Crypto assets continue to make headlines and cause controversy as the 2024 Presidential race continues to escalate and heat up. In addition to candidates quickly moving in and embracing the cryptocurrency industry – former President Trump accepting cryptocurrency contributions and the Biden White House's recent moves toward the industry – efforts Legislation has accelerated. Congress, after years of inaction and deferring virtually all decision-making to U.S. regulators such as the IRS and SEC, has acted in a bipartisan manner to seek to resolve the problems without Crypto asset fraud is facing. These efforts continued, even as the White House vetoed an effort to repeal SAB 121 that attracted bipartisan support in both houses of Congress.
However, in June 2024, the efforts and offerings towards the crypto-asset sector took another significant turn. In comments made during and after meetings with leading bitcoin mining organizations in the United States, former President Trump stated his desire for all remaining bitcoins to be mined in the United States . The latest in a series of rapid-fire and more pro-crypto comments from the former President have raised questions as to 1) whether such a goal is even remotely feasible, and 2) Even if not, what does it mean? Such efforts are possible.
Let's look at some specific ways that greater interest and investment in US bitcoin mining could have a significant impact on the broader cryptocurrency market.
Mining all Bitcoin in the US will not happen
As tempting as it may sound to some to centralize mining – and by extension the hashing power and computing behind it – in the United States, the chances of this happening are relatively small. According to research by 3iQ, the United States currently boasts the highest hash rate of any country at 38%. Achieving 100% global hash rate is logistically impossible, due to the globally decentralized nature of the bitcoin blockchain, which is also a key strength of the crypto asset as it allows it to be uncensored. controlled by any government.
Additionally, the United States is the main beneficiary, in terms of hash rate, from the cryptocurrency mining ban issued by China in 2021. With Coingecko research indicating that the total bitcoin supply (21 million) will be mined by 2140, which means about 90% of the supply has already been mined based on current hash rates, the cost, logistics, and mining of all remaining bitcoins exclusively in the United States is very high . That said, there are many other ways in which this renewed (and aggressive) focus on bitcoin mining could benefit US policy decisions.
Cryptocurrencies can drive a reimagined grid
The conversation and debate surrounding America's energy grid is a contentious one, with advocates of fossil fuels and renewable energy sources finding little common ground to advance key dialogues. book. A focus on bitcoin mining and broader support for crypto assets requires a more objective conversation about US energy policy and infrastructure.
Specifically, and keeping in mind the goal of increasing the share of hash power available to US miners, the US needs to focus explicitly on increasing both energy production and energy exports . Infrastructure spending stemming from this focus will include increased fossil fuel production, LNG terminals, expansion of existing renewable energy projects and most likely an increase in plants nuclear power. Combining these efforts together, through steadily increasing supply, will reduce the largest cost for miners (electricity) while allowing for a more objective and level-headed basis for increasing Diversify America's energy supply and grid management.
Bitcoin debates will lead to greater innovation in cryptocurrencies
While the debate around crypto assets continues to focus on bitcoin's growth and role in the market, the fact remains that the crypto sector has moved far beyond bitcoin issues. Stablecoins, products and services marketed by some of the largest TradFi organizations in the world, countries actively purchasing and establishing strategic bitcoin reserves, and the potential for central bank digital currencies central government (CBDC) have dominated policy debates. However, when this happens, it is important for policymakers to write and debate policy actions that promote innovation while protecting privacy and investor protection. .
By bringing cryptocurrencies to the forefront of the 2024 Presidential race, both candidates have emphasized the increasingly important role these assets will play going forward. Simply put, and especially when it comes to stablecoins, these tools will shape the future state for how transactions and payments in dollars are conducted, even if in the United States, the conversation in the media still focuses on bitcoin and bitcoin-related issues.
Regardless of how these conversations are presented, a robust discussion and analysis of the role of cryptocurrency is a conversation worth having.
