Intrigue has returned to the US elections. With President Biden dropping out of the race, the Democrats now have the opportunity to present a candidate capable of facing Donald Trump in the final showdown.

As often, the spectacle of US politics captivates the entire world, with various stakeholders harboring their own expectations. For the Bitcoin and crypto sector, this election is probably the most significant in its history, with the topic being addresses by both political camps.

Bitcoin 2024

Generally, the Republican side is ideologically closer to Bitcoin thanks to its pro-business and pro-deregulation attitude. Donald Trump confirm it by multiplying his crypto-friendly pledges for a couple of months already. He is also rumored to deliver a “historic” message at the Nashville Bitcoin 2024 conference that will take place this Saturday.

However, there are crypto enthusiasts on the Democrat side as well, and they are not losing hope. This week, the famous businessman and crypto billionaire Mark Cuban shared with Politico that Kamala Harris might be “far more open to business, AI, crypto”. Her team has also reportedly contacted Mr Cuban with “multiple questions” about crypto. Yesterday, the Bitcoin Magazine CEO David Bailey even twitted that his team was in talks with a potential Democrat nominee to also come and speak at the conference.

With such developments, Donald Trump might be even more motivated to drop a bomb in Nashville, especially given the eagerness of the crypto crowd to donate to his campaign. At a fundraiser event scheduled on the sidelines of Bitcoin 2024, seats at a roundtable with the man himself were sold for an impressive $844,600 – the maximum donation amount permitted for individuals.

By definition, a “bomb” should be unexpected, like when the President of El Salvador declared Bitcoin legal tender (announced at Bitcoin 2021 in Miami). However, a Bitcoin advocate Dennis Porfter may have leaked Trump’s announcement details prematurely. Last Thursday, he tweeted that Trump was going to announce a  “USA Bitcoin Strategic Reserve”, information soon picked up by CNBC and Fox. Elon Musk putting laser eyes (the X symbol for crypto bulls) contributed to the mounting hype.

However, the hype can subside, and a politician’s promises can be easily forgotten. The real opportunities for crypto will start when it can be efficiently integrated into the current economic policy. While we do not know much about the future Democrat nominee’s program, we can hypothesize how Bitcoin could serve Donald Trump’s plans.

Bitcoin as a reserve asset?

Donald Trump’s “Agenda 47” – a series of proposals his campaign issued during the primary election season – is rather confusing economically. While aiming to end inflation, it also mentions several pro-inflationary policies, such as not cutting social security  “under any circumstances”, increasing spending on law enforcement, cutting taxes, introducing more tariffs on imported goods…

Speaking recently on Scott Melker’s (aka The Wolf of All Streets) podcast, Noelle Acheson, ex-Coindesk Director of Research shared her macro point of view on reconciling some of that, suggesting that weakening the dollar could be the answer.

Indeed, a big part of Trump’s base comes from the industrial heartland, and a weaker dollar, which would make US exports more competitive, could boost that region. Selling USD, i.e. increasing its supply on the market, could help weaken it, but this would also strengthen the currency it is sold against. For instance, if the US government sold USD again the Japanese Yen, Japanese exports would become pricier, complicating the battle against inflation. But what if the US government sold dollars against an asset that is not beholden to another country’s monetary policy? In this line of thought, gold is one choice, and Bitcoin is another. Furthermore, if the world’s largest economy starts buying Bitcoin, it is likely to set an example for the others to consider replacing some of their dollar reserves with Bitcoin, further amplifying the movement and increasing Bitcoin price.

The latter could also align with Trump’s business agenda. With his intention to massively scale oil production, installing Bitcoin miners on the oil fields to capture flared gas could create an important revenue stream.

So far, making Bitcoin a reserve asset seems rather far-fetched. However, the economy is about balancing a complex system of measures and countermeasures, and one could argue that adding Bitcoin into the equation would give yet another tool for calibrating it.