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Prepare for the Bitcoin presidency Has Crypto's moment come?

Elon: crypto bro. (Photo by Ryan Collerd/AFP/Getty)

Elon: crypto bro. (Photo by Ryan Collerd/AFP/Getty)


November 9, 2024   4 mins

In July, I sat at the Bitcoin Conference in Nashville and watched Donald J. Trump live and in person for the first time. I have never been a great Trump fan, but the experience was electrifying. Love him or hate him, he has magnetism up close. I was impressed at his ability to weave approving statements about Bitcoin, ideas I hold sacred, with standard attack lines on his Democratic opponents. ā€œIā€™m thrilled to be here in Nashville to become the first American president ever to address a Bitcoin event anywhere in the world,ā€ Trump proclaimed. ā€œOur country is blessed to have the extraordinary talent, energy and genius represented in this room.ā€

That day at the Music City Center, the once and future president delivered Bitcoiners a kind of political catnip. He promised lighter regulations on crypto companies, breaking with the enforcement regime of Gary Gensler, chair of the Securities and Exchange Commission (SEC). Trump also pledged a Bitcoin Strategic Reserve, holding BTC the same way the government holds oil for national emergencies. And Trump said heā€™d commute the life sentence of Ross Ulbricht, the founder of Silk Road, a dark web marketplace that helped to popularise Bitcoin. Ulbricht was imprisoned for distributing drugs and money laundering, and many in the crypto community feel he was treated unfairly.

I’ve been working in crypto as a journalist for 10 years and I’ve seen the interaction of the crypto community and US politics close-up. This was the first time I had heard a political candidate, let alone a presidential candidate, say crypto could finally have what it wants and needs: freedom. As Trump now prepares his triumphant return to the White House, itā€™s clear his strategy paid off. Crypto is an increasingly powerful constituency right across American politics. Now it enjoys a friendly ear in the Oval Office, and it could yet spur wider transformations right across the economy.

Until about 2018, crypto was a political non-issue. Its proponents may have thought it mattered in DC, but the truth is almost no one cared. Few used it; even fewer understood it. As an editor of a crypto magazine called Breaker, I discovered this first-hand. If I ran a story on crypto and politics, only the odd advisor or politician would pay attention.

But, then, the industry began donating to political candidates. Sam Bankman-Fried, who later went to prison for an $8 billion fraud, gave money to one third of Congress, writing cheques to politicians on both sides of the aisle. That balance made sense: in Congress, crypto was still largely bipartisan. Neither side cared enough to take a more assertive position on digital assets.

Thatā€™s where Trump saw an opportunity, claiming crypto for himself and his party. He recognised a rich and powerful community looking for mainstream acceptance, a community of innovators ideologically aligned on freedom and a belief in American capitalism. There was a clash between MAGA nationalism and cryptoā€™s borderless ethos. But it didnā€™t seem to matter: each side was useful to the other.

Trumpā€™s interest in and embrace of crypto helped turn Bitcoin into a wedge issue, with Gensler leading several aggressive enforcement actions at the SEC, often accusing companies of illegally selling securities. Something similar happened at the local level: several Democratic states banned Bitcoin mining, citing environmental concerns. Liberals also led a punitive attack ā€” known as ā€œOperation Chokepoint 2.0″ ā€” on crypto companiesā€™ ability to access banking services. Democrats, in short, were happy to let crypto die in America, with many companies considering relocating overseas as a result.

“Democrats, in short, were happy to let crypto die in America.”

So when Trump stood before the Bitcoin Conference, claiming the US would become the ā€œcrypto capital of the worldā€, crypto was willing to help, willing to do anything it could to rid itself of the Democratic menace. And so it proved: Pacs and campaign groups helped rally the estimated 50 million American crypto holders to vote for Trump and other pro-crypto candidates in down-ballot races. To get supporters out, they also worked with powerful influencers who pushed the idea that crypto needed to work with Trump to survive. They described it as an existential crisis ā€” and they werenā€™t completely wrong.

We donā€™t yet know how many crypto fans voted for Trump on Tuesday. But given that we know that crypto is mostly a young personā€™s game ā€” largely the preserve of the very online and very talented ā€” the signs are there. Compared with 2020, Trump increased his support among voters under 30 from 36% to 42%. Harris, for her part, saw a 5% drop in young backers compared to Biden four years ago. Could crypto have got out the vote? It certainly spent hundreds of millions of dollars supporting crypto-friendly candidates this election.

And the asset hit an all-time high when it was confirmed it had a friend in the White House. I imagine cryptoā€™s influence on and in politics is now only going to continue to grow. The big question is how crypto will use its newfound power. It will look to expand the range of products it can sell legally, and improve its reputation with the general public ā€” familiarity will help. Now it has the ear of the man in the White House, and Democrats know they can no longer afford to dismiss crypto. And crypto wonā€™t dismiss politics. It will continue spending big: only last week, a leading venture capital firm pledged $23 million, earmarked for the 2026 election.

But will Trump deliver on his promises? He would have to commute Ulbrichtā€™s sentence and oust Gensler from the SEC, replacing him with someone more crypto-friendly. And beyond these statements of intent, Trump needs to make some concrete moves. The biggest boon would be to pass a ā€œBitcoin Actā€ establishing the Strategic Reserve. Republicans, who are likely to control both chambers in Congress, could also pass legislation on stablecoins ā€” the most popular form of crypto ā€” and clear up the question as to which tokens in circulation are covered by long-standing securities law, which purports to protect investors. This last question is crucial, as a large proportion of the SECā€™s enforcement actions involved the agency asserting that particular tokens were securities and under its purview.

If he did at least some of this, Trump would continue to be cryptoā€™s guy, even if Democrats started playing nice. Certainly, Bitcoinā€™s attraction as hard money sits quite neatly with the Rightā€™s suspicion of the Fed as an elite institution serving the elite, particularly at a time of inflation. But increasingly, people on the Left and centre-left are coming to understand that it is a symbol of people wanting more sane public finances and an end to the status quo that serves mostly boomers, Wall Street and Washington insiders. So with Elon Musk, another crypto supporter, at his side, Trump is perfectly placed to transform the position of the technology across American society, cementing its success within the mainstream financial system while elevating it as a political and social power bloc. Nashville was just the start.


Ben SchillerĀ is the managing editor for features and opinion at CoinDesk, a news site specialising in Bitcoin and digital currencies.

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Jon Hawksley
Jon Hawksley
1 month ago

There are two sorts of money – promise money and token money. Promise money dominates, an institution, a bank or government, promises to pay you a sum of money. You take a risk on the institution meeting the promise and the value of a unit of money issued by a government. Traditional token money hardly exists – it was mostly a gold or silver coin where the value lies in the demand for the precious metal. Crypto currencies are token money, no one has promised anything. Its value is the demand for the token, a number that was tedious to calculate. Since the US election $2.5 billion of “real” money has flowed into the Tether stable coin that is most likely from the sale of Bitcoins. Ordinary savers gave up that money for a number that is tedious to calculate. The only certainty is that that money will not go back to those savers. They will have to hope they can sell their number to someone else who hopes that they can sell their number to someone else who…….

Elaine Giedrys-Leeper
Elaine Giedrys-Leeper
1 month ago
Reply to  Jon Hawksley

Many thanks JH.
Always value your comments about this particular flavour of Ponzi scheme.

Rick Frazier
Rick Frazier
1 month ago
Reply to  Jon Hawksley

ā€œThey will have to hope they can sell their number to someone else who hopes that they can sell their number to someone else whoā€¦ā€¦.ā€œ

And how is this so different than other, alternative forms of custody for cash one hopes will appreciate?

Jon Hawksley
Jon Hawksley
29 days ago
Reply to  Rick Frazier

With the other token money you can sell the precious metal. With the promise money an institution has promised to exchange the promise for cash or treasury bills, your risk is the institution making the promise goes bust. With Bitcoin you have to hope some stranger will buy it. One day, as with the Emperor’s new clothes, everyone will realise that there is a serious risk that no one will want to own a tedious to calculate number. It cannot end well and end it inevitably will.

Martin M
Martin M
29 days ago
Reply to  Rick Frazier

Those other forms of custody for cash are real. They are not just smoke and mirrors created by crooks for nefarious purposes.

Jon Hawksley
Jon Hawksley
28 days ago
Reply to  Martin M

Stable coins are a form of custody for cash, they can be perfectly legitimate but are not regulated. Some offer more transparency. Their value will relate to the assets they are invested in, often the manager gets the interest. Crypto currency like Bitcoins are not a form of custody for cash, there are no assets. I assume Bitcoins started as a game and can see nothing illegal in them provided no promises or encouragement are given that you can sell them for anything more than zero, the amount available when they go out of fashion and the computers are turned off. The ledgers recording ownership using blockchains are designed for anonymity. They are decentralised but are cumbersome. Scaling up creates problems with some risks if short cuts are taken. They have been used for criminal activity, though the fiat money transfers in and out are not anonymous. You have to trust the community of computer owners. That community has to be paid to keep them going. You have to trust the person that interfaces you to that community. Your asset is a “bearer” asset, a number that is not in anyway attached to you – if it is copied or stolen, or you lose it or forget, it you are left with nothing.

Martin M
Martin M
28 days ago
Reply to  Jon Hawksley

You have to trust the community of computer owners“. Not only them, but you mostly end up trusting fine, upstanding members of the business community like CZ and SBF as well.

Ross Jolliffe
Ross Jolliffe
29 days ago
Reply to  Jon Hawksley

The arguments for having some bitcoin are well-rehearsed. The most injurious thing that governments could do to overturn it would be to manage their own economies properly and in peaceful communication.

Jon Hawksley
Jon Hawksley
29 days ago
Reply to  Ross Jolliffe

Well rehearsed but not convincing on analysis. Most of the claimed benefits are the blockchain – anonymity and decentralised – some claim a benfit is a limited supply but that is a serious problem, it pushes the price up. The real problem is that it does not create an investment, it just transfers existing wealth. So far investors have transferred over $100 billion of their real investments to the early holders of bitcoins who mined them or bought them very cheaply. They, maybe a thousand idividuals, have put those funds in stable coins that are real investments in treasury bills and bank deposits. If investors transfer further savings of one trillion dollars into bitcoins it too will go to existing owners who then save it in something else. No one would deposit with a bank who paid it straight out to the shareholders leaving the bank with nothing.

M To the Tea
M To the Tea
29 days ago

Just so my comment makes sense… When discussing finance and economics, itā€™s essential to separate two key areas in one’s mind: financial investment policies versus economic policies, including commercial or labor-capital policies. The first involves speculative and free-market elements (like stocks, risky assets, and interest), while the second is grounded in the value of labor, products, or servicesā€”contributions that are tied to real individuals.
Ideally, the money you save from working hard (like what’s in your bank account) should remain safe and separate from risky financial markets. However, when financial policies allow that saved money to be used in speculative investments, it creates a risky situation. Your hard-earned money in the bank is then exposed to high-risk investments, and that’s where problems arise. This is why many people are hesitant about Bitcoin! If Bitcoin were added to the mix, one could foresee a system that is inaccessible to regular people, potentially leading to many losing their modest savings.
So the question is: why not just separate the two types of financial-economic strategies?
This isnā€™t a new issue, but itā€™s especially relevant now. It may be helpful to learn about the Glass-Steagall Act, which was enacted in 1933 and ironically repealed 66 years later. Many believe its repeal contributed to the 2008 financial crisis. This act was designed to keep these types of financial activities separateā€”something worth reconsidering in todayā€™s financial climate.
The only thing holding us back is that billionaires want to play with everyoneā€™s money without consent.

Michael Clarke
Michael Clarke
28 days ago

I canā€™t understand what Bitcoin is or does or what benefit it offers society. It is not fiat money regulated by law. It is not a physical entity like gold, silver and platinum. What the hell is it? My guess is that it is best avoided (especially by those of us who are not fortunate enough to be very talented) but it is typical of Trump to take a punt on it. He is going to need a strong Treasury Secretary, Fed Chairman, SEC Chairman, Commerce Secretary, FTC boss and OMB boss (i.e., his economic ministers) and he is going to have to listen to them.

Martin M
Martin M
28 days ago
Reply to  Michael Clarke

Good analysis. Bitcoin is however useful for undertaking illegal transactions (something I expect was in the minds of the (unknown) people who set it up).