Bitcoiners have been ‘all in’ on Trump since Bitcoin ’24, but it’s getting dangerous.

Two months later, on July 10, Trump's attendance at Bitcoin 2024 was announced. As Trump began to emerge as the favorite, and doubts grew about Joe Biden's age and ability to govern again.

The Democrats have changed the views of the ‘anti-crypto army'

At Bitcoin 2024, there is talk about the “Orange Party” – the mass of Bitcoiners and the wider crypto community where the former president and candidate of the Red Party came to get votes. Given the industry's ties to the Democratic Party, support for the Orange Party is low-hanging fruit for Republican strategists.

Perhaps the clearest demonstration of the Democrats' abandonment of the crypto community can be seen in the actions taken by Senator Elizabeth Warren, who sits on the Senate Banking Committee and the only use for crypto is money laundering, drug, human trafficking, Iran. and North Korea.

Since 2022, she has supported several anti-crypto bills, and in March 2023, she tweeted a campaign image stating that her campaign was “building an anti-crypto army” (based on a Politica article).

In contrast, in May, Trump's campaign announced that it was building a crypto-army to defeat Democrats and that it would accept donations in multiple cryptocurrencies.

“Magaga supporters, now with a new crypto option, will build a crypto army to take the campaign to victory on November 5th!” The campaign is here.

In his statement, the stage is set for the 2024 election to be partly a crypto war.

Operation Choke Point 2.0 is aimed at the crypto industry.

One of the most successful aspects of this partisan crypto war has been the revival of Operation Choke Point, originally a 2013-2017 initiative to investigate banking relationships with companies engaged in high-risk financial transactions, such as pawn shops, gun and ammunition dealers. , money transfer networks and payday loans. This regulatory pressure has led banks to cut off banking services to otherwise legitimate customers.

In the year In 2023, Nick Carter, founder of CoinMetrics, pointed out that Operation Choke Point 2.0 has continued and is now targeting crypto. In January, a joint statement by the Federal Reserve, the FDIC and the Office of the Comptroller of the Currency stated that crypto represents a “significant risk” to banks and is “inconsistent with safe and sound banking practices.”

The collapse of two of the remaining crypto-friendly banks, Seagate and Signature, in March 2023 has put significant pressure on the industry. Trump's former acting White House chief of staff, Mick Mulvaney, told Bloomberg earlier this month: “We're starting to hear the same buzz in crypto — if you're in the blockchain or crypto business, it's going to get harder.” To find someone who will give you old banking services you have to work with.

So when Trump told the crowd at Bitcoin 2024 that he would fight to release the bottleneck, the room went crazy:

“As President, I will immediately terminate Operation Chokepoint 2.0. They want to strangle you. They want to put you out of business. We will not allow this to happen.”

Democrats are to blame for the SEC's war on crypto.

Although the SEC is independent of the government, Biden appointed Chairman Gary Gensler in 2021. Since the collapse of FTX in 2022, the SEC has launched an all-out attack on crypto. Rather than just targeting fraud schemes and bad actors, the SEC has targeted some of the biggest players, including Coinbase and Uniswap. If the industry sees a crypto-driving villain in Washington — and they mostly do — it's Gensler.

“We will fire Gary Gensler and appoint a new SEC chairman.”

Before the sentence was finished, the crowd thundered to their feet and cheered.

Trump was clearly surprised. “Well, I didn't know it was so unpopular!” he shouted, then decided to go off script to milk the applause. “Let me say it again. I fire Gary Gensler on the first day. I will appoint a new SEC chairman who believes that America should build the future, not limit the future, which is what they are doing.

As many have pointed out, Trump doesn't necessarily have the power to make good on that promise, though he would no doubt make life miserable for Gensler.

Trump has promised to kill the CBDC

Trump has promised to kill another political boogeyman, CBCCs or central bank digital currencies. As for centralized, government-backed digital currencies, they are opposed to the crypt's libertarian ethos, and dissent is palpable in Nashville, where anti-CBDC stickers can be found strewn across tables.

This anti-CBDC view is supported by the governor of Florida and influential Republican Ron DeSantis, who said that “centralized banking digital currency is about monitoring and control”. In the year In March 2023, DeSantis introduced legislation to “protect Floridians from the Biden administration's weaponization of the financial sector through the CBCC.”

A year later, in February 2024, Texas Senator Ted Cruz introduced legislation to ban CBCCs because “the Biden administration is infringing on our liberties and citizens' privacy to track their personal spending habits.”

Trump says:

“The creation of a central bank digital currency is over. forget it. CBCC. As long as I am President of the United States, there will never be a CBDC.

Thunderous applause from the Nashville crowd.

While the incoming Trump administration may or may not ban the creation of US federal CBCCs, CBCCs are coming to other parts of the world. The People's Bank of China has already introduced the digital yuan and integrated it with popular payment apps. The European Central Bank is preparing a digital euro from 2021 and there are similar initiatives in the United Kingdom, Japan and dozens of other countries.

Should crypto be a Republican industry?

Given these statements, it is reasonable to expect that a Trump presidency will increase crypto mining, development and investment activity in the US along with the introduction of a clear regulatory framework. This results in increased downstream costs to consumers and ultimately higher prices.

But is it wise for the blockchain movement to politically align itself with Republicans, and Trump in particular? Having previously respected industry leaders go full MAGA in public won't improve crypto's image – for Democrats or moderate voters.

Consider the case of Ryan Selkis, who was CEO of crypto research firm Messari before his ouster in July after a series of unprofessional tweets that sent the crypto community into a literal war against “the left.”

Such partisan positions can be problematic, as the other side can make the industry lose as a political rival, rather than defeating the “swinging government.”

Putting all your eggs in one basket is not a good investment strategy, especially with Kamala Harris leading the polls right now. It's also worth noting that crypto isn't viewed through a partisan lens in much of the world, so forcing it into one in the US could be uncomfortable for many users.

But, in a speech in Nashville, Trump tried to win back the trust of the blockchain industry by touting its political value, sending Democratic strategists back to the drawing board to redefine the party's approach to technology.

You also know that Fairshack is now the largest super political action campaign, raising more money than Make America Great Again Inc and deciding to use those funds to influence the outcome of elections involving anti-crypto candidates. According to watchdog Public Citizen, the industry has spent $119 million so far this election, and of the 42 primary campaigns they've donated to, crypto-backed super PACs' favorite candidates have won 36 times.

There are some green shoots and signs that the Democrats are starting to change course, with the formation of the Crypto4Harris campaign and two recent meetings between White House officials and crypto leaders to discuss this issue. Nothing concrete yet, but on August 21, Harris policy advisor Brian Nelson was asked specifically about Harris' position on crypto. He struck a positive note for the industry.

She advocates for policies that ensure the growth of new technologies and industries.

He also said, “One of the things they clearly need is stable laws and rules of the road.”

Will Harris directly address the issue of crypto during the campaign and offer a competing vision to Trump and once again make crypto a bipartisan issue? She has the potential to gain some powerful allies just by summoning the anti-crypto army.

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Elias made us

Elias Ahonen is a Finnish-Canadian author based in Dubai, who bought his first bitcoin in 2013 and has since worked as a small blockchain consultancy around the world. His book, Blockland, tells the story of the industry. He holds a Master's degree in International and Comparative Law and wrote a thesis on NFT and Metaverse Regulation.

Follow the author @eahonen