From "crypto scam" to "make Bitcoin great again", what caused Trump's attitude to change suddenly?

Original title: Trump Became Crypto Believer After Falling in Love With NFTs of Himself

Original author: Olga Kharif, Stephanie Lai, David Pan, Teresa Xie, Bloomberg

Original translation: Baishui, Golden Finance

 

This was supposed to be a cryptocurrency conference, but it could easily be mistaken for a Trump rally.

 

At an event where vendors hawked red hats that read "Make Bitcoin Great Again," the crowd burst into applause when Donald Trump vowed to fire SEC Chairman Gary Gensler and replace him with a regulator who loves the digital asset industry if he returns to the White House.

 

“I promise the Bitcoin community that the day I’m sworn in, the anti-crypto campaign of Joe Biden, Kamala Harris, will be over,” Trump said at the Bitcoin 2024 conference in Nashville on Saturday, likening cryptocurrency to the steel industry a century ago. “If Bitcoin is going to the moon,” he added, “I want America to be the country that leads the way.”

 

The speech marked a radical shift in the former president’s stance on the asset class, which he viewed as a crime-ridden scam during his tenure. It also marked the growing merger of a once-outsider political machine with an outsider financial movement that is also struggling to enter the mainstream.

 

Donald Trump speaks at the Bitcoin 2024 conference in Nashville on July 27. Trump was once a cryptocurrency critic, but his tune has changed since he started selling NFTs. Photographer: Brett Carlsen/Bloomberg

 

Conventional wisdom holds that this strategy is just classic Trumpian trading. He needs votes and money in a presidential race that now looks like it will be a close one, and he’s taking advantage of the opportunity created by President Biden’s administration alienating the crypto crowd by cracking down on the industry.

 

If so, it’s working.The cryptocurrency ecosystem’s public profile, dominated by well-funded cyber warriors, has provided fertile ground for Trump to reap tens of millions of campaign dollars and a growing army of loyal fans.His newfound role as an industry cheerleader has helped him secure endorsements from the likes of Dogecoin enthusiast Elon Musk, billionaire twins Tyler and Cameron Winklevoss, and venture capitalists Marc Andreessen and Ben Horowitz.

 

“As the Bitcoin conference demonstrated, President Trump wants our country to reclaim its place as a global leader in technology, innovation, and manufacturing,” said Brian Hughes, a senior campaign adviser. “That includes crypto and other areas.”

 

All the donations and noise in the crypto space have not gone unnoticed by the other side. Bitcoin fans on X circulated a letter purportedly signed by more than two dozen Democratic lawmakers and candidates. The letter, addressed to the party’s national committee, urges a softer stance on digital assets.

 

Yet while Trump is enjoying all the newfound support, something else has played a major role in Trump’s transformation into a crypto believer: polishing his own image. In short, he fell in love with Trump-themed non-fungible tokens — and the supporters who bought them — and that enthusiasm has translated into a broader appreciation for the industry, according to insiders who have been following the evolution of Trump’s cryptocurrency.

 

Trump’s questions about digital asset valuations haven’t slowed his NFT sales pitch, as was evident in May when he gave an impromptu gathering of supporters at Mar-a-Lago who bought at least 47 digital trading cards — pop art renderings of the former president, including images of him dressed as cowboys, superheroes and other fantasy characters.

 

They were selling for $99 each, but Trump wondered aloud whether he could buy more.

 

“There’s a big difference between $99 and $499, $599, maybe even $1,000, I don’t know,” he told the crowd, according to a video of the event, which was held on a break from his hush money criminal trial in New York. “But I don’t want to do that. I want to leave it. Now, no one is going to believe it, they’re going to say, ‘Oh, this guy is talking nonsense.’ ”

 

Not long ago, Trump himself criticized cryptocurrency promoters for talking nonsense, accusing Bitcoin and other tokens of facilitating crime and criticizing valuations during his presidency as “coming out of thin air.” However, between that tweet and when he and his wife Melania began selling NFTs, Trump changed his mind.

 

“Trump’s NFTs really put him in front of the crypto crowd for the first time,” said Kristin Smith, CEO of the Blockchain Association, a trade group that has been one of the liaisons between the Trump campaign and the cryptocurrency industry.

 

For an industry beset by scandal and facing a near existential threat amid a deluge of government legal action, Trump’s erratic back-and-forth on cryptocurrency has perhaps made him one of the superheroes of NFTs. And for Trump, the topic gives him another entry point into attacking his Democratic opponents — an uneven one given the industry’s enthusiasm for get-out-the-vote campaigns and unprecedented related fundraising numbers. The pro-cryptocurrency Fairshake PAC and two allied super PACs have raised $170 million in the current round, even as they focus on congressional races and donate to both parties.

 

Trump’s symbiotic relationship with the industry was on display in Nashville: As cryptocurrency fans cheered the prospect of a friendlier regulatory environment, Trump solicited big donations from them. He charged $844,600 for seats at a cryptocurrency “roundtable” and $60,000 per person — $100,000 per couple for a photo op.Mike Belshe, CEO of the cryptocurrency company BitGo, will host a fundraiser in Palo Alto, California, on Monday to raise more money.

 

For all the crypto celebrities hobnobbing with Trump these days, there are some lesser-known figures who deserve credit — or blame — for being his guides into the strange rabbit hole that is digital assets.

 

The first is Bill Zanker, founder of the adult education company The Learning Annex and co-author of the 2007 book "Think Big and Kick Ass with Trump." Zanker said he is a longtime friend of Trump and had invited Trump to be a speaker at the Learning Annex.

 

Zanker said in an interview that he approached Trump about two and a half years ago to pitch him an idea: NFT artwork featuring cartoons of the former president. Zanker recalled that Trump was interested but didn't want to call them NFTs.

 

"I wanted to call them digital trading cards on a computer," Zanker said Trump told him. “If you call them NFTs, people just don’t understand.”

 

Then came the collapse of Sam Bankman-Fried’s FTX exchange and a string of other industry bankruptcies in 2022 — a sequence that claimed millions of victims and led to a crackdown on the industry by the Biden administration.In December 2022, in the middle of what he calls “crypto winter,” Zanker came to Mar-a-Lago and asked, “Mr. President, do you still want to do this?” He said, “Bill, you know, a lot of my friends say I shouldn’t do this. But I like it, so let’s do it.”

 

 

Trump’s role in the project was far from passive. “Every picture, he approved,” Zanker said. “He spent hours studying it. He loved it. He called it pop art,” he said, adding that the project inspired Trump to spend time studying cryptocurrencies, asking a lot of questions and helping him understand topics like how the Ethereum blockchain works.

 

According to Zanker, the NFTs were a huge success, with each new collection selling out within hours. Two subsequent events at Mar-a-Lago, one late last year and one in May, saw Trump meet and greet buyers.

 

“He fell in love with this crowd: young, ambitious, unregulated,” Zanker said. “Someone asked him, ‘What do you think of crypto?’ He said, ‘I like it, and I don’t like it all going overseas.’ Of course, the crowd went wild.”

 

At one point, the topic of accepting campaign contributions in the form of crypto came up, and Trump called his friend to the stage.

 

“‘Zanker, should we accept crypto donations?’ ” Zanker recalled Trump asking. “I said yes. He became the crypto president.”

 

So far, the campaign says it has raised more than $4 million in cryptocurrency donations, in addition to millions in traditional donations from industry supporters. The Trump trading card NFTs (nearly 200,000 in total, spread across three collections) have generated more than $20 million in revenue for Trump and his partners, according to Zunk, but he declined to say how the revenue was divided up.

 

After the NFT event, the industry’s pursuit of Trump — and his pursuit of potential donors who have become rich through cryptocurrency — has continued to grow.

 

The next big event was in the Tea Room at Mar-a-Lago in June, where Trump and his guests ate cookies and attracted a small crowd of executives from crypto miners, the companies whose massive, high-tech data centers facilitate transactions on blockchains in exchange for payments in bitcoin or other cryptocurrencies.

 

“We talked about how to get bitcoin users involved in the political process,” said Brian Morgenstern, director of public policy at miner Riot Platforms Inc., who worked at the White House and Treasury Department during the Trump administration. “If you’re not engaged, if you’re not talking to the candidates, you can’t change policy.”

 

Trump certainly got involved. At the meet-and-greet with the miners, he became an avid supporter of cryptocurrency, posting on his Truth Social account that he wants all remaining Bitcoin to be “made in the USA!!!” and saying that Bitcoin mining could be “our last line of defense against CBDCs.” That’s a reference to central bank digital currencies, the monetary authority’s answer to cryptocurrencies, which have yet to make it to the research stage in the U.S. Critics of CBDCs warn that they could be used as a surveillance tool because they make it easier for government authorities to track money flows. Of course, they also pose stiff competition to crypto stablecoins, which track the value of the dollar and other fiat currencies.

 

A Satochip crypto wallet on display at the Bitcoin 2024 conference, with photos taken after Trump’s assassination. Photographer: Brett Carlsen/Bloomberg

 

Trump’s circle of cryptocurrency advisers has expanded, and he has leaned on billionaire Tesla CEO Elon Musk to advise on the industry. His former opponent in the Republican primary, entrepreneur Vivek Ramaswamy, also said he had discussed potential cryptocurrency policy with Trump.

 

On Capitol Hill, he has found cryptocurrency believers among Republican allies. Tennessee Sen. Bill Hagerty, who attended a Mar-a-Lago meeting with miners and a Bitcoin conference in Nashville in June, has become a Trump campaign surrogate when it comes to cryptocurrency.

 

The cryptocurrency industry took center stage at the Republican National Convention in Milwaukee earlier this month, with Wisconsin Rep. Brian Steyer taking part in a discussion about cryptocurrencies at a blockchain conference and Haggerty lending a voice to the industry during a panel on manufacturing.

 

“We have to get the bureaucracy in Washington, D.C., back in place and back within bounds, and what we’ve seen is agencies overstepping their authority and creating uncertainty here — uncertainty that has a very negative impact on capital investment,” Haggerty said.

 

Just outside the secure perimeter of the Republican National Committee, supporters handed out paper fans promoting MAGA memecoin, a cryptocurrency project that has recruited Trump ally Roger Stone as a partner.

 

The fans are the latest sign that Trump and the culture surrounding him have become a staple for traders of memecoin, one of the tokens that offers the least crypto innovation but is at the greatest risk of becoming the target of pump-and-dump schemes.

 

MAGA is the largest Trump-related memecoin, with a total market cap of more than $300 million, according to tracker CoinGecko. The tokens have no official connection to Trump, but that hasn’t stopped them from growing in popularity. The team at memecoin platform Pump.fun noticed that more than 2,000 Trump-related tokens were created on July 13 alone, following the assassination attempt on the former president.

 

Of course, there are political risks to Trump being so closely associated with this notorious asset class if there’s another FTX-like situation, or simply a price drop that sours market sentiment. However, the risks of the cryptocurrency industry itself being so ideologically aligned with the Republican Party may be greater, said Hilary Allen, a professor at American University’s Washington College of Law whose research focuses on financial law.

 

“It could alienate some users because crypto is inherently a very ideological investment,” she said. “It could increase appeal to Republican users, but it could alienate Democratic users.”

 

The Trump Trading Cards website advertises real-world benefits of NFT purchases, including a physical trading card featuring a fragment of the suit he wore when posing for a police photo in Fulton County, Georgia, on August 24, 2023. Source: collecttrumpcards.com

 

Only time will tell if Trump wins a second term and brings the more favorable regulatory environment the industry wants. Current bets on Polymarket, a cryptocurrency-based platform that allows people outside the United States to bet on political outcomes, put Trump’s chances of winning at 57%.

 

If he wins, friendly regulators may not be his only gift to the industry.

 

In Nashville, Trump said he would order the government not to sell cryptocurrency seized in criminal cases, but to use it as the basis for his so-called strategic Bitcoin reserve. However, Bitcoin gave up its pre-speech gains after Trump did not confirm plans to order the government to buy up to 1 million coins, an announcement his opponent, Robert F. Kennedy Jr., said at a conference on Friday that Trump might make. The original cryptocurrency rose again on Monday, approaching the $70,000 level for the first time since mid-June.

 

Meanwhile, even amid a busy campaign schedule, Trump is planning his next moves for his crypto ventures.

 

A fourth Trump NFT series is in the works, and Zanker expressed hope that it would be available in August, promising that it would be the "biggest and best series ever" with "a lot of surprises." (Some past purchases have included real-world perks, like a Mar-a-Lago reception or the suit Trump wore when he was photographed in a mug shot during the Georgia election fraud scandal.)

 

“We met with him before the assassination attempt to have him approve the artwork,” Zanke said. “He looked at every single one of the pictures.”

 

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