Donald Trump this week pivoted to embrace a niche constituency that few would have expected him to champion—cryptocurrencies and the deep-pocketed investors who have made them their domain.
Donald Trump Woos the Crypto CrowdThe former president and onetime bitcoin skeptic on Monday helped launch a new crypto business with his family. On Wednesday, he bought a round of burgers for denizens of a bitcoin-theme dive bar in New York. Pledges to block a Federal Reserve-backed digital currency and establish a “strategic national bitcoin stockpile” stand out in stump speeches that mostly focus on such center-of-the-plate political issues as immigration and trade.
All of this has won him fervent support from a growing subset of single-issue voters—and wealthy donors—who say the government’s treatment of cryptocurrency will determine how they pull the lever on Election Day.
An industry often at odds with government has been invigorated by having a potential champion in the White House, said Dennis Porter, chief executive officer of Satoshi Action Fund, a bitcoin-backing nonprofit.
“This is an industry full of voters who are getting wealthier and more influential, and now there’s someone who wants to be a voice for them,” Porter said. “They’re going to give him votes, and they’re going to give him money.”
While the value of those votes remains to be seen, the money has already proven helpful.
A blanket endorsement
Marc Andreessen and Ben Horowitz, co-founders of the venture investor Andreessen Horowitz, said on a podcast in July that they were supporting Trump after he personally “rewrote the Republican National Committee platform” into what they called a “flat-out, blanket endorsement of the entire space.”
They have been joined in their support by Cameron and Tyler Winklevoss, the billionaire founders of the crypto exchange Gemini. They said they are backing Trump because he is “pro-bitcoin, pro-crypto and pro-business” and gave his campaign $1 million each in crypto. The donations were partially refunded because they exceeded federal campaign contribution limits. Jesse Powell, a co-founder of the crypto exchange Kraken, said he donated $1 million to Trump’s campaign and a pro-Trump super PAC, mostly in ether tokens, according to his post on X and Federal Election Commission filings.
The tech moguls’ contributions are an offshoot of the growing campaign clout of the crypto industry, whose network of nonpartisan super political-action committees has amassed a nearly $170 million war chest to spend in the 2024 election cycle. Trump’s campaign has raised millions of dollars in contributions made in cryptocurrencies, too.
Crypto’s deepened pockets are a turnaround of the past two years, when cryptocurrencies and companies blew up, creating a cascading effect that pulled prices lower yet. Everyday traders saw investments wiped out, and the Justice Department charged several former industry leaders with fraud, sending some to prison. Crypto prices have gone through similar boom-bust cycles in years past. This year, bitcoin’s price has climbed back to near record highs.
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As of yet, this broader spigot hasn’t splashed into the presidential election, focusing instead on congressional races. The potential impact in those races has been immense, with crypto companies constituting nearly half of all corporate contributions to nonpartisan PACs, according to Public Citizen, a nonprofit consumer advocacy group.
Trump’s crypto campaign echoes some other presidential candidates who have dedicated themselves to specific fiscal policies. Much of William Jennings Bryan’s 1896 campaign was a protest of the gold standard. After taking office, Franklin D. Roosevelt issued an order restricting the private use of gold. Ron Paul’s 2008 campaign assailed the Federal Reserve.
Crypto went courting
The crypto industry’s courting of Trump was on full display at a June fundraising dinner in San Francisco. In attendance were representatives from some of crypto’s largest U.S. businesses such as the exchange Coinbase and the payments platform Ripple, as well as the Winklevoss twins, whom Trump jokingly referred to as “supermodels.”
At the dinner, Trevor Traina—who was ambassador to Austria during the Trump administration and is now a crypto entrepreneur—stressed that while most of the major internet businesses were U.S.-based, many large crypto companies are based elsewhere because of perceived hostility from the government.
Traina asked whether the U.S. wanted to miss out on a massive industry. Trump said that would be terrible.
The talk quickly turned to a shared dislike of Securities and Exchange Commission Chair Gary Gensler, whose aggressive enforcement agenda has made him something of a boogeyman for crypto companies.
“We all sort of agreed that Gensler is like in that movie ‘A Quiet Place,’” said Traina. “If you make a sound, he sues.”
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That month, Trump also hosted about a dozen executives from the bitcoin-mining industry—which uses computers to generate random numbers in the hopes of unlocking fresh bitcoin—at his Mar-a-Lago resort. Over sodas and macadamia cookies, Trump asked the executives about the energy consumption needs of bitcoin mining and told them his campaign would develop friendly talking points about the industry in the coming months.
“He actually made the statement that he would like nothing more than to see all of the remaining bitcoin mined in the U.S.,” said Matthew Schultz, executive chairman of the bitcoin miner CleanSpark, who attended the event.
A Wall Street linkup
Trump’s embrace of crypto has found its purest form in his appointment of Howard Lutnick, chairman and CEO of Cantor Fitzgerald, as a co-chair of his transition team. By handing the position to his longtime friend and fundraiser Lutnick, Trump gives the crypto industry’s biggest cheerleader on Wall Street a potentially powerful role.
Before Lutnick’s appointment, both men spoke at a late July bitcoin conference in Nashville, Tenn.
“The rules will be written by people who love your industry, not hate your industry,” Trump said in his speech.
Lutnick regaled the audience with Cantor’s crypto bona fides, established as he has pushed Cantor deeper into the industry since 2020. The company now owns “a shedload of bitcoin,” Lutnick said, and announced that the company was opening a $2 billion facility to lend against bitcoin collateral.
Lutnick also has tied Cantor to Tether, one of the largest and most profitable companies in crypto. Tether’s main product is the world’s most-used stablecoin, also called tether, which essentially functions as an unregulated digital dollar with $119 billion in circulation. Cantor manages Tether’s portfolio of U.S. Treasurys.
Trump’s crypto-related promises often have direct effects on these backers. A “strategic national bitcoin stockpile” of the kind that Trump has proposed would legitimize bitcoin as a reserve asset. His promise to block a Fed-issued digital currency would potentially keep a powerful competitor to Tether out of the market.
Some investors and analysts view Trump’s candidacy as being generally positive for crypto prices more broadly, even beyond his efforts to woo the digital-currency crowd. Because of the candidate’s habit of making comments that seem aimed at rattling the status quo, a Trump presidency is widely regarded on Wall Street as being likely to lead to greater volatility in all asset classes—an environment that has been good for bitcoin in the past.
At the conference, Trump also reiterated a pledge to commute the sentence of Ross Ulbricht. Using the alias “Dread Pirate Roberts,” he created and ran the crypto-fueled Silk Road online drug marketplace before being sentenced to life imprisonment on federal drug and computer crime charges.
Not a fan of the SEC chair
But Trump’s most popular crypto-wooing pledge is his promise to remove Gensler from atop the SEC.
In their podcast, which was recorded before Trump’s pledge, Andreessen and Horowitz complained that Gensler has refused to meet with them on several occasions, despite their firm’s being among the biggest investors in cryptocurrency. Powell’s Kraken has been locked in legal combat with the regulator, having been charged by the agency with breaking securities laws and separately paying a $30 million settlement to the SEC.
“The U.S. securities laws have worked to protect investors for 90 years, and there’s nothing incompatible about the crypto field with these time-tested laws,” a spokeswoman for the SEC said.
Trump’s pledge to fire Gensler on his first day in office was met with such thunderous applause and loud cheers from the audience at the bitcoin conference that he repeated the promise.
“I didn’t know he was that unpopular. Let me say it again,” he said. “On day one, I will fire Gary Gensler.”
‘Crypto is one of those things we have to do’
Trump’s tendency to entwine his business interests and political career also has taken a crypto turn.
Trump has launched and sold four collections of nonfungible tokens—crypto’s version of digital trading cards—to his supporters since 2022.
His latest crypto business venture, World Liberty Financial, launched with much fanfare Monday evening, through a two-hour livestream featuring Trump and his family on Elon Musk’s X platform.
The project, which said it wants to “make crypto and America great by driving the mass adoption of stablecoins and decentralized finance,” has shared few details about its mechanics so far. The team behind the project said it would sell and distribute a token to wealthy investors who meet certain income and net worth criteria.
Trump, World Liberty’s so-called chief crypto advocate, didn’t address the project directly during his 40-minute interview on the stream. Some of his speech focused on a second apparent assassination attempt foiled the day before, when a gunman was arrested after lying in wait at the Mar-a-Lago golf course. At the time, Trump was golfing with Steve Witkoff, one of World Liberty’s backers.
When he spoke about cryptocurrency, Trump said his children opened his eyes more than anything else. His sons Donald Jr. and Eric (World Liberty’s “Web3 Ambassadors”) have been teasing World Liberty and touting the power of decentralized finance on social media for weeks. His youngest son, Barron (World Liberty’s “Chief DeFi Visionary”), is also an enthusiast, with as many as four crypto wallets, or digital wallets that allow users to store, manage and transact cryptocurrencies, Trump said.
The former president’s comments fell in line with his tendency to paint his embrace of crypto in broad strokes.
“Crypto is one of those things we have to do,” he said. “Whether we like it or not, we have to do it.”
Write to Ben Foldy at ben.foldy@wsj.com, Vicky Ge Huang at vicky.huang@wsj.com and Caitlin Ostroff at caitlin.ostroff@wsj.com
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Appeared in the September 21, 2024, print edition as 'Trump Hitches Campaign to Crypto Crowd'.