American-Made Bitcoin?
Chris Matta, strategic advisor at 3iQ, noted that the U.S. currently boasts the highest hash rate on the bitcoin network globally, accounting for about 38% of the total. The hash rate is a measure of the computer power required to mine cryptocurrencies and process transactions.
However, it is impossible to amass a 100% share of the global hash rate.
"Regardless of the policy decisions, it is simply not possible for all remaining bitcoin to be 'made in the USA' due to the decentralized nature of the network," Matta said. "This diversification is essential for bitcoin's resilience, which reduces the risk of miner centralization and exposure to any single government."
Matta added that the U.S. was the main beneficiary from China's ban on crypto mining in 2021.
"While Trump's desire to see all bitcoin mining in the U.S. may not be technically feasible as stated, the sentiment behind his statement is a powerful one," Matta continued. "Encouraging domestic bitcoin mining aligns with fostering investment and innovation within the crypto industry, while bolstering energy infrastructure growth."
Trump's stance is "in stark contrast to the current administration's proposals for burdensome excise taxes on mining," Matta added. He said the excise tax proposals threaten to drive a "significant portion" of U.S.-based hashpower to more economically favorable jurisdictions.
Gaining Mining Power
Meanwhile, Matthew Sigel, head of digital assets research at VanEck, agrees that achieving a 100% hash rate is impossible, but above 50% is feasible.
"In order to get there, the U.S. would likely need to explicitly encourage energy exports in a way that reignites investment in energy infrastructure including raw production of fossil fuels, LNG terminals, gas pipelines, refineries and nuclear power plants," Sigel said. "Such a tone shift might help lower energy and electricity costs, the biggest input for bitcoin miners. It would also be helpful to stop micromanaging access to existing grid resources."
Sigel pointed to New York's two-year moratorium from November 2022, that temporarily banned crypto mining powered by fossil fuel plants.
"An executive order or legislation prohibiting discrimination against certain electricity consumers would give bitcoin miners the confidence to increase CapEx in the U.S.," he added.
"In our view, America can absolutely dominate bitcoin mining if we prioritize growth over the unrealistic green agenda, hard money over inflationary policies, and innovation over regulation," Sigel said. "By focusing on economic expansion and fostering an 'all of the above' approach to energy production, the U.S. could easily host more than half of bitcoin's global hash rate within 18 months."
