Trump Boosts Bitcoin Mining Stocks with Industry Support

After Trump’s comments about making Bitcoin American again, the prices of Bitcoin mining stocks surged.

Former President Donald Trump recently shared that he will wholeheartedly support the Bitcoin mining industry, after a meeting with executives from major U.S. crypto mining firms. Trump now wants all remaining Bitcoin to be mined in the U.S. Not long after Trump's pledge, Bitcoin mining stocks surged. Companies like TeraWulf and Hut 8 Mining saw the largest gains. Meanwhile, Riot Platforms is attempting a takeover of Bitfarms, which it is resisting with a shareholder rights plan. While Bitcoin mining stocks soar, some analysts also predict a big rise in BTC’s price soon.

Trump Courts Bitcoin Miners

Donald Trump has once again announced his support for the Bitcoin mining industry after a meeting with several executives from U.S. crypto mining firms. On Jun. 11, Trump posted on Truth Social that he wants all remaining Bitcoin to be mined in the U.S. and claimed this would help the country achieve energy dominance.

Trump’s Truth Social post (Source: Truth Social)

He also called Bitcoin the last line of defense against a central bank digital currency, despite Federal Reserve Chair Jerome Powell's statement in March that the U.S. was not even close to recommending or adopting such a currency.

The meeting at Trump's Mar-a-Lago home included some well known people like Riot Platforms CEO Jason Les, CleanSpark executive chairman Matthew Schultz, and TeraWulf board member Amanda Fabiano.

The discussion mostly centered on how Bitcoin mining could actually strengthen the electrical grid and encourage job creation. According to Schultz, Trump pledged to support the sector if elected president in November. Fabiano believes this meeting was a step in the right direction as it is important for politicians to understand the benefits of Bitcoin mining, especially considering the political challenges that the industry is facing.

President Joe Biden has proposed a 30% electricity tax on Bitcoin miners, and the industry is under scrutiny for its emissions, energy consumption, as well as its potential impact on power grids.

Despite previously calling Bitcoin a scam in 2021, Trump has completely changed his views, and now plans to appeal to the industry's lobbying groups as the 2024 presidential election approaches. He is adamant that the U.S. has to lead in crypto and even declared himself the "crypto president." Additionally, Trump even started accepting cryptocurrency donations for his presidential campaign and hosted a dinner for holders of his Mugshot non-fungible tokens.

Mining Stocks Soar

Bitcoin mining stocks saw some impressive gains on Wednesday after Donald Trump's commitment to support mining operations in the United States.

TeraWulf and Hut 8 Mining saw the largest increases among the top 10 largest Bitcoin miners by market cap, with gains of 10.5% and 10.07%, respectively, according to data from Google Finance. Core Scientific, Iris Energy, and Cipher Mining also performed well, with rises of 9.87%, 9.72%, and 8.94%. Industry leaders CleanSpark and Riot Platforms rallied 8.15% and 6.5%, though Marathon Digital, the largest Bitcoin miner by market cap, saw a more modest increase of 2.4%.

TeraWulf stock price (Source: Google)

China-based Bitcoin miner Canaan was the only one among the top 20 by market cap to record a decline in share price on Jun. 12. However, the day's strong performance boosted the Bitcoin mining industry's market cap to $26.3 billion, according to Companies Market Cap.

CleanSpark and TeraWulf have been performing extremely well in 2024 so far, with year-to-date increases of 58.55% and 66.96%. However, not all Bitcoin miners have enjoyed the same growth this year. Marathon Digital's stock is down 11.43% year-to-date, while Riot Platforms has seen a decline of almost 31% in 2024.

Bitfarms and Riot Clash

Meanwhile, Riot Platforms CEO Jason Les is pushing against Bitfarms' plan to prevent Riot from buying more than a 15% stake in a corporate takeover. In a Jun. 11 filing with the U.S. Securities and Exchange Commission (SEC), Riot revealed that it bought approximately six million Bitfarms common shares in three separate trades, worth more than $111 million. This acquisition, combined with previous ones, brought Riot's stake in Bitfarms to 13.1%.

On Jun. 10, Bitfarms announced a shareholder rights plan suggesting a "poison pill" strategy to defend against a Riot takeover by diluting the value of its shares and preventing Riot from getting a 15% or higher stake. Les is not very happy with the plan, and claims it conflicted with legal and governance standards by setting the threshold at 15% instead of the customary 20%. However, Bitfarms argued that the plan still allowed Riot to pursue a takeover in accordance with Canadian securities laws.

In May, Riot offered to buy Bitfarms for $950 million. The price represented a 24% premium over Bitfarms' one-month volume-weighted average share price as of May 24. Bitfarms' stock price on the Nasdaq has increased by over 56% in the last month in the middle of these takeover plans.

Bitfarms announced in May that its former CEO, Geoffrey Morphy, would step down after filing a lawsuit against the company. Nicolas Bonta has been acting as interim president and CEO until a replacement is found. Les wants Bonta to be removed from his position, and blames him for Bitfarms' poor corporate governance practices.

Bitcoin Set to Surge

While Bitcoin miners are performing exceptionally well, there might be good things waiting for BTC’s price as well. Despite the Federal Reserve's hawkish tone, technical analyst CryptoCon predicts that Bitcoin will soon surge by almost 25% above its all-time high of $73,679, reaching $91,539 before eventually hitting the cycle's peak of $123,832.

In a post on X, CryptoCon based this prediction on the "Magic Bands" model, which segments Bitcoin's price cycles into different levels. According to the model, Bitcoin, currently resisting within level 2.5, will advance to level 3 at $91,539 and then to the "Cycle Top Target" of $123,832 when it breaks through the consolidation period. This would represent a 30+% spike from its current price of around $67,595.

This very bullish prediction was made despite concerns from other traders over the Fed's aggressive stance to control inflation, which includes reducing the number of expected interest rate cuts this year from three to one. Lower interest rates typically make riskier assets like Bitcoin a bit more attractive, while higher rates have the opposite effect.

According to Michaël van de Poppe, founder of MN Trading Consultancy, the FOMC's tone was a lot more hawkish than anticipated. Independent analyst Ted Talks Macro also agrees with this.

Markus Thielen, head of research at 10x Research, suggested that the FOMC's expectations might be unrealistic and that they might have to adjust their forecasts later in the year. He pointed out that the market still anticipates two rate cuts, despite the FOMC projecting only one.

Month-on-month CPI remained unchanged from last month, with a year-on-year tally of 3.3%, both slightly lower than forecasted. After the CPI announcement, Bitcoin surged by $1,500 to $69,636. Thielen pointed out that a lower CPI has historically been bullish for Bitcoin, while higher readings have led to sell-offs, which was the case in January, March, and April.