Trump Courts the Crypto Industry as Bitcoin Price Surges and Falls Within a Week

Bitcoin, a cryptocurrency infamous for its price volatility and environmental impact, has become a focal point of the US presidential campaign.

Bitcoin, a cryptocurrency known for its price volatility and environmental impact, has become a talking point in the US presidential campaign.

On July 27, former US president and Republican nominee for the upcoming election Donald Trump headlined the biggest Bitcoin conference of the year in Nashville.

In his speech, Trump said he will make the US the “crypto capital of the planet and the Bitcoin superpower of the world” if returned to the White House after November’s election. His comments were met with rapturous applause from the crowd.

Trump’s courting of the crypto industry is almost certainly a political move. The Trump campaign has raised US$25 million from the sector since it started accepting cryptocurrency donations in May, and it is expected to receive even more following the event in Nashville.

His public backing of crypto undoubtedly boosted investor optimism. The price of Bitcoin surged to almost $70,000 on July 29, its highest level in more than six weeks, before dropping back to $62,000 a few days later.

But questions remain about the feasibility of Trump’s promises if he becomes president. And, even then, it is unclear whether Trump’s pro-crypto agenda will have a sustained effect on the price of Bitcoin in the long term.

Bitcoin’s price surged and fell within a week

In his speech, Trump pledged to keep “100% of all the Bitcoin” the US government currently holds or acquires in the future if he is elected.

Many countries, including the US, hold Bitcoin. A large part of these holdings are Bitcoin that has been seized from criminals. The question of how to handle this confiscated cryptocurrency is complex.

Not selling it may send a conflicting message to victims of cryptocurrency crime. Chinese fraud victims, for example, have previously urged the UK government to return £3 billion ($3.8 billion) in Bitcoin held by London police.

If governments truly want to protect consumers from fraud and cybercrime in cryptocurrency markets, recovering stolen Bitcoin should be part of their actions. Thus, Trump’s promise to keep all of America’s Bitcoin holdings may not be practical.

Besides that, Bitcoin was designed initially as a decentralized currency. Its key attraction was that it would operate independently from any central authority.

Since its inception in 2009, the degree of decentralization has decreased. A large amount of Bitcoin is now held by major mining pools – groups of miners who combine their computational resources to increase their chances of successfully “mining” new Bitcoins.

Adding significant government holdings in Bitcoin could lead to an even greater concentration of power among large players. This is probably not what most cryptocurrency users desire.

The lack of regulatory clarity is another major obstacle to the mass adoption of Bitcoin and other blockchain-based innovations. From this perspective, Trump’s pro-crypto agenda could be welcomed by the crypto community, as he may create a more favorable environment in the US for cryptocurrency miners, startups and other crypto entrepreneurs.

At the Nashville conference, Trump criticized unclear and overly strict US laws, promised to fire the Securities and Exchange Commission (SEC) chair Gary Gensler who is unpopular in crypto circles for his antagonistic stance towards the industry, and warned that the crypto community would be crushed if Kamala Harris is elected.

Trump said: “We will have regulations, but from now on the rules will be written by people who love your industry, not hate your industry.” However, the specifics of how these new “crypto-friendly” regulators will achieve their goals if Trump is elected remain unclear.

In 2023, the SEC led major investigations into crypto’s main troublemakers. The founder of the now-bankrupt FTX cryptocurrency exchange, Sam Bankman-Fried, for instance, was sentenced to 25 years in prison for fraud and was ordered to forfeit US$11.2 billion.

The US has the power to make the field safer for all stakeholders. But whether these anti-crime measures will continue under a new crypto-friendly government led by Trump remains uncertain.

Regardless of uncertainty about who will take office in November, there are other concerns for cryptocurrency users about government Bitcoin holdings.

Ketidaktentuan Bitcoin sebahagiannya didorong oleh kerajaan yang menjual pegangan Bitcoin mereka – harga Bitcoin telah jatuh sebanyak 15% sejak Jerman mula menjual kira-kira €2.5 bilion ($2.7 bilion) Bitcoin yang dirampas pada awal bulan Jun. Tetapi Bitcoin juga merupakan aset yang sangat spekulatif yang sangat sensitif terhadap liputan media, berita dan juga pengumuman media sosial.

Pendirian kerajaan AS mengenai isu alam sekitar Bitcoin, yang menjadi subjek kritikan media, juga akan mempengaruhi harganya dalam jangka panjang.

Perlombongan Bitcoin biasanya menggunakan sejumlah besar kuasa pengkomputeran untuk menyelesaikan pelbagai teka-teki matematik dan menambah token baharu pada rantaian blok. Ia adalah satu proses yang menggunakan sejumlah besar tenaga elektrik dan air, serta menghasilkan sejumlah besar sisa elektronik.

Kerajaan AS telah melancarkan inisiatif pada Januari 2024 bertujuan

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