Donald Trump's vow to ensure all remaining Bitcoin is "Made in America" faces an uphill battle

Donald Trump's vow to ensure all remaining Bitcoin is "Made in America" faces an uphill battleAs Donald Trump prepares to fulfill a long list of campaign promises, his pledge to ensure all remaining Bitcoin is "Made in America" may prove to be one of his most challenging. The commitment was announced on his TruthSocial account following a June meeting at Mar-a-Lago with executives from a group of crypto mining companies

Donald Trump's vow to ensure all remaining Bitcoin is "Made in America" faces an uphill battle

As Donald Trump prepares to fulfill a long list of campaign promises, his pledge to ensure all remaining Bitcoin is "Made in America" may prove to be one of his most challenging. The commitment was announced on his TruthSocial account following a June meeting at Mar-a-Lago with executives from a group of crypto mining companies. These firms operate large, high-tech data centers, earning Bitcoin or other cryptocurrencies as compensation for processing transactions on the blockchain. The meeting marked a significant shift for Trump, transforming him from a crypto skeptic into one of the industry's most powerful advocates.

"It's a classic Trumpian comment, but it doesn't match reality," says Ethan Vera, chief operating officer of Seattle-based Luxor Technology, which provides software and services to miners. While widely viewed as a symbolic endorsement, it's practically impossible to achieve because the blockchain is a decentralized network; no single entity can control or prevent others from participating.

Indeed, the field is becoming increasingly competitive, with large-scale operations springing up globally to vie for billions of dollars in annual industry revenue. Russian oligarchs and Dubai royalty are among the recent entrants. Deep pockets and access to vast amounts of electricity are fueling their involvement in this lucrative yet energy-intensive process.

Approximately 95% of the eventual 21 million Bitcoins expected to be created have already been mined, but based on the hard cap, full mining is still projected to take roughly another 100 years. In the past few years, U.S. Bitcoin mining has blossomed into a multi-billion dollar industry as the price of the coin has grown exponentially. However, according to industry analysts, the total hash rate from U.S. miners is far below 50%, and domestic companies cant fully support the entire network.

While there's no publicly available data showing the hash rates origin by region, large crypto mining service providers like Luxor often have a good understanding of the makeup. They aggregate mining power through software to improve miners' chances of winning Bitcoin rewards, giving them more granular information about mining locations.

U.S. miners such as CleanSpark Inc. and Riot Platforms Inc. quickly voiced their support for Trump, hoping the former president would ease scrutiny of the energy-intensive processs environmental impact, curb overseas competition, and reverse what they viewed as restrictive guidelines under the Biden administration. Trump's Bitcoin endorsement helped him raise roughly $135 million in campaign contributions during the last election cyclethe largest amount from any single industry.

Despite rapid expansion in the U.S. market and a recent crypto bull run, overseas miners have further expanded their operations due to U.S. economic sanctions and inflation in certain emerging economies. "There are several different markets that are going to see huge growth," says Taras Kulik, CEO of Synteq Digital, one of the largest brokers of Bitcoin-specific computers. Kulik notes, Increased demand from Eastern European countries like Kazakhstan, alongside rising sales in Asia, Africa, and the Middle East." Russia's more relaxed stance on Bitcoin, according to Kulik, has also fueled a resurgence of the industry there.

For some African and South American countries, Bitcoin minings profit margins are significantly higher than those of their U.S. counterparts. Parts of Africa have inexpensive energy supplies; Ethiopia, with its abundant hydropower resources, is one of the continent's fastest-growing Bitcoin mining hubs. Dollar-denominated mining revenue provides a way for local operators in countries like Argentina to avoid inflationary spirals and protect their savings.

Even U.S. miners are beginning to expand overseas as electricity costs in states like Texas rise. Marathon Holdings Inc., one of the largest mining companies by market capitalization, announced plans to form a joint venture with a local company owned by a sovereign wealth fund in Abu Dhabi. This venture aims to establish one of the largest mines in the Middle East.

Operations within the U.S. aren't solely serving domestic miners either. Many miners offer hosting services where individuals, whether American or overseas, can purchase machines and pay these operators to run them to earn Bitcoin.

Trump might also present another headwind for U.S. miners: trade conflicts could increase the cost of Bitcoin mining machines, particularly since machines are one of the two main expenses for miners, in addition to electricity.

But for many miners, the benefits from Trump outweigh the drawbacks. "Trump is possibly the best thing to ever happen for Bitcoin mining," Kulik says. "He's a pro-energy, pro-economic growth type of president."

Trump's promise faces fundamental challenges from the decentralized nature of the blockchain and intensifying global competition. While he may provide some short-term benefits for U.S. miners, such as regulatory relief, his goal of making all remaining Bitcoin "Made in America" seems improbable. This is due not only to the realities of hash rate distribution but also to the global hunt for low-cost energy and favorable regulatory environments. Even U.S. mining companies are actively pursuing overseas expansion to seek higher profit margins and lower operating costs. Therefore, Trump's pledge is less a feasible policy objective and more a political gesture to his supporters. Ultimately, Bitcoin's decentralized nature will continue to drive its globalization, making Trump's goal unattainable. While he may support the U.S. cryptocurrency industry through other avenues, confining Bitcoin mining entirely within U.S. borders remains a distant prospect. This reflects the complex interplay of technological advancements and global economic forces, exceeding the influence of any single political figure.