BITCOIN miners and crypto companies that have been stonewalled in efforts to go public in the US may ultimately be the biggest winners in the digital-asset world under a second Donald Trump presidency. Foreign companies at risk of losing market share may end up being the biggest losers.
That’s the view taking hold among market participants and observers in the wake the former president’s growing embrace of crypto while the odds of his election rise.
While a poll released on Thursday by CBS News showed Trump with a majority — 52 per cent — of likely voters in a probable rematch with President Joe Biden, it is unclear who will be on the ballot in November. On Sunday, Biden said he will not seek reelection and endorsed Vice-President Kamala Harris to become the Democratic nominee.
“Almost everyone in the US would be a winner if they are willing to operate by the new rules when implemented,” said Christian Catalini, founder at MIT Cryptoeconomics Lab.
Bitcoin miners
In addition to the almost 10 per cent jump in the price of Bitcoin since Biden’s poor debate performance in June and the failed assassination attempt against the Republican nominee, the largest market reaction has been in the share prices of the companies that validate transactions on the cryptocurrency’s blockchain.
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Trump in June met with Bitcoin miners and in a subsequent post on his Truth Social account said Bitcoin mining may be “our last line of defence against a CBDC,” referring to a central bank digital currency. He added that he wants all remaining Bitcoin to be “MADE IN THE USA!!!”
Shares of Marathon Digital and Riot Platforms, two of the largest publicly-traded firms, have surged around 30 per cent in that period. Cipher Mining is up almost 50 per cent, with the firm exploring a potential sale after receiving takeover interest, people familiar with the matter said earlier.
IPO candidates
In what was likely unthinkable after the collapse of crypto markets in 2022, companies in the sector are once again making plans for initial public offerings. Circle, the issuer of the roughly US$33 billion stablecoin USDC, filed for an IPO in January after scrapping an earlier bid to go public over a year ago.
Crypto miner-turned artificial intelligence computing provider, Northern Data is mulling a US listing at the valuation of as much as US$16 billion and Kraken, the second largest US-based crypto exchange is also gearing up for an IPO.
The dealings of digital assets have been one of the key roadblocks for those companies to get a nod from the US Securities and Exchange Commission.
The agency lists a number of tokens as unregistered securities and its chair, Gary Gensler, has been criticised by high-profile crypto figures such as Coinbase chief executive officer Brian Armstrong for the crackdowns and lawsuits against crypto firms under his leadership. Trump is seen likely appointing a more crypto-friendly SEC chair.
Digital exchanges
A second Trump presidency may also lead to the banking system becoming more accepting of crypto firms. Digital-asset trading platforms have seen a dwindling pool of banks that they can tap into for the conversion between fiat currency and crypto assets. A slew of crypto-friendly banks such as Silvergate and Signature went bankrupt, further limiting crypto firms’ access to the banking services.
Offshore rivals
While most industry participants would celebrate a Trump win, a handful of companies may feel some adverse effects. Offshore crypto firms, especially trading platforms such as Binance, OKX and Deribit have enjoyed increasing market share as stringent regulation prevents US rivals from launching some of the most popular services.
For example, with more crypto-friendly regulators and clear legal framework, the US-based companies could launch trading services that offer more leverage or crypto options and futures contracts with more expiration dates.
Another loser could be a Chinese multi-billion dollar conglomerate Bitmain. The largest Bitcoin mining machines manufacturer has dominated the market and the majority of US-listed Bitcoin miners are using its rigs.
In addition to Trump’s China trade rhetoric, his ambition to make all the remaining Bitcoin in the US may spell more challenges for the company. That is especially true with US competitors such as Block and Auradine selling large amounts of new chips or machines to the mining companies.
Central bank digital currencies
The central bank digital currency, or CBDC, is an easy target for Trump. Many crypto participants see a CBDC as a way for the government to enhance financial surveillance on its citizens. Trump has vowed to never allow the dollar to be digitised. BLOOMBERG
