Trump’s Cryptocurrency Adoption Could Be a Disaster for Bitcoin
Donald Trump is an unlikely ally of cryptocurrency. The power of bitcoin, embodied in Satoshi Nakamoto founding documentsis that it frees participants from making vague judgments about belief, relying instead on a foundation of evidence.
Bitcoin is real. So it was strange to hear attendees at the Bitcoin 2024 conference in Nashville last week warm welcome a former president who, according to one meticulously compiled countlied 390,573 times in his single term. Believers in a mathematically indisputable blockchain have flocked to praise Donald Trump had a speech full of lies, fabrications, and fantasies. They cheered when he took credit for the meteoric rise in bitcoin’s value during his tenure—even though they surely knew that until recently he had been critical of the idea of cryptocurrencies.
“Bitcoin, it sounds like a scam,” he said. said in 2021. “I don’t like it because it’s another currency that competes with the dollar.” Now Trump has suddenly become the darling of the crypto world, even though no one believes he has a clue how tokens work, or even what they are. “Staple-coin … stablecoin,” Trump said at one point, correcting himself as he presumably glanced at the teleprompter, then paused. “Do you know what a stablecoin is? Does anybody know?”
Trump obviously didn’t. That didn’t stop him from making promises that only someone who understands bitcoin both technically and philosophically could make. He compared bitcoin to the steel industry of a century ago, a striking mismatch between an icon of the industrial revolution and a cutting-edge movement of the digital world. He then promised to make the United States “the cryptocurrency capital of the planet and the bitcoin superpower of the world.”
This sentiment, as conference attendees must have known, upends the basic premise of cryptocurrencies and blockchain—a sovereign system that operates without regard to the interests of any nation. Citing the crypto theorist Erik Cason:“Bitcoin offers a revolutionary new hope that humans can free themselves from the cage that is every nation-state today.” Trump’s promise that the United States will dominate bitcoin is a slap in the face to Satoshi.
One of the proposals Trump emerges as a bitcoin reserve where the US would stash and HODL billions of dollars worth of tokens, a scheme that experts consider of dubious value to taxpayers—but which could inflate the value of the currency to enrich the Nashville mob. Once again, manipulation by a superpower government is anathema to the values of the blockchain revolution. Another promise Trump made was to pardon Silk Road owner Ross Ulbricht, who is currently serving a prison sentence. imprisonment in federal prison for running a major cryptocurrency operation linked to illegal drugs and money laundering. That’s tough on crime.
Despite the strangeness, the alliance between Trump and the bitcoin brethren seems almost preordained. The crypto world is uncomfortable with government regulation, and they see in Donald Trump an opportunity to soften government intervention, perhaps in a friendly way. Trump has encouraged that thinking by meeting with major donors and investors and adopting their views. As if to cement a thinly disguised deal, crypto players are funneling hundreds of millions of dollars into Trump’s campaign coffers. So it was no surprise when Trump promised at the Nashville conference that he would put an end to “left-wing fascists and totalitarians who are determined to crush crypto.” He was warmly welcomed for that sentiment. Trump also pointed out that Kamala Harris was among those “fascists.” “By the way, she’s against crypto,” he said. “She’s against it very strongly.” (In fact, Harris did not set his own policy and approach to crypto companiesThe loudest cheers came when Trump announced he would fire Gary Gensler, chairman of the Securities and Exchange Commission — the agency that oversees dangerous cryptocurrency schemes — on his first day back in office.
The fair question: Is the current White House as “cryptophobic” as the industry and Trump seem to believe? I did some digging and learned that in the early days of the administration, crypto policy—which was certainly a relatively low priority during the pandemic—was actually contested, with some officials viewing it as a rogue technology. Ultimately, however, the administration set a course that attempted to walk the line between encouraging innovation in the space and enforcing existing securities laws.
