The Politics of Cryptocurrency: A Season of Opportunistic Pandering
This presidential election cycle has showcased some remarkably blatant attempts to sway voters and manipulate policies for personal gain. In the spring, Donald Trump made a stunning promise to a gathering of oil and gas executives: if they raised $1 billion for his campaign, he would roll back a host of environmental regulations that constrained their operations. Meanwhile, Elon Musk has devised a strategy to incentivize voter registration in Pennsylvania by offering $100 to individuals who sign up. He has also pledged to give away a giant, million-dollar check to one new voter who supports his petition advocating for the First and Second Amendments, every day leading up to the election. These actions signal the growing influence of billionaires in American politics, a phenomenon I will delve into in this week’s and next week’s newsletter.
However, the most blatant act of political pandering this election season emerged during the summer’s Bitcoin Conference in Nashville. There, both Robert F. Kennedy Jr. (whom Trump has indicated might serve in his administration) and Trump himself took the stage to make grandiose promises regarding cryptocurrencies. They both pledged that a Trump administration would direct the U.S. Treasury to purchase and retain cryptocurrencies, effectively bolstering their value for investors. Kennedy, who had previously expressed a desire to put the entire federal budget on blockchain technology, vowed that his administration would acquire enough Bitcoin to amass a reserve of four million coins—an injection of around $250 billion into the cryptocurrency market. Trump, who has since launched his own crypto venture, World Liberty Financial, even joked about using cryptocurrency to pay off the entire U.S. national debt. He promised to establish a “strategic national Bitcoin stockpile” worth billions, positioning the United States as the “crypto capital of the planet and the Bitcoin superpower of the world!”
Interestingly, Kamala Harris was absent from the conference, though there were brief rumors of her attendance. Instead, she addressed a Wall Street fundraising event, declaring her intention to actively support “digital assets” if elected president. She also commissioned Chuck Schumer to participate in a Crypto4Harris event, where he assured attendees of forthcoming pro-crypto legislation by the end of the year. “Why are we here today?” Schumer asked. “Because we all support Vice President Kamala Harris to be our next president, and we all believe in the future of crypto.” Recently, Harris has created an outreach team focused on courting crypto investors and even enlisted Mark Cuban to help engage this demographic. In a targeted appeal to Black men, she has named the protection of crypto assets as one of her five key policy priorities.
Such overt pandering was quite cringe-worthy—politicians from both parties shamelessly courting a constituency they struggle to comprehend, all while endorsing an asset class designed to circumvent and undermine the U.S.-led global financial order. Beyond the cringe factor, the timing and political calculation behind these maneuvers are baffling. Crypto investors have often positioned themselves as advocates for financial separatism, seeking not merely to avoid taxes on newfound wealth but to pursue a more comprehensive “exit” from the obligations of citizenship. In the previous election, neither party would dare to touch the topic of cryptocurrency with a ten-foot pole. Even Trump, the quintessential opportunist who embodies America’s declining social trust, previously stated in 2019 that “I am not a fan of Bitcoin and other Cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air.” In 2021, he remarked in an interview that Bitcoin “just seems like a scam,” suggesting it looked to him like “potentially a disaster waiting to happen.”
Since then, the cryptocurrency market has not experienced a significant bull run. During this time, the crypto landscape faced a dramatic crash, which tarnished the reputations of numerous celebrities who had endorsed it. While its value has partially recovered since the so-called “crypto winter” of 2022, it has yet to reach the market-cap heights it achieved in 2021. Advocates could once argue that cryptocurrency symbolized the future of American technology and represented Silicon Valley’s innovative edge. Today, however, artificial intelligence has taken center stage, rendering blockchain technology more akin to yesterday’s news. It has not yet attained the status of a discarded relic from the era of “free money” and zero-interest rates, similar to SPACs, NFTs, and the metaverse. The high-profile frauds and scandals within the sector have proliferated to such an extent that the humor and excitement surrounding them have diminished significantly. Currently, the most notorious figure in the industry remains Sam Bankman-Fried, the disgraced founder of FTX, who is now sharing jail space with other high-profile figures.
So, what has caused this shift? What explains the sudden political relevance of cryptocurrency, along with the bipartisan pandering that accompanies it? The narrative can be framed in personal terms, with Trump’s three sons and Kamala Harris’s ally Mark Cuban guiding their respective candidates toward this newfound focus. A handful of true believers still cling to the hope of blockchain’s potential beyond mere speculative trading, while lobbyists speak of the emergence of the “crypto voter.” However, despite approximately 15 percent of Americans owning some form of Bitcoin, there is scant evidence to suggest that these individuals are voting based on intricate regulatory policies. In a recent poll targeting young men—often viewed as the natural audience for such appeals—cryptocurrency ranked dead last among 27 political issues in terms of importance.