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Donald Trump: crypto president Bitcoin has conquered America

Trump is the first Bitcoin president. Jeff Bottari/Zuffa LLC

Trump is the first Bitcoin president. Jeff Bottari/Zuffa LLC


November 28, 2024   6 mins

What is the underlying value of a clam? In short, nothing. But the clamshell was the world’s longest-lasting reserve currency, recognised globally for thousands of years as a store of value and a medium of exchange. The clamshell was the money English colonists found the indigenous populations using when they first landed in America — a currency known as “wampum”. And since the one thing the Mayflower men had not brought enough of to the New World was money, the clever colonists immediately began manufacturing their own wampum. Unfortunately, the inferior quality of their hastily fashioned shell beads set off a cycle of clamshell inflation, and eventually destroyed the currency.

This moment in monetary history has become increasingly relevant in light of Donald Trump’s recent romance with cryptocurrency in general and Bitcoin in specific — the value of which has shot up 40% since Trump’s victory, and is now flirting with the $100,000 mark. The once and future President has taken to musing that alongside the United States national grain reserve, oil reserve, and gold reserve, he might consider adding a national Bitcoin reserve, much to the horror of the United States Securities and Exchange Commission’s Chair, Gary Gensler, who has promised to resign before Trump takes the oath of office.

What explains Trump’s conversion to the cause? Crypto lobbyists fuelled the Republican Party’s election effort with more than $135 million in contributions, including $7.5 million in Bitcoin, Ether, Dogecoin, Solana, and a variety of other crypto coins — a record of sorts, as crypto surpassed fossil fuels as the biggest political donor in the election cycle. This may well clarify why Trump’s media company has moved to buy stakes in the Georgia-based crypto exchange Bakkt — more than half of which is owned by the parent company of the New York Stock Exchange. As Goldman Sachs alum and crypto billionaire Mike Novogratz patiently explained to Yahoo Finance, the new administration will have an “overall pro-crypto attitude”.

This might all seem alarmingly futuristic. And yet Bitcoin has much in common with the humble wampum, along with shells, beads, bones, feathers, and all the other various and sundry forms of primitive money. These primordial currencies represent mankind’s earliest attempts to display status, to avert evil, to avoid risk, and of course, the desire to gamble.

“Bitcoin has much in common with the humble wampum.”

As it turns out, all money is fake money. As far back as 1670, real estate investor Nicholas Barbon wrote A Discourse of Trade. Money, he observed, “is an imaginary value made by a law, for the convenience of exchange”. Physical material does not matter — hence the wampum being magically transformed into money by the quixotic New World settlers, who had arrived with dreams of utopia, personal power, and riches.

Yet in America, fiction has never meant not real. Before the Revolution, the colonies of Massachusetts, Maryland, South Carolina, Connecticut, Rhode Island, Pennsylvania and New Jersey defied the mother country by printing their own paper money — guineas and shillings based on nothing but the paper on which they were printed. This created foreign exchange hell whenever a colonist might transport their pieces of coloured paper from one territory to the next, a problem solved in 1789, when Alexander Hamilton figured out how to turn a mountain of foreign debt into the United States dollar. Debt didn’t scare Hamilton, nor does it frighten Donald Trump, whose companies have declared bankruptcy six times, with losses reaching into the billions. Given the devastating losses incurred by his casinos in New Jersey, why should Trump have any qualms about the underlying value of anything, much less Bitcoin?

The myth of any currency requires a creation story, and such is the case for Bitcoin, whose origins are shrouded in mystery. The first Bitcoin appeared on 3 January 2009: a long series of numbers and letters shimmering on a computer screen, a triumph of the libertarian imagination, a story no one yet believed. It was supposedly created by a man named Satoshi Nakamoto, who most likely never existed. No matter. Early Bitcoin aficionados took to calling their currency “Satoshis”. (In June, Trump tried to pull a similar eponymous trick with TrumpCoin, with much less favourable results, as it is presently trading at a tad more than one-hundredth of an American penny.)

In the 15 years that followed Bitcoin’s founding, the idea of a purely speculative store of value caught on, perhaps because blockchain technology fit the cultural moment so well. Here was a digital quintessence of nothingness that perfectly aligned with longstanding academic deconstructions of truth into metatextual black holes — the dour philosophes never realising that post-modern cynicism could possess cash value. The crypto bro, suckled on the teats of such over-arching nihilism, saw opportunity.

The revolution has well and truly left the ivory tower. The SEC’s recent approval of options trading for Bitcoin exchange-traded funds supercharged BlackRock’s and Fidelity’s Exchange-traded funds (ETFs), each of which attracted more than $3 billion in their first month of existence. There are presently 11 Bitcoin ETFs, which witnessed daily inflows of $1 billion last week.

The crypto bro’s contempt for the United States dollar is in keeping with MAGA’s denigration of status quo politics and disregard for standard economic wisdom (hashtag tariff war). In this regard, Trump has once again aligned himself with Andrew Jackson, the richest president America had ever known and a famously ill-tempered son-of-a-bitch who despised lineage, pedigree, and protocol. Like Trump, Jackson detested anyone or anything with more power or culture than he, so naturally he despised the East Coast banking elite. The result was his infamous destruction of the Second Bank of the United States out of mere spite against its genteel, priggish, and rather literary banker-in-chief, Nicholas Biddle.

What happened next may serve as a warning for today’s crypto maniacs. Stripped of a national currency, Jacksonian America turned to “wildcat banking” — a term referring to frontier financiers, no longer constrained by regulations or any oversight whatsoever, who set up their own banks in the farthest reaches of the uncivilised West. The assumption was that if their corporate headquarters were 1,000 miles away from anywhere, few people would bother to show up, wait in line for the teller, and cash in their paper currency. In one case, the Jackson County Bank’s holdings consisted of nothing more than a half-full drawer of lead, 10 penny nails, and fragments of broken glass — which, by the way, is more than Bitcoin can boast.

The remainder of 19th-century American financial history would be plagued by boom, bust, panics, and bankruptcy. To the rescue came commodity markets, which back then looked rather different to the kind of markets that BlackRock, Fidelity, the Winklevoss twins and Donald Trump have been backing for crypto. What everyone appears to have forgotten is that American commodity markets were created to stabilise the price of volatile necessities — such as bread — and in their heyday governed the price of everything from apples and plywood to silk and cat pelts. The balancing of the “future” price of imaginary wheat with the day-to-day “spot” price of real wheat turned out to be an extremely efficient way to overcome the chaos of ages past, a problem that had bankrupted farmers in times of plenty and starved citizens in times of scarcity.

These days, no one seems to know the difference between Bitcoin and bread — certainly not the commodity markets. There is no “spot” price for “real” crypto as opposed to “future” crypto because there is no real crypto. Not that that bothers anyone. Every bet placed on Bitcoin requires that the exchanges themselves buy crypto in order to cover the bets, thus creating what is known among the denizens of Wall Street as a “gamma squeeze” — and to everyone else as a self-fulfilling prophecy. The more people bet that Bitcoin will rise, the more Bitcoin rises. It was George Soros, the whipping boy of MAGA (and himself an expert in the baroque workings of commodity markets), who came up with the term “reflexivity” to describe the mirroring relationship of perception and reality in financial markets. In sum: perception trumps reality, pun intended. No wonder Trump recently dubbed Scott Bessent as his new Treasury Secretary — a man who was for many years Chief Investment Officer for George Soros.

The self-declared “crypto president” hearkens a return to long-deflated images of political power — not only to Andrew Jackson and his “pet banks” but to the age of primitive money, of the charismatic tribal lord in his headdress of eagle tails, his many wives draped in beads. Indeed, women have spent a great deal of human history being traded, bought, and sold, for women were man’s first bet on futures and options — a view that eerily aligns with Trump’s atavistic chauvinism.

Crypto is the allegory, the metaphor, the symbol of the Trump presidency. Both Trump and Bitcoin display the triumph of image over substance, emotion over reason, charisma over competence. Perhaps a country founded on dreams deserves such totalising vacuousness. It works great, as long as you can keep manufacturing those clams — and convincing everyone else they have cash value. For Trump, the day of reckoning has never come, and likely never will.


Frederick Kaufman is a contributing editor at Harper’s magazine and a professor of English and Journalism at the College of Staten Island. His next project is a book about the world’s first political reactionary.

FredericKaufman

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UnHerd Reader
UnHerd Reader
10 days ago

Bitcoin’s value primarily lies in its scarcity, its resistance to confiscation, and its ease of transfer. Furthermore, unlike gold today, it is difficult to counterfeit. For example, a person can flee an authoritarian country, taking their wealth with them simply by memorizing 12 simple English words. Try doing that with gold or a bank transfer… The author is clearly writing about something he dislikes and has not studied in the slightest (for example: a satoshi is simply one hundred-millionth of a Bitcoin, its smallest unit). Bitcoin is certainly open to criticism, as is Trump’s intention to establish a national reserve. But to do so, you need to have thoroughly researched the topic. The author has not done this.

Martin M
Martin M
10 days ago
Reply to  UnHerd Reader

Was that really so good it warranted saying twice?

Satyam Nagwekar
Satyam Nagwekar
10 days ago
Reply to  UnHerd Reader

Agree. I don’t think the author did their homework at all. The argument against Bitcoin and Trump’s backing of it is rather rudimentary. People have been talking about the crypto currency’s imminent bust for years. That being said, there still isn’t complete evidence to say that Bitcoin is above board.

Last edited 10 days ago by Satyam Nagwekar
Ernesto Candelabra
Ernesto Candelabra
10 days ago

What is Trump’s ‘atavistic chauvinism’? If it isn’t just more lazy journalism….

Neal Attermann
Neal Attermann
10 days ago

More of a Thanksgiving dinner rant than a thoughtful piece re crypto or the blockchain. Would be really interested in a thoughtful essay about blockchain technology and how real Web3 is.

Martin M
Martin M
9 days ago
Reply to  Neal Attermann

Here is my thoughtful essay about blockchain technology: Blockchain technology is cumbersome, inefficient, and energy hungry. This is why it has never been used for anything that is useful in a “real world” sense.

D Walsh
D Walsh
9 days ago
Reply to  Martin M

Wrong again

Truly remarkable

Maverick Melonsmith
Maverick Melonsmith
8 days ago
Reply to  D Walsh

My recollection is that it was once useful for buying drugs on the (now defunct) Silk Road website. I can’t recall it being useful for anything else since then.

Dave Canuck
Dave Canuck
10 days ago

Trump and crypto go hand in hand, they are both con jobs. A president undermining his own country’s currency, there is no bigger betrayal . Let the 4 year billionaire con job begin, drain the swamp and milk the country, people will be so disappointed and they will pay dearly for the coming shitshow

Rick Frazier
Rick Frazier
10 days ago
Reply to  Dave Canuck

Bitcoin’s current or future role as a currency or alternative payment system is the sideshow that is often the focus of critics. We don’t need a new payment system in the U.S. We have plenty that work just fine.

Bitcoin is more like a decentralized central bank than an alternative currency. It has the same primary characteristics of a central bank, with custody being the most important one. As such, it has become an alternative form of custody for cash. Its volatility to date has made this less obvious, but I suspect that volatility to soon settle within a more acceptable range.

I agree with other comments regarding the lack of knowledge on the part of the author. But I don’t have the time nor patience to help him gain a better understanding, or to explain why his comparisons to previous forms of currency make little sense.

Martin M
Martin M
9 days ago
Reply to  Rick Frazier

If Bitcoin is a “decentralised central bank”, it is a woefully inefficient one. Its cumbersome structure means it cannot ever be used as a general medium of exchange, and it is too volatile to be an effective one anyway.

UnHerd Reader
UnHerd Reader
10 days ago

Bitcoin’s value primarily lies in its scarcity, its resistance to confiscation, and its ease of transfer. Furthermore, unlike gold today, it is difficult to counterfeit. For example, a person can flee an authoritarian country, taking their wealth with them simply by memorizing 12 simple English words.
Try doing that with gold or a bank transfer… The author is clearly writing about something they dislike and have not studied in the slightest (for example: a satoshi is simply one hundred-millionth of a Bitcoin, the smallest unit).
Bitcoin is certainly open to criticism, as is Trump’s intention to establish a national reserve. But to do so, you need to have thoroughly researched the topic. The author has not done that.

Martin M
Martin M
10 days ago
Reply to  UnHerd Reader

The author has not done that. I’d be fairly sure Trump hasn’t either.

Benedict Waterson
Benedict Waterson
10 days ago

Trump’s presidency will be terrible for “trans people”

Ramon Bloomberg
Ramon Bloomberg
10 days ago

Bitcoin and Satoshi’s white paper solve the double spend problem for digital currencies. All currencies including fiat currencies are currently digital currencies. Non-cryptocurrencies get around the double spent problem by way of a third-party middleman who takes on power and authority et cetera. Bitcoin style crypto does away with the middleman. The value of a bitcoin derives both from the blockchain network which is not immaterial and from the proof of work operations which require a good amount of energy to complete.

It’s really hard to say if the author of this piece knows anything about crypto. Clearly the editors of UnHerd don’t either or else they might consider getting a real interesting article written about the stuff..

UnHerd Reader
UnHerd Reader
7 days ago

Bitter writings

Matthew Book
Matthew Book
10 days ago

I don’t own any crypto and have only a rudimentary knowledge. It’s too bad the writer couldn’t argue clearly why fiat currency is still a better system than one based on a scarce resource such as gold or engineered-scarce bitcoin. I was open to being informed but the sarcasm-laden rhetoric and name-calling means the writer is more emotionally invested than rationally committed. I wish Unherd would get some better writers.

Martin M
Martin M
10 days ago

The “creation story” of Bitcoin is that a bunch of crooks created a fake “asset” for crooked purposes. Is it any wonder that the only use for it has ever been to facilitate the purchase of illegal things, and that a lot of the people associated with it are themselves crooked.

Bret Larson
Bret Larson
10 days ago
Reply to  Martin M

Sounds like politician to me.

Sean Lothmore
Sean Lothmore
10 days ago
Reply to  Martin M

In 2013 the government of Cyprus executed a one-off levy of 10% of all its citizens’ savings. A fair amount of those savings went quickly into Bitcoin before the state got its hands on them. Were the people trying to hang on to their savings crooked?

Ernesto Candelabra
Ernesto Candelabra
10 days ago
Reply to  Sean Lothmore

A fascinating tale.

Martin M
Martin M
9 days ago
Reply to  Sean Lothmore

Yes. They are “tax avoiders”.

Sean Lothmore
Sean Lothmore
9 days ago
Reply to  Martin M

It wasn’t a tax, it was a levy to help bailout Cypriot banks in a deal with Brussels. Capital flight might be a better term. One way or another, it demonstrated a practical utility for Bitcoin.

Maverick Melonsmith
Maverick Melonsmith
8 days ago
Reply to  Sean Lothmore

So, it would be ok if I told my clients to pay some of my fees using Bitcoin, so I don’t have to include them in my tax return?