Trump once trashed bitcoin as ‘based on thin air.’ Now, he’s addressing crypto’s largest convention

By CNN Newsource

Published July 27, 2024 12:00 AM

By Steve Contorno and Aaron Pellish, CNN

Nashville (CNN) — For a time, Donald Trump would have made for an unlikely headliner at a cryptocurrency confab.

As president, Trump declared bitcoin “not money” and criticized it as “highly volatile and based on thin air.” He cautioned that crypto assets helped facilitate illegal underground markets.

“We have only one real currency in the USA, and it is stronger than ever,” Trump wrote on Twitter in 2019. “It is called the United States Dollar!”

But on Saturday, Trump will address the cryptocurrency industry’s largest annual gathering here in Nashville not as a cynic but as one of its best-known supporters – the culmination of a total reversal on the issue during the former president’s latest White House bid.

Despite cryptocurrency’s troubling recent history and his own past reservations, Trump has fully embraced the hype and hopes of the nascent industry. His campaign now accepts bitcoin donations – and has collected about $4 million worth, a source with knowledge of his fundraising said. He has attacked the Biden administration’s efforts to regulate the industry as a “war on crypto” without acknowledging the massive fraud schemes that have shattered public confidence in digital currencies. And he has vowed as president to make it easier for cryptocurrency mining companies to operate in the United States.

“Otherwise, the other countries are going to have it,” Trump said earlier this month in Wisconsin.

The industry, in turn, has embraced Trump. Its leaders and investors have donated millions of dollars to his campaign and aligned political committees. They are cheerleaders for his candidacy to their sizable online audiences and are now providing him a platform to speak directly to 20,000 of their most engaged followers expected at this year’s Bitcoin Conference.

“A lot of these people consider themselves single-issue voters,” said tech writer Jacob Silverman, author of the best-selling book “Easy Money: Cryptocurrency, Casino Capitalism, and the Golden Age of Fraud.” “If Trump or anyone else says they’re pro-bitcoin, that matters to them.”

A volatile industry

Since Trump voiced his opposition to bitcoin in 2019, the volatile industry has only faced more turbulence, most notably the arrest, trial and imprisonment of Sam Bankman-Fried, the founder of the cryptocurrency exchange FTX. Once the face of a company that counted comedian Larry David and superstar quarterback Tom Brady among its celebrity endorsers, Bankman-Fried was sentenced in March to 25 years in prison for running a multibillion-dollar fraud scheme through his companies.

Trump’s campaign would not say what sparked the former president’s 180-degree turn on bitcoin. Nor has Trump addressed one of the central criticisms of digital currencies: a lack of a practical, real-world use for it besides being a highly speculative investment. His appearance at the Nashville convention will be followed by a more traditional campaign event in St. Cloud, Minnesota, later in the day.

Trump campaign spokesman Brian Hughes said in a statement to CNN that “crypto innovators and others in the technology sector are under attack” from Democrats, while the former president was “ready to encourage American leadership in this and other emerging technologies.”

Republican allies have joined Trump in his pivot toward bitcoin. Speaking at the conference on Friday, South Carolina Sen. Tim Scott argued that the former president understands their concerns about financial freedom – a common refrain in the crypto community.

“We want people, whether they love their dollars or they love their digital assets, we want them in charge of making their decisions,” Scott said.

Leaders in the industry have courted Trump for months and have been educating his campaign on their policy agenda and the opportunity to sway voters on the topic, David Bailey, the CEO of bitcoin-focused media company BTC Inc, said in a recent interview.

Their pitch, Bailey acknowledged, included “the amount of industry backing he can get” by embracing cryptocurrency. Their conversations included a meeting earlier this summer with Trump at Mar-a-Lago.

“Everything rapidly accelerated at that point,” said Bailey, whose company hosts the annual conference where Trump will speak Saturday.

Indeed, support for Trump quickly followed. Billionaire crypto tycoons Tyler and Cameron Winklevoss each pledged to donate $1 million worth of bitcoin to Trump’s campaign. The Federal Election Commission has allowed political committees to receive bitcoin as contributions since 2014, the value of which is determined by the price at the time the contribution is received.

Cryptocurrency was also a topic of discussion during a recent fundraising blitz through Silicon Valley that Trump’s new running mate, Ohio Sen. JD Vance, helped arrange. Billionaire tech entrepreneur David Sacks, a prominent champion of cryptocurrency, hosted one of the fundraisers at his home.

“One of the things I think we heard a lot at that dinner was just the difficulty that people in business were having under this Biden administration,” Sacks said in a recent episode of his “All-In” co-hosted podcast. “You got the crypto guys who just want a framework. They just want the government to tell them how to operate, and they can’t get that.”

Getting political

Leaders and champions of the industry have become increasingly political, helping to bankroll super PACs that have overwhelmingly supported Republicans over Democrats.

“It’s time for the crypto army to send a message to Washington,” Tyler Winklevoss wrote in a lengthy social media post endorsing Trump. “That attacking us is political suicide.”

Eric Soufer, a political adviser to major crypto companies, said people committed to cryptocurrencies who were pushed out of rooms of power after the Bankman-Fried episode are “looking for political validation after years in the wilderness.”

“They believe now is their moment, and it’s hard to resist someone who is telling them everything they want to hear,” Soufer said.

The cryptocurrency industry has experienced a resurgence since the downfall of FTX. After cratering in 2022, the price of bitcoin has recovered and reached an all-time high in June. Enthusiasm around this year’s Nashville event was palpable inside the Music City Center. Independent presidential candidate Robert F. Kennedy Jr. also addressed the conference Friday.

Still, many Americans have expressed concern about cryptocurrency even as more people become aware of it. A 2023 Pew Research survey found nearly 9 in 10 adults had heard of cryptocurrencies and 75% of those people didn’t believe it was safe or reliable.

But Trump’s courtship of crypto voters is in line with other efforts to find new support in unconventional places. Earlier this year, Trump reached out to Libertarian Party members at their annual convention, where he promised to “support the right to self-custody to the nation’s 50 million crypto holders.” There’s considerable overlap between Libertarians and the crypto community.

Trump supporters were not hard to find inside the Bitcoin Conference. John Fischer, a 61-year-old from Atlanta, has personally invested in cryptocurrency since 2021. He voted for Trump in 2020 and plans to again.

Still, he was clear-eyed about Trump’s attempts to court conference attendees.

“Every politician is going to be pro-something if they’re going to get votes,” Fischer said.

Luke Broyles, a 25-year-old Michigander working in the crypto industry, was similarly unsure of Trump’s latest entreaties despite his recent rhetoric.

“I think there is a good bit of skepticism that bitcoin people have,” Broyles said. “I think that’s reasonable. Ultimately, people are in bitcoin because they don’t trust politicians.”