Donald Trump in construction site of Trump Tower, Fifth Avenue, New York City, 1980.
(Full disclosure: I’m helping build Coinbits.app, a bitcoin banking platform.)
As the 2024 U.S. presidential election approaches, frontrunner Donald Trump has made the clearest statement to date that he intends to make bitcoin a key campaign issue – a topic that other presidential candidates have also highlighted.
Yesterday, in a characteristically strident social media post, Trump stated:
“Bitcoin
Bitcoin
Trump’s specific focus on bitcoin, and not cryptocurrency in general, signals an understanding of bitcoin’s unique potential to promote energy independence and economic revitalization. Under the Biden administration, regulatory agencies like the SEC and FDIC have aggressively stifled the growth of the bitcoin sector, prompting an exodus of talent to more favorable jurisdictions abroad. If these policies were to be reversed, a supercharged domestic bitcoin mining industry could catalyze a resurgence of American industrial capacity, job creation, and energy resource development.
Trump’s framing of bitcoin mined in the U.S. as being “MADE IN THE USA” is a clever way of articulating the overlap between the interests of the bitcoin industry and his “Make America Great Again” movement. It aligns bitcoin mining with themes of American re-industrialization, job creation, and prosperity. Whether it will resonate with his base remains to be seen.
In endorsing bitcoin, Trump confronts the threat of Central Bank Digital Currencies, which would allow increased governmental surveillance over everyday transactions. Unlike bitcoin, which is decentralized and operates beyond the reach of any single authority, CBDCs give governments unprecedented control, letting them to monitor and censor every financial transaction, no matter how small. A robust bitcoin infrastructure in the U.S. would serve as a bulwark against a CBDC ever being adopted here.
What is at stake cannot be overstated. It is not only crucial to avoid a dark future of CBDCs, but also to ensure that the U.S. does not fall behind other nations who realize that bitcoin can be used to establish a strategic advantage.
Historically, the wealth and power of nations have been tied to their gold reserves. In the late 19th and early 20th centuries, the British Empire established the gold standard, and its control of global gold flows underpinned its status as the world’s foremost power.
However, two world wars ended that advantage. After World War I, Britain began to see an outflow of gold, a trend that accelerated after World War II as the costs of war and reconstruction drained its reserves. This shift in gold holdings led to the Bretton Woods Agreement in 1944. Under this new system, the U.S. dollar, which was then backed by the very gold that had recently been moved out of Europe and into the U.S., was established as the world’s primary reserve currency. This move effectively ended European economic dominance and kicked off an era of American hegemony.
In a digital economy based on AI and other emerging technologies, bitcoin will subsume the roles of both gold and the dollar in shifting global power dynamics. Countries with significant bitcoin reserves and bitcoin industrial production capacity will command more influence than those that do not have them. This dynamic sets the stage for a zero-sum game where nations use bitcoin to compete and gain strategic advantages over each other.
To Trump, support for bitcoin mining may just be a play for the presidency, or it may have more substance than that. Regardless, how the U.S. responds to the opportunities presented by bitcoin will have a profound effect on whether it can maintain its place in the next era of global power. Decisions made now will resonate beyond the next election cycle and shape the future for decades to come.
