Trump becomes a Cryptocurrency believer, starting with his issuance of Non-fungible Tokens

Authors: Olga Kharif, Stephanie Lai, David Pan and Teresa Xie, Bloomberg

Compiled by Luffy, Foresight News

This was supposed to be a Cryptocurrency conference, but it’s easy to mistake it for a political rally for Trump.

In an event where vendors were selling hats with the words ‘Make BTC Great Again’ MAGA, the crowd erupted in applause when Donald Trump vowed to fire Gary Gensler, the Chairman of the US Securities and Exchange Commission, once he returns to the White House, and appoint a regulator who is passionate about the encryption industry to replace him.

During the BTC 2024 conference held in Nashville on Saturday, Trump said, “I assure the BTC community that on the day I take office, Joe Biden and Kamala Harris’ anti-cryptocurrency movement will come to an end.” Trump compared cryptocurrency to the steel industry a century ago. He added, “If BTC is going To The Moon, I hope the United States becomes the country leading this wave.”

This speech marks a complete shift in the former president’s stance on cryptocurrency. During his tenure, he once believed that cryptocurrency was rampant eyewash. This also marks an outsider who was once outside the political and financial movements, trying to enter the mainstream.

On July 27, Donald Trump spoke at the BTC 2024 conference in Nashville. Trump, once a critic of cryptocurrency, has changed his attitude since starting to sell Non-fungible Tokens. Photographer: Brett Carlsen/Bloomberg

The traditional view is that this is just a typical Trump-style transactional relationship. In the presidential election, he needs votes and money, and now it seems to be a close contest. Trump is rallying a group of people who have been alienated by the Biden administration’s crackdown on the cryptocurrency industry.

If so, then it has already succeeded. The public image of the Crypto ecosystem is dominated by network warriors with a large amount of funds, who have provided tens of millions of dollars in campaign funds for Trump, as well as an increasingly loyal fan base. Trump has gained support from DOGE enthusiasts Elon Musk, billionaire Winklevoss brothers, and venture capitalists Marc Andreessen and Ben Horowitz.

However, despite receiving support from the encryption industry, there were other factors that played a significant role in Trump’s transformation into a Cryptocurrency enthusiast. He fell in love with Non-fungible Tokens (NFTs) themed after himself, as well as the supporters who purchased these Tokens. Trump has always had doubts about the valuation of encryption assets, but this did not affect his sales and promotion of his own Non-fungible Tokens. This was evident in May of this year when he spontaneously improvised at a supporter gathering at Mar-a-Lago, where these supporters purchased at least 47 digital trading cards - pop art renditions of the former president, including images of him dressed as a cowboy, a superhero, and other characters. They were priced at $99 each.

Not long ago, Trump himself also criticized the promoters of Cryptocurrency, accusing BTC and other Crypto of promoting crime. During his presidency, he believed that the value of Cryptocurrency was ‘out of thin air’. However, he had changed his mind when Trump and his wife started selling Non-fungible Tokens.

“Trump’s Non-fungible Token did indeed put him in front of the Cryptocurrency community for the first time,” said Kristin Smith, CEO of the Blockchain Association, an industry trade group that has served as a liaison between the Trump campaign and the Cryptocurrency industry.

For an industry plagued by scandals and facing an existential threat under heavy legal action by the government, Trump’s flip-flopping on the issue of cryptocurrency may have made him a superhero in the world of NFTs. For Trump, the issue has provided him with another wedge issue to attack his Democratic opponents - an imbalanced one, given the enthusiasm of the encryption industry for his campaign and unprecedented fundraising amounts. This round, the Fairshake PAC and two allied super PACs supporting Cryptocurrency have raised $170 million, despite their promises to focus on congressional races and donate to both parties.

The symbiotic relationship between Trump’s encryption industry is evident in Nashville: as Crypto fans cheer for a more friendly regulatory outlook, they have contributed large donations to Trump. At the Crypto ‘roundtable’ he participated in, the fee for a seat was $844,600, while a photo cost $60,000 per person, and a couple was charged $100,000. On Monday, Mike Belshe, CEO of Crypto company BitGo, will host a fundraising event in Palo Alto, California to raise more long funds.

Despite the fact that almost all the celebrities in the encryption currency world have some dealings with Trump, there are still some less well-known figures that cannot be ignored. They are the guides for Trump to enter this strange XTZ hole of encryption assets. The first is Bill Zanker, the founder of the adult education company The Learning Annex, and one of the authors of the 2007 book Think Big and Kick Ass with Trump. Zanker said that he is an old friend of Trump and once invited Trump to be a speaker at Learning Annex.

Zanker said in an interview that about two and a half years ago, he had contacted Trump and pitched him an idea: NFT artworks based on the former president’s cartoons. Zanker recalled that Trump was interested but didn’t want to call them NFTs. ‘I want to call them digital trading cards on computers,’ Trump told him. ‘If you call them NFTs, people won’t understand.’ Subsequently, the closure of SBF’s FTX exchange and a series of bankruptcies in 2022 led to a severe crackdown by the Biden administration on the encryption industry. During the ‘Cryptocurrency Winter’ in December 2022, Zanker went to Mar-a-Lago and asked, ‘Mr. President, do you still want to continue?’ He said, ‘Bill, you know, many of my friends say I shouldn’t do this. But I like it, so let’s do it.’

Digital Card MugShot Edition released, each priced at 99 dollars. Source: collecttrumpcards.com

Trump was by no means a passive participant in the project. ‘He approved every photo,’ Zanker said. ‘He spent hours working on it. He loved it and called it pop art,’ Zanker added. The project made Trump take the time to study cryptocurrencies, asking many questions that helped him understand the workings of the Ethereum blockchain and more.

According to Zanker, Non-fungible Tokens have been a great success, with each new series selling out within a few hours. Subsequently, Trump held two events at Mar-a-Lago, one at the end of last year and another in May this year, where he met with Non-fungible Token buyers. Zanker said, ‘He fell in love with these people: young, ambitious, unregulated. Someone asked him, ‘What do you think of Crypto?’ He said, ‘I like it, I don’t want it all going overseas.’ The crowd went crazy.’

Once, people talked about accepting campaign donations in the form of Cryptocurrency. Trump called his fren, ‘Zanker, should we accept Cryptocurrency donations?’ Zanker recalled, ‘I agreed.’ So he became the Cryptocurrency president. So far, the Trump campaign team has raised over $4 million in Cryptocurrency donations, as well as millions of dollars from industry supporters. According to Zanker, the Trump card Non-fungible Tokens (nearly 200,000 cards divided into three series) have brought in over $20 million in revenue for Trump and his partners, but he refused to disclose how these revenues are allocated. The Trump campaign team has not commented further on this.

After the Non-fungible Token event, the industry’s support for Trump and his continued efforts to woo potential donors in the encryption industry are heating up.

The next major event is in June at the tea house in the Sea Lake Manor, where Trump and his guests are eating cookies. The event attracted a small group of encryption mining executives.

“We discussed how to involve BTC users in the political process,” said Brian Morgenstern, Director of Public Policy at Riot Platforms Inc., who previously worked at the White House and the Treasury Department during the Trump administration. “If you don’t participate, if you don’t engage with candidates, you can’t change policy.”

Trump must have been involved. At a meeting with mining companies, he became a passionate “cheerleader” for Cryptocurrency, and posted on his own Truth Social account that he hopes all remaining BTC will be “made in the USA!!!”, and suggested that BTC Mining may be “our last line of defense against CBDC (Central Bank Digital Money)”. Critics of CBDCs warn that they could be used as surveillance tools, as they make it easier for government authorities to track the flow of funds. Of course, they also bring fierce competition to Stable Coin anchored to the US dollar.

BTC 2024 exhibition showed the Satochip encryptionWallet, including photos taken after Trump’s assassination. Photographer: Brett Carlsen/Bloomberg

Donald Trump’s Cryptocurrency advisory circle has expanded. Billionaire Elon Musk often offers advice to the encryption industry. Vivek Ramaswamy, Trump’s former opponent in the Republican primaries and an entrepreneur, also said that he had discussed potential Cryptocurrency policies with Trump.

On Capitol Hill, he found Cryptocurrency believers among his Republican allies. Tennessee Senator Bill Hagerty attended the mining enterprise conference held at the Sea Lake Manor in June and the BTC conference held in Nashville. He has become a representative for Trump on the issue of Cryptocurrency.

Earlier this month, the encryption industry took center stage at the Republican National Convention in Milwaukee, Wisconsin. Wisconsin Congressman Bryan Steil participated in a blockchain conference discussing Cryptocurrency, while Hagerty spoke for the industry in a panel discussion on manufacturing.

Hagerty said, “We must restore the bureaucracy in Washington, D.C. to its original state, redefine boundaries. What we see is that various agencies have exceeded their jurisdiction, causing uncertainty, and uncertainty has a very negative impact on capital investment.”

Outside the security cordon of the Republican National Committee, supporters distributed paper fans promoting MAGA memecoin, an encryption project that has recruited Trump ally Roger Stone as a partner. Trump has become the focus of memecoin traders’ follow, and memecoin is the least innovative but most speculative category of Token.

According to CoinGecko, MAGA is the largest memecoin associated with Trump, with a total market capitalization of over 300 million US dollars. These tokens have no official connection to Trump, but that hasn’t stopped them from becoming popular. The Pump.fun team, a memecoin platform, noticed that over 2,000 Trump-related tokens were created just after the July 13th shooting incident involving Trump.

Of course, if a situation similar to FTX were to arise again, or if a price drop were to cause a deterioration in market sentiment, there would be political risks associated with Trump’s close association with this notorious asset class. However, Professor Hilary Allen from the American University Washington College of Law, who specializes in financial law research, suggests that the risk of the encryption industry being ideologically aligned with the Republican Party may be even greater.

“Given that Cryptocurrency itself is a very ideological investment, this may alienate some users,” she said. “This could increase the appeal to Republican users, but on the other hand, it may alienate Democratic users.”

The Trump Trading Card website promotes real-world benefits of purchasing Non-fungible Tokens (NFTs), including a physical trading card featuring a fragment of the suit he was wearing when arrested in Fulton County, Georgia on August 24, 2023. Source: collecttrumpcards.com

Only time will tell if Trump will win his second term and bring a more favorable regulatory environment for the encryption industry. Currently, bets on Polymarket indicate a 57% probability of Trump’s victory. Polymarket is a platform based on Cryptocurrency that allows users outside the United States to bet on political outcomes.

Friendly regulators may not be the only gift from Trump’s victory.

In Nashville, Trump said he would order the government not to sell the Cryptocurrency seized in criminal cases, but to use it as the basis for a so-called strategic BTC reserve. However, BTC gave back its gains before the speech, as Trump did not confirm plans to order the government to buy up to 1 million Tokens. His opponent, Robert F. Kennedy Jr., said on Friday at a meeting that Trump might announce this news.

Meanwhile, even in the midst of a busy campaign schedule, Trump is planning his next move for his Cryptocurrency project.

The fourth trap Trump Non-fungible Token series is in preparation, and Zanker hopes it will be listed in August, promising that it will be “the best Non-fungible Token series ever” and will “bring a lot of surprises”.

“We saw him before the shooting, asked him to review the artwork,” Zanker said, “He looked at every photo.”