Fearing incoming regulation, the movement is struggling to respond
The anti-crypto law in President Biden’s latest $1.2 trillion infrastructure bill is causing panic in the community. Despite two pro-Bitcoin senators, Cynthia Lummis (R-WY) and Pat Toomey (R-PA), filing an amendment in protest, the bill, which forces key crypto participants to report their revenues, is set to pass through Congress, 68–29 votes in favour.
Crypto advocates, figureheads, and promoters have entered full-blown panic mode. The influencers have come out in force, including Anthony “Pomp” Pompliano and Dan Held. Jack Dorsey, CEO of Square — which holds roughly $50 million in Bitcoin, vented his frustrations while trying to think of a resolution. Even Senator Ted Cruz (R-T) unveiled a hitherto hidden passion for pseudonymous currencies: “Crypto got screwed tonight”, he said on Twitter.
The mainstream and crypto press have had a field day covering the story. But not a single outlet seems to have noticed how the entire Bitcoin publicity machine — the crypto influencers, crypto elites, Silicon Valley, and “moonboys”— have gone from calling every negative catalyst “FUD” propaganda (fear, uncertainty and doubt) to entering panic mode at the first hint of genuine regulation.
J.D. Vance, the Ohio candidate for the U.S Senate, gave the most bizarre response to the bill, claiming “Ohioans are the losers”. But barely anyone owns Bitcoin in his state or any other in America. As a recent Smerconish survey shows, only 14% of people would ever consider investing in it. Vance also said that Big Tech will benefit the most from the regulation, which would be surprising, considering that Peter Thiel, possibly the most Bitcoin-bullish Silicon Valley figure, is backing his Senate run.
This conflict of interest sums up today’s Bitcoin ecosystem in a nutshell: those who’ve made fortunes or a name for themselves through promoting crypto now have a huge financial interest to defend. Bitcoin began life as a way to subvert the system, to create a truly decentralised payment process, censorship-proof and detached from any legacy power structure and its influence. If that was still true, Vance and others would have dismissed the bill as a nothing-burger, a reasonable step on the movement’s journey to reaching the masses.
Instead, they came out against it and in the process revealed their true colours. They’ve realised that a truly decentralised currency is a fantasy, but “decentralisation” has become rhetorical cover for continuing to pump Bitcoin’s price and their own wealth.
The crypto elite are protecting their gains by trying to preserve the unregulated, Wild West atmosphere of the movement. It’s why they’re so desperate for this bill not to pass because it exposes the myth that Bitcoin is detached from the legacy world. They know that forcing miners, validators, and software developers to report taxable income will destroy the unaccountable properties of Bitcoin — the main reason it still has value — once and for all.
Greg Barker is an independent journalist and quant, who also writes under the name Concoda. You can find him on Substack and Twitter at @concodanomics.