Bitcoiners have been ‘all in’ on Trump since Bitcoin ’24, but it’s getting dangerous.
4 months ago Benito Santiago
At Bitcoin 2024 in Nashville, lines will wrap around the block. Delays. The people will wait. Rumors swirl. Then the music comes on, and most of the audience stands in awe as Donald Trump walks to patriotic music.
“There's no way Kamala Harris is coming here,” I heard someone comment.
Indeed, Bitcoin — or at least its most ardent and vocal American supporters — seems to lean heavily toward the Republicans. Gone are the days when fanbases defined their project as a politically neutral technology.
This conference features free “VOTE TRUMP” t-shirts, and Bitcoin Media CEO David Bailey calls Trump “soon to be the 47th president!”
There was no such partisanship during the 2020 and 2016 elections. So, why are libertarian bitcoiners embracing Trump, a politician many Democratic pundits call a “dangerous authoritarian”?
A big hint comes when Trump announces on stage that he will end Operation Choke Point 2, an initiative that has been denied banking access to countless crypto companies.
A spectator sitting next to me jumped up to give a hearty standing ovation. After that, it revealed that the debanking plan caused the US-based crypto investment fund to shut down.
“Earlier this year, we suddenly lost access to banking services. When looking for a new bank, paying staff was an uphill struggle.
In his view, Trump offers the only hope for business as usual.
Many others in the crypto industry are similarly beginning to see the election as a do-or-die choice, having their crypto portfolios and businesses destroyed by Democrats or given a new lease on life by Republicans.
But since Bitcoin 2024, the political situation has changed, with Trump moving from the favorite to the underdog after Kamala Harris replaced Joe Biden as the Democratic candidate. Right or wrong, the optics of the race now make Trump look like an old man fighting a “candidate for change.”
Pollster Nate Silver said this week that Harris “leads our national polling average by 3.8 points and will be the clear favorite in today's election.” With 67 days until the November election, anything can happen, but the industry may be tying the results. A chance for a sinking ship.
Here I am holding 1 BTC Casascius physical bitcoin worth ~$100,000 hours before Donald Trump's presentation at the Bitcoin 2024 forum in Nashville. The issuer is anonymous and I promise not to spill the beans on the new Trump BTC address. As you can see, this is now recorded in the office. pic.twitter.com/pBwnb7tc7e
— Elias Ahonen.eth (@eahonen) August 25, 2024
Table of Contents
ToggleDonald Trump's U-Tara on Bitcoin and cryptocurrency
So, how did the Bitcoin industry get to this point? Critics like to point out that during his presidency, Trump had the same dismissive attitude toward crypto as those within the Democratic Party. In the year In 2019, he tweeted, “I'm not a fan of Bitcoin and other cryptocurrencies, they're not money” and that “unregulated crypto assets can facilitate illegal behavior, including drug trafficking and other illegal activities.” In the year He confirmed his stance on Bitcoins to Fox Business in August 2021, saying, “I think they should be very, very highly regulated.
The first hint of Trump's Bitcoin epiphany came in March of this year when he told CNBC's Squawk Box, discussing the “crazy new currencies” recently approved by the Securities and Exchange Commission, “I'm not sure I want to take it at this point” Bitcoin ETFs. His interest and knowledge of the industry seems to be driven by curiosity fUnsuccessful success with Trump-branded NFTs.
Two months later, on May 8, NFT hosted fans at his Mar-a-Lago home, taking partial credit for “making NFTs hot again” through his projects, which now include NFT sneakers, trading cards and mugshot collections. This is where he took a strong stance on crypto, positioning himself as the industry's defender against SEC chief Gary Gensler and Democrats.
“Gensler is very against it. Democrats are vehemently opposed. i am fine. I want to make sure it's good and strong and everything, but I'm good with it.
Two months later, on July 10, Trump's attendance at Bitcoin 2024 was announced. The political turnaround was complete as Trump began to gain traction as the popularity and skepticism increased with Biden's age and other ability to control time.
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 indication of the Democrats' total abandonment of the crypto community is Senator Elizabeth Warren, who sits on the Senate Banking Committee and repeatedly points out that the only use for crypto is for money laundering, drug trafficking, and human trafficking. , Iran and North Korea.
She has supported several anti-crypto bills since 2022, and in March 2023 her campaign tweeted a campaign image saying she was “building an anti-crypto army” (based on a Politico 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 many 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, an initiative originally launched in 2013-2017 to investigate banking relationships with companies engaged in high-profile financial activities 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.
I don't want to alarm you, but since the beginning of the year, a new Operation Choke Point-type began targeting the crypto space in the US. It's a concerted effort to isolate the industry and cut ties with the banking system – and it's working.
— Nick Carter (@nic__carter) February 7, 2023
In the year In 2023, Nick Carter, founder of CoinMetrics, pointed out that Operation Choke Point 2.0 has resumed 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 Gensler as chairman 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 industry's 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.
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Trump has vowed to kill CBCCs.
Trump has promised to kill another political boogeyman, CBCCs or central bank digital currencies. As centralized, government-backed digital currencies, they are the antithesis of Bitcoin's libertarian ethos, and dissent is palpable in Nashville, where anti-CBDC stickers can be found plastered 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 the Trump presidency will increase crypto mining, development and investment activity in the US and a clearer regulatory framework. This leads to downstream increases in 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 partisanship can be problematic, as it can cause the other side to view the industry as a political rival, potentially leading to a “swinging government” not to win but to lose.
It's not a good investment strategy to put all your eggs in one basket, especially at the moment with Harris pickings. 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.
They're also well aware that Fairshack is now the largest super PAC, raising more money than Make America Great Again Inc, and committed to using 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' stance 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 present 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
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