Trump's "Made in America" Bitcoin Pledge: An Impossible Mission?

Trump's "Made in America" Bitcoin Pledge: An Impossible Mission?During his campaign, then-presidential candidate Donald Trump made a series of promises, one of the most attention-grabbing and controversial being his pledge to ensure all remaining Bitcoin mining is "Made in America." However, achieving this is arguably an impossible task

Trump's "Made in America" Bitcoin Pledge: An Impossible Mission?

During his campaign, then-presidential candidate Donald Trump made a series of promises, one of the most attention-grabbing and controversial being his pledge to ensure all remaining Bitcoin mining is "Made in America." However, achieving this is arguably an impossible task.

Bitcoin's core design limits its total supply to 21 million coins. Approximately 95% have already been mined, with the remaining coins requiring roughly another 100 years to be fully extracted. Despite this, Trump publicly stated in June of this year, via social media, his plan to make Bitcoin entirely "Made in America." This commitment followed meetings with executives from several US-based cryptocurrency mining companies. These companies operate large data centers, participating in and receiving rewards from transactions involving cryptocurrencies like Bitcoin. The meeting marked a significant shift in Trump's stance on cryptocurrencies, evolving from initial skepticism to staunch support for the industry.

US mining companies such as CleanSpark and Riot Platforms quickly voiced their support, hoping for a relaxation of scrutiny on the environmentally impactful, energy-intensive mining process, suppression of competition from overseas mining companies, and a reversal of restrictive policies enacted by the Biden administration. Trump's public endorsement of the cryptocurrency industry also garnered his campaign approximately $135 million in donations, surpassing any other sector.

However, industry experts widely believe Trump's "Made in America" Bitcoin pledge is largely symbolic and practically unachievable. The Bitcoin blockchain is a decentralized network, impervious to complete control or restriction by any single entity. Global participation in Bitcoin mining is extremely dispersed. While the US Bitcoin mining industry has grown rapidly in recent years, becoming a multi-billion dollar industry, its hashing power still falls far short of half the global total. Therefore, relying solely on US companies to sustain the entire Bitcoin network is virtually impossible.

Competition in the global cryptocurrency mining industry is intensifying, with numerous large mining operators worldwide vying for market share. New entrants include Russian oligarchs and Dubai royalty. While a lack of publicly available data prevents precise allocation of hashing power by region, large cryptocurrency mining service providers like Luxor have a better understanding. Their hashing power aggregation software provides more specific location data, increasing miners' chances of earning Bitcoin rewards.

The rapid expansion of the US Bitcoin mining industry coincides with a cryptocurrency bull market, coupled with US economic sanctions against other nations and increased inflation in some emerging economies. These factors incentivize overseas miners to increase operations, leading to even fiercer competition. For example, Kazakhstan's mining demand has surged due to lower energy costs; Russia's lenient stance on cryptocurrencies has boosted its industry; and countries like Ethiopia, rich in hydropower, are becoming Africa's fastest-growing cryptocurrency mining hubs, with significantly higher Bitcoin mining profitability than their US counterparts. In high-inflation countries like Argentina, dollar-denominated mining revenue offers local miners inflation hedge. Some US miners are also expanding overseas due to rising domestic energy costs. For instance, MARA, one of the largest miners by market capitalization, announced a joint venture in Abu Dhabi with a local sovereign wealth fund to create one of the largest mining centers in the Middle East.

Furthermore, Trump's policies could present challenges for US miners. For example, his trade policies might increase the cost of Bitcoin mining equipment. Electricity and equipment are two of the largest expenses for miners.

Despite this, industry insiders generally believe Trumps overall impact on the cryptocurrency industry is more positive than negative. Taras Kulyk, CEO of Synteq Digital, stated that Trump may be "the best thing to happen to Bitcoin mining" due to his support for energy and economic growth.

In conclusion, Trump's "Made in America" Bitcoin pledge faces extremely low feasibility given the globally dispersed mining ecosystem, intensifying international competition, and the inherent decentralization of the technology. While the pledge might represent symbolic support for the US cryptocurrency industry and attract some capital inflow, putting it into practice is virtually an impossible mission. While US mining companies may benefit from Trump's support in the short term, achieving fully "Made in America" Bitcoin mining in the long term requires overcoming immense technological, economic, and geopolitical hurdles a challenge far exceeding expectations. The complexity and dynamism of the global Bitcoin mining landscape ensure that no single nation can easily dominate the network.