Trump wants the US to dominate global cryptocurrency

Former US President Donald Trump wants the country to lead in digital currency, establish a national Bitcoin reserve, and even encourage businesses to increase Bitcoin mining.

At the Bitcoin Conference - the annual Bitcoin conference in Nashville (Tennessee, USA) on July 27, former US President Donald Trump continued to affirm his support for digital currency when he said that he would make the US the world leader in this field. He also pledged to introduce friendlier regulations than Vice President Kamala Harris . Both are currently candidates of the Republican and Democratic parties in the race for the White House later this year.

"If we don't do digital currencies and Bitcoin, China and other countries will do it. They will dominate. We can't let China dominate. They've made so much progress in this area," Trump said.

Former US President Donald Trump at the Bitcoin 2024 event on July 27. Photo: Reuters

Chinese authorities have tightened controls on cryptocurrencies for years. However, people here still find ways to trade on cryptocurrency exchanges. Chinese investors also open bank accounts abroad to buy digital assets.

Trump said he would create a presidential advisory council on digital currencies, and create a national Bitcoin “reserve,” based on the Bitcoins seized by authorities in investigations. “Never sell Bitcoin. If I am elected, that will be the policy of the United States. The United States government will hold 100% of the Bitcoins it has or buy more in the future,” he said.

Trump also wants American businesses to increase Bitcoin mining. He even wants to commute the life sentence of Ross Ulbricht - the creator and operator of the Silk Road website - an online drug marketplace for Bitcoin payments.

Trump's current stance is in contrast to 2021. At that time, Trump called the cryptocurrency a "scam" and that he "didn't like it because it was created to compete with the USD."

Cryptocurrency advocates agree with Trump. They believe that the US creating a national Bitcoin reserve would be a major move in the process of legitimizing digital currencies. Jack Mallers, CEO of the Bitcoin Strike trading app, said this shows "a lot of confidence." Currently, many countries around the world, including the US, are still concerned that cryptocurrencies make it difficult for them to regulate the financial sector, increase systemic risk, create more financial crimes and cause losses for investors.

Bitcoin initially dipped after Trump’s remarks, but then rebounded. A single coin is now worth nearly $68,000, up 0.1% from yesterday. The cryptocurrency is up more than 30% since the beginning of the year.

Gold, Bitcoin surge after Biden drops out of race
Political turmoil in the US has pushed up gold prices, while Bitcoin has benefited as Donald Trump is seen as having a higher chance of winning the election.

At the opening of the trading session on July 22, world spot gold increased by 6 USD, to 2,406 USD per ounce. The precious metal increased in price due to investors' demand for shelter when the uncertainty in the US election increased.

US President Joe Biden announced on July 21 that he was ending his presidential bid "in the best interests of the country". He also supported Vice President Kamala Harris as the Democratic candidate.

Bitcoin price hit a one-month high this morning. Chart: CoinDesk

Bitcoin's price also briefly approached $68,500 per coin on the morning of July 22. This is the highest level in a month. "This development reflects investors' views that Ms. Harris cannot defeat Mr. Donald Trump in the race for the White House. Bitcoin's prospects are bright because Trump has a friendly stance towards cryptocurrencies," explained Tony Sycamore, a market analyst at IG Australia.

Last week, the world’s largest cryptocurrency also hit a two-week high after Trump’s attempted assassination, with investors still believing the incident would boost his chances of winning the election.

Meanwhile, the Dollar Index - a measure of the greenback's strength against a basket of major currencies - was almost unchanged this morning. The index fell 0.04% compared to last week's end. Compared to the yen, the USD fell 0.08% to 157.3 yen per US dollar. The Euro also rose 0.1% to 1.08 USD per EUR.

Still, Joseph Capurso, a strategist at Commonwealth Bank of Australia, said it was too early to gauge the dollar’s ​​reaction. “The key will be the polls that come out this week,” he said. If Trump has a better chance of winning, the dollar will strengthen, and vice versa.

U.S. government bond yields also rose, as investors bet that Trump's economic policies would accelerate inflation and the nation's debt. The former president's pledges to raise import tariffs could push up prices. Meanwhile, his stance on immigration restrictions would tighten the U.S. labor market, putting further pressure on wages. U.S. stock market futures also rose. The S&P 500, DJIA and Nasdaq 100 futures all rose 0.1% this morning.

In Asia, stock indexes in major markets are currently down. Nikkei 225 (Japan) is down 0.97%. Kospi (South Korea) is down 1.4%. Shanghai Composite (China) is down 0.9% and Hang Seng (Hong Kong) is down 0.3%.

This week, the world will receive other information that can affect the market. That is the financial reports of the second quarter of large companies, such as Tesla, Alphabet and General Electric. The personal consumption expenditures price index - the US Federal Reserve's preferred inflation measure - is also released.

This morning, the People's Bank of China (PBOC) cut a series of short-term and long-term reference interest rates by 10 basis points (0.1%), in order to stimulate growth. The yuan price was almost unchanged after this news.