The color of Bitcoin (CRYPTO: BTC) could be shifting from orange to red, white, and blue. Donald Trump has pledged that, if he becomes the next president, Bitcoin mining operations will see a significant increase in the United States. Trump has even suggested that all future Bitcoin should be mined domestically.
For crypto investors, there are several ways to profit from this potential shift beyond investing in Bitcoin miners. Here are three cryptocurrencies that could benefit.
Bitcoin
Bitcoin is the most obvious beneficiary of Trump’s support. One major criticism of Bitcoin has been its energy inefficiency. In September 2022, the Biden administration published a detailed report, “Climate and Energy Implications of Crypto-Assets in the United States,” highlighting the significant strains Bitcoin mining imposes on America’s energy grid.
A nationwide “Make Bitcoin Mining Great Again” initiative could mitigate one of the primary obstacles to Bitcoin’s mainstream acceptance. While environmental activists like Greenpeace may continue to criticize “energy-guzzling Bitcoin mines,” more U.S. states could embrace Bitcoin mining, especially those with cheap renewable energy sources or regions looking to revitalize their economies.
The big question is whether Trump’s initiative will have a substantial economic impact. The Bitcoin mining industry is relatively small, employing about 60,000 people in the U.S., with only one-fifth involved in crypto mining. However, the economic multiplier effect of supporting Bitcoin mining could include jobs in renewable energy and companies upgrading America’s power grid. There is also speculation that supporting Bitcoin mining might boost America’s growing AI industry due to its significant energy needs.
Litecoin
Litecoin (CRYPTO: LTC), similar to Bitcoin, is a proof-of-work cryptocurrency requiring mining. Created from the same source code as Bitcoin, Litecoin shares many similarities, including a halving event every four years. Therefore, anything benefiting Bitcoin mining could also benefit Litecoin mining.
However, Litecoin has fallen out of favor with investors. While it remains among the top 20 cryptocurrencies by market capitalization, it is down 2% year to date, whereas Bitcoin is up 55%. Despite this, Litecoin is widely recognized as a cryptocurrency, avoiding major regulatory battles with the Securities and Exchange Commission. This regulatory clarity allows Litecoin to participate in financial projects that other top cryptocurrencies might be excluded from. For instance, when a group of Wall Street giants formed a new private trading platform last year to trade four cryptocurrencies, Litecoin was included.
Dogecoin
Surprisingly, Dogecoin (CRYPTO: DOGE) could also benefit. As the second-largest proof-of-work cryptocurrency by market cap, behind only Bitcoin, Dogecoin was mentioned in the White House’s 2022 environmental review of crypto-assets. Thus, it could benefit from any national discussion on the environmental impact of cryptocurrency mining.
While Dogecoin remains a meme coin with no obvious utility, a hypothetical scenario where Trump publicly supports Dogecoin, similar to Elon Musk’s promotion on social media, could cause its price to skyrocket. Imagine Trump suggesting using Dogecoin to reduce the national debt. Though it might seem ludicrous, Trump has already questioned if Bitcoin could help pay down the national debt, and Musk has floated using Dogecoin for space missions.
Be Wary of the Bitcoin Flip-Flop
Investors should not base financial decisions on candidates’ campaign promises. Trump was once anti-crypto and anti-Bitcoin. If he changes his stance again after winning the election, Bitcoin mining might not be what he envisioned.
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