‘Almost’ Everyone in Crypto’s a Winner in a Second Trump Administration

(Bloomberg) — Bitcoin miners and crypto companies that have been stymied in their efforts to go public in the U.S. could be the biggest winners in the digital asset world under a second Donald Trump presidency. Foreign companies that risk losing market share could be the biggest losers.

Most Read from Bloomberg

That’s the view among market participants and observers following the former president’s increasing embrace of crypto, and his chances of winning are improving. A poll released Thursday by CBS News showed Trump with a majority (52%) of likely voters in his potential November rematch with President Joe Biden.

“When the new rules are implemented, almost everyone in the United States who is willing to comply with them will benefit,” said Christian Catalini, founder of the MIT Cryptoeconomics Lab.

Bitcoin Miners

Besides the nearly 10% increase in Bitcoin’s price following Biden’s poor debate performance in June and the failed assassination attempt on the Republican candidate, the biggest market reaction has been in the share prices of companies that verify transactions on the cryptocurrency’s blockchain.

Trump met with Bitcoin miners in June and then took to his Truth Social account to say that Bitcoin mining could be “our last line of defense against CBDC,” a central bank digital currency, adding that he wanted all remaining Bitcoin to be “MADE IN THE USA.”

Shares of Marathon Digital and Riot Platforms, two of the largest publicly traded companies, have risen nearly 30% in the period. Cipher Mining is up nearly 50% and the company is exploring a potential sale after receiving takeover interest, people familiar with the matter have previously said.

IPO Candidates

In a move that was likely unthinkable after the crypto markets crashed in 2022, companies in the sector are once again making plans for initial public offerings. Circle, the issuer of the roughly $33 billion stablecoin USDC, filed for an IPO in January after canceling an earlier bid to go public a year ago. Northern Data, a crypto mining AI computing provider, is considering a U.S. listing at a valuation as high as $16 billion, and Kraken, the second-largest U.S.-based crypto exchange, is also preparing for an IPO.

The story continues

Trading in digital assets has been one of the most significant hurdles for these companies to gain approval from the U.S. Securities and Exchange Commission. The agency lists a number of tokens as unregistered securities, and its chairman, Gary Gensler, has been criticized by high-profile crypto figures like Coinbase Chief Executive Officer Brian Armstrong for the crackdown and lawsuits against crypto companies under his leadership. Trump is likely to appoint a more crypto-friendly SEC chairman.

Digital Exchanges

A second Trump presidency could also lead to the banking system becoming more accepting of crypto companies. Digital asset trading platforms have seen the pool of banks they can tap into for conversions between fiat and crypto assets shrink. A number of crypto-friendly banks, including Silvergate and Signature, have gone bankrupt, further limiting crypto companies’ access to banking services.

Offshore Competitors

While most industry participants celebrate Trump’s victory, a handful of companies may feel some of the negative impact. Offshore crypto companies, particularly trading platforms like Binance, OKX, and Deribit, have enjoyed increasing market share due to tighter regulations that have prevented US competitors from launching some of the most popular services. For example, with more crypto-friendly regulators and a clearer legal framework, US-based companies could launch trading services that offer crypto options and futures contracts with more leverage or longer expiration dates.

Another loser could be Bitmain, a multibillion-dollar Chinese conglomerate. The largest maker of Bitcoin mining machines has dominated the market, and most U.S.-listed Bitcoin miners use its rigs. Trump’s China trade rhetoric, along with his ambition to produce all remaining Bitcoin in the U.S., could mean more trouble for the company. This is especially true if U.S. rivals like Block and Auradine sell large amounts of new chips or machines to mining companies.

Central Bank Digital Currencies

A central bank digital currency, or CBDC, is an easy target for Trump. Many crypto participants see CBDC as a way for the government to increase financial surveillance over its citizens. Trump has vowed never to allow the dollar to be digitized.

Most Read from Bloomberg Businessweek

©2024 Bloomberg LP