Wake up Bitcoin (CRYPTO:BTC) may be turning from orange to red, white and blue. This is because Donald Trump has promised that if he becomes the next president, there will be a huge increase in Bitcoin mining operations in the United States. In fact, Trump has gone so far as to say that he wants all future Bitcoins to be mined in the U.S.

As a crypto investor, what might be the best ways to profit from it other than just investing in Bitcoin miners? Here are three cryptocurrencies that could benefit.

Bitcoin

Bitcoin would be the most obvious and obvious beneficiary of Trump’s support. A knock against this cryptography has always been that Bitcoin mining is tremendously energy inefficient. In September 2022, for example, the Biden administration published an extensive investigative report (“Climate and Energy Implications of Crypto-Assets in the United States”) detailing all the ways Bitcoin mining imposes significant strains on America’s energy grid.

Image source: Getty Images.

So, at the very least, any kind of national “Make Bitcoin Mining Great Again” initiative would remove one of the main obstacles to mainstream acceptance of Bitcoin. Yes, environmental activists like Greenpeace will continue to publish reports about “energy-intensive Bitcoin mines,” but more US states would likely adopt Bitcoin mining. This is especially true for states with cheap sources of renewable energy, or states looking to revitalize certain economic regions.

The big question, of course, is whether any new Trump initiative to support domestic Bitcoin miners will actually have any economic impact. After all, the Bitcoin mining industry is relatively small, and if we are only talking about new jobs created at Bitcoin mining companies, the impact may be negligible. There are currently approximately 60,000 people employed in the US crypto industry, but only a fifth of them are involved in crypto mining.

Based on what we know from Trump’s discussions with Bitcoin miners, the main focus appears to be the economic multiplier effect that can result from supporting the Bitcoin mining industry. For example, this would include jobs at renewable energy companies and at companies that help upgrade America’s electrical grid and power transmission lines. And there have even been suggestions that supporting the Bitcoin mining industry could help boost America’s growing AI industry, given this industry’s enormous energy needs as well.

Litecoin

Litecoin (CRYPTO:LTC), like Bitcoin, is a proof-of-work cryptocurrency, then requires mining. It was created from the same source code as Bitcoin, so the two are similar in almost every way. It also occurs in halvings every four years, and just like Bitcoin, Litecoin is backed by an ecosystem of miners. Therefore, it is no exaggeration to say that anything that benefits Bitcoin mining also benefits Litecoin mining.

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My only caveat here is that Litecoin seems to have fallen out of favor with investors. While it is still in the top 20 cryptocurrencies in terms of market capitalization, it is down 2% year to date, while Bitcoin is up 55%. Even more worrying is that the Litecoin halving in August 2023 did not lead to a higher price for the cryptocurrency.

On the positive side, almost everyone agrees that Litecoin is a cryptocurrency and not a security. As a result, Litecoin has avoided major regulatory fights with the Securities and Exchange Commission. This clarity of regularity has opened the door for Litecoin to participate in financial projects from which other major cryptocurrencies are excluded. For example, when a group of Wall Street giants formed a new private trading platform last year to trade just four cryptocurrencies, Litecoin was one of them.

Dogecoin

You didn’t think I would mention Dogecoin (CRYPTO: DOGE) here, right? Well, the list of top proof-of-work cryptocurrencies is quite short, and Dogecoin ranks second only to Bitcoin in terms of market value. Additionally, Dogecoin was actually part of the White House’s 2022 environmental review of cryptoassets, so it would also likely benefit from any broader national discussion about the environmental impact of cryptocurrency mining.

Obviously, whatever Trump decides to do to encourage Bitcoin mining to happen domestically, it won’t change the fact that Dogecoin is a meme currency with no obvious utility. However, there is a strange scenario that could lead to a Dogecoin price spike: Trump could decide to become a public supporter of Dogecoin on social media, in the same way that Elon Musk used X (formerly Twitter) to promote it.

Imagine what would happen, for example, if Trump said he planned to use Dogecoin to reduce the national debt. This concept may seem ridiculous at first glance, but Trump has already asked about the possibility of Bitcoin helping pay off the national debt. And Elon Musk has already floated the idea of ​​using Dogecoin to help pay for future space missions. As America’s debt mountain expands, we will need some creative and innovative thinking. This may explain why former House Speaker Paul Ryan recently wrote an op-ed for the Wall Street Journal about how crypto could prevent a US debt crisis.

That being said, I have no plans to invest in Dogecoin anytime soon. While I can see a short-term argument for buying the meme coin, its long-term argument is much less impressive. Dogecoin has been around for 10 years and has never surpassed the $1 mark.

Be careful with the Bitcoin flip-flop

As a general rule, investors should not make any financial decisions based on candidates’ campaign promises. Remember: just a few years ago, Trump was adamantly anti-crypto and anti-Bitcoin. So he has already turned Bitcoin around. What if he decides, after winning the election (of course, depending on the outcome of the election), that Bitcoin mining is not what he thought it was?

With that in mind, the only cryptocurrency on this list that I am investing in is Bitcoin. The regulatory and political environment appears to be shifting in his favor, and Trump’s new support for Bitcoin mining is just further proof of that. This is the long-term, macro trend I’m focused on right now, and it’s one of the reasons I’m so optimistic about Bitcoin’s growth prospects.

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Dominic Basulto has positions in Bitcoin. The Motley Fool has positions and recommends Bitcoin. The motley fool has a disclosure policy.

Donald Trump wants a huge increase in Bitcoin mining in the US, and these three cryptocurrencies could benefit was originally published by The Motley Fool

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