Trump's promise to make the US a 'Bitcoin superpower' is unlikely to be realized, industry observers say

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Former President Donald Trump's campaign promise to ensure that all remaining Bitcoin is mined in the U.S. is likely to remain unfulfilled, industry observers have told Bloomberg News.

“It is a Trump-like comment but it is definitely not in reality,” Ethan Vera, chief operating officer at Seattle-based Luxor Technology, which provides software and service to cryptocurrency miners, told the outlet.

Bitcoin is created through a process known as mining, in which operations use high-powered, fuel hungry computers to solve complicated math problems used to validate transactions in the network and post them to a public ledger, known as the blockchain.

Crypto mining companies who solve these problems first are rewarded with payment, including in Bitcoin itself, a currency whose overall supply is currently capped at 21 million coins, not all of which have been issued.

But several obstacles stand in the way of Mr Trump's goal to ensure that all remaining Bitcoin is mined in the U.S.

Bitcoin mining is distributed across the world, especially in regions with access to cheap and abundant energy to power the data centers used to mine crypto.

According to the U.S. government's Energy Information Administration, less than half of all crypto mining currently takes place in the U.S.

Aside from offering favorable regulation and energy prices to entice operators in the decentralized currency to relocate to the U.S., there is little Mr Trump can do to alter this distribution.

However, it is unclear how successful this approach would be or how long it would take.

Furthermore, a trade war with China, as Mr Trump has proposed, would drive up costs in the U.S., as most miners use Chinese-made computers.

Despite this, the Trump campaign actively courted the crypto industry throughout his 2024 campaign, promising to make the U.S. a “Bitcoin superpower,” with the government even buying a strategic reserve of cryptocurrency, despite Mr Trump once dismissing crypto as “based on thin air.”

Mr Trump also pledged to fire Securities and Exchange Commission Chair Gary Gensler, who is seen as an adversary by the industry.

In September, Mr Trump even launched his own crypto venture.

The industry, in turn, has lavished support on the Trump campaign.

It donated over $200m to Mr Trump and his allies, with contributions coming from firms involved in crypto, such as Ripple, Coinbase, and venture capital powerhouse Andreessen Horowitz.

Bitcoin reached a record high price in December, owing in part to optimism over the incoming administration.

Crypto exchanges Coinbase and Kraken have each donated $1m to the Trump inaugural committee.

They join inauguration donors including Amazon and Meta, as the tech industry seeks to build close ties with the new White House.

As The Independent has reported, the 2024 marked a sea change in tech politics, with many top figures in the industry, including Elon Musk, breaking from their traditional Democratic allies and throwing their support behind Republicans.