bitcoin, it just seems like a scam. I don’t like it because it’s another currency that competes with the dollar.” In a later interview, he stressed that he liked the US currency, adding: “I think the other currencies are potentially a disaster, just waiting to happen.”
It’s also worth considering Trump’s recent statement on Bitcoin in context. It seems to overlook the fact that the US is the world’s leading Bitcoin miner collective hash rate of 35.4%. This is almost twice as much as in the second largest country Kazakhstan, which ranks second with a hash rate of 18.1%. By this logic, the US is still by far the most dominant nation in the Bitcoin mining space, especially when it comes to this about 40% of Bitcoin mining operations around the world. That has helped crypto mining stocks recently, especially after China cracked down on crypto mining in 2021. make it illegal.
“ENERGY DOMINANT”
Furthermore, while Trump clearly believes the US is becoming “energy dominant,” he doesn’t seem to understand how much energy Bitcoin mining requires. Ensuring that all Bitcoins are mined on American soil would require even more energy at a time when 2% of all U.S. electricity is out is consumed through crypto mining. Expanding Bitcoin mining operations would certainly boost crypto holdings, but it would not strengthen the country’s energy dominance unless sweeping changes were made to the national power grid.
The USA was also one Net exporter of energy since 2019.
Energy dominance isn’t the only part of Trump’s pro-Bitcoin stance where the details don’t add up. In the post, he does not make it clear why the US needs to oppose a CBDC, especially as the US Federal Reserve has done not decided on the transition to one, as research is still being carried out. As Forbes report:
“It is unclear how the adoption of cryptocurrencies would deter the Fed from adopting a U.S. digital currency, and the possible widespread adoption of cryptocurrencies in the U.S. may even encourage them to move more quickly on the matter.”
Trump and Crypto Stocks: What’s Next
Even as crypto stocks continue to rise, investors should evaluate this news in context. Trump is no stranger to bold statements and campaign promises that do not necessarily translate into political action.
The List of his claims, particularly in the area of economic policy during his presidential election campaign in 2016, he did not implement for a long time. Trump promised to increase economic growth by 4% each year during his presidency. But when he left office in 2020, the economy had stalled amid rising unemployment. Under his leadership, the federal deficit exploded 7.8 trillion dollars after Trump had claimed he would eliminate it.
Now Trump is embracing Bitcoin, but inadvertently suggesting he doesn’t understand it. If he is re-elected, crypto stocks will likely rise as market dynamics shift in their favor. However, if he is unable to act in this space and bring about real policy changes that benefit crypto mining, this growth could be short-lived. Trump is notoriously unpredictable, and his new stance on cryptocurrencies isn’t exactly cause for celebration for investors.
At the time of publication, Samuel O’Brient did not hold, directly or indirectly, any positions in the securities mentioned in this article. The opinions expressed in this article are those of the author and are subject to InvestorPlace.com’s publication policies.