Trump’s Push for American Bitcoin Production Could Transform the Industry

Donald Trump's call for U.S. dominance in Bitcoin mining presents a significant growth opportunity, says Bernstein.

U.S. presidential candidate Donald Trump's recent advocacy for domestic Bitcoin production has the potential to significantly boost the industry, according to investment firm AllianceBernstein. Analysts at Bernstein predict that Trump's push could open up a $20 billion market for mining hardware over the next five years.

"In view of U.S. election season and Trump’s recent push to make Bitcoin in America, we believe this could be an important tailwind for the mining sector," Bernstein analysts Sanskar Chindalia, Gautam Chhugani, and Mahika Sapra noted in their Tuesday report.

Bitcoin miners, who mint new digital coins and maintain the cryptocurrency’s network, rely heavily on expensive hardware and chips, primarily sourced from China. However, Bernstein argues that new American mining hardware companies like Block and Auradine present an opportunity to diversify the mining supply chain and spark a modern-day gold rush.

“We see this as favorable for our covered U.S. Bitcoin miners, with potential to improve fleet efficiency, drive lower [capital expenditures] from lower chip pricing, and spare power capacity for AI/HPC opportunities,” the report stated.

The report also emphasized the role of American Bitcoin miners like Jack Dorsey’s Block in boosting the industry. Recently, Dorsey announced that Core Scientific, one of the largest publicly traded Bitcoin mining firms, was the first buyer of his new Bitcoin mining chips. This move aligns with Dorsey and his companies' increasing focus on Bitcoin.

“Given the rise of U.S.-based Bitcoin miners growing in scale, diversifying the supply chain away from China would be preferred, and Block’s proposition as latest generation chips manufactured in [the] U.S. could see uptake from miners other than [Core],” Bernstein's report added.

Last month, Trump, who was once anti-crypto, expressed his support for Bitcoin at the annual Bitcoin conference in Nashville. He stated his desire for “all remaining Bitcoin to be made in the USA” and promised to make the U.S. “the crypto capital of the planet.”

photo source / Blockonome