In recent years, Bitcoin mining has increasingly come under scrutiny for its environmental impact. Companies like Gridless have pushed a green energy mining drive. El Salvador, the only country that has made BTC legal tender, is using its volcano energy to mine the token and buying one Bitcoin per day for its national reserve.
In contrast, Trump’s promise to double the U.S. energy supply for Bitcoin mining makes no promises to protect the environment. He does not address the tension between using fossil fuels and the need for sustainable, green energy. This approach shows a classic disregard for environmental concerns.
Trump’s plan to pump up fossil fuels for mining is likely to be met with opposition from several quarters, including Congress, leftist radicals, and the crypto community itself. Prominent thinkers such as Slavoj Zizek and Yanis Varoufakis have previously questioned crypto’s claims of championing individual freedoms, considering its toll on the environment.
Recent innovations within crypto, such as the replacement of mining with staking on the Ethereum blockchain, also reflect the community’s sensitivity to the problem. Trump’s proposed extractive regime risks undermining Bitcoin’s socially progressive ethos.
Bitcoin Legislation Would Cut Both Ways
Analysts note that Trump would need to get Congress and Senate on board for a new law enabling his BTC stockpile. The bullish parade of Republicans, such as Senator Cynthia Lummis and Senator Bill Hagerty, at the Bitcoin Conference suggests that lawmakers are aligned with the initiative.
However, current activity in both houses suggests otherwise. Senators Jeff Merkley, Richard Blumenthal, Chris Van Hollen, Elizabeth Warren, and Sheldon Whitehouse, as well as Representatives Eleanor Holmes Norton, Jamie Raskin, and John Sarbanes, wrote to the Commodity Futures Trading Commission asking the regulator to finalize a rule that would ban election gambling.
The letter cited the example of Polymarket, a prediction market on the Ethereum blockchain.
“Voters need action, as proposed by the CFTC in this rule, to restore trust,” the lawmakers wrote. “Elections are not a for-profit enterprise. Without this rule, voters will wonder if their vote mattered, and whether the outcome of the election was influenced by big money bets.”
Democrats "crypto reset" is truly something to behold https://t.co/Tx1IH4Xhvd
— eric.eth (@econoar) August 5, 2024
Should he win the November election, Trump will likely not have it easy. He will face resistance from lawmakers and entrenched regulatory bodies who have yet to embrace cryptocurrency. His plan to fire SEC chairperson Gensler might be a legal nightmare.
“In terms of firing Gensler, [this] won’t happen because he is a presidential appointee approved by Congress,” Kimber, the crypto consultant, told Cryptonews. “But he [Trump] could simply appoint someone else when Gensler’s term ends in 2026, which would make him a hero in the eyes of many in the crypto community,” she added.
Can Bitcoin Be a Reserve Currency?
Some in the crypto community are not convinced that a BTC reserve would be the right move for the benchmark cryptocurrency. In a recent interview on YouTube, Jim Bianco, president of Bianco Research and former Wall Street analyst, explained that a national Bitcoin reserve could be problematic for the U.S. economy.
He said the legislation needed to create the reserve would put Bitcoin under government control and give the U.S. Federal Reserve influence on the price of the asset. This would go against the foundational principles of Bitcoin as a decentralized, alternative financial system outside the control of the establishment.
“Every time a government steps in and does something like this, they put rules on it,” Bianco said. “They’re going to decide what is the appropriate price for Bitcoin, and they’re going to sell it when it’s too high, they’re going to buy it when it’s too low, they’re gonna decide who owns it.”
This is why the #Bitcoin Strategic Reserve is a bad idea, according to @biancoresearch pic.twitter.com/b1XkmOLRB9
— David Lin (@davidlin_TV) August 5, 2024
Courage Kimber believes that using Bitcoin to prop up, or back the dollar is possible. For example, the state can have 100 satoshis (a satoshi is the smallest unit of BTC) in reserve for each dollar in circulation, like a “digital gold standard,” she says.
“However, it is not feasible to have Bitcoin as a reserve currency because of the 21 million supply cap and the inability to mint new Bitcoins,” Kimber explained. “You need to have a large supply to be a reserve currency and for it to be a medium of exchange. Bitcoin is good as a store of value but not so much as a medium of exchange…”
She suggested that Trump should instead consider adding Bitcoin to the Federal Reserve’s balance sheet. “This will show that the U.S. is progressive and looking toward the future of finance and help to secure dominance globally,” Kimber said.
However, Trump’s plans for a Bitcoin reserve are gaining traction with Senator Lummis, a known advocate for the crypto industry. On July 31, she formally introduced the Bitcoin Reserve Bill to the U.S. Senate. This bill proposes the creation of a national Bitcoin reserve and includes plans to purchase one million BTC—about 5% of the total Bitcoin supply—using U.S. Treasury funds. This would be similar to the government’s strategy on gold.
Kamala Harris’ Counter-Attack
As it turns out, Harris is not ready to cede Bitcoin to Trump. The Democratic presidential candidate recently appointed David Plouffe, who sat on the advisory board of Binance, and Gene Sperling, who was a Ripple board member, to her campaign team. This gesture coincided with calls for the Vice President to go toe-to-toe with Trump on the crypto battleground.
On Aug. 8, Harris’ campaign announced a “Crypto for Harris” initiative, which will likely take off with the support of Democrats already involved in cryptocurrency. The initiative reportedly boasts 50 members already and has been backed by prominent business people such as Dallas Mavericks co-owner and billionaire Mark Cuban and SkyBridge Capital founder Anthony Scaramucci.
On Polymarket, Harris is closing in on Trump with 48% odds, while Trump has dropped from his all-time high of 72% to 51%. Trump’s purported racist attack on Harris, which he doubled down on at the Bitcoin Conference, was attributed to this slump.
At least for now, Trump seems in a hurry to ignore the humane side of crypto for zero-sum geopolitics. His Nashville speech does not significantly depart from separatist, racist, and ecologically insensitive rhetoric. “Crypto for Harris” not only needs to voice the vice president’s support for Bitcoin but also beat Trump in articulating the potential for crypto as a tool for free speech and decentralization.