When Donald Trump went head to head with Kamala Harris in a debate on September 11th, the price of Bitcoin and Ethereum dipped momentarily, mirroring the implications of a Democratic presidency for the future of cryptocurrency.
As with many key issues, Harris had yet to take a strong stance on digital assets including cryptocurrencies, which are forms of digital money that can be traded over the internet without relying on the global banking system.
Trump, meanwhile, went from labelling crypto “a scam” to positioning himself as the pro-Bitcoin candidate, courting the votes of 40 million investors active in the United States. At a cryptocurrency conference in July, the Republican candidate claimed that he would make the US “the cryptocurrency capital of the planet” and “the Bitcoin capital of the world”. He also promised to fire Gary Gensler, the chairman of the Securities Exchange Commission (SEC), if re-elected. “They want to choke you out of business; we’re not going to let that happen” he told the rally. In response to Trump’s victory on November 5th, Bitcoin is trading at a record high of $84,000 (€79,000), reflecting the deregulatory environment many anticipate under a Republican tenancy. Others experiencing a boost include the second largest cryptocurrency, Ethereum, and Dogecoin, a token favoured by Elon Musk based on fluffy dogs that think entirely in comic sans font. Musk loves Trump, so Dogecoin is surging. Much excitement.
Cast your minds back to 2020, when Trump was last in office. Millions of Americans are unemployed or on furlough in a Covid lockdown. The future is dark. Or it’s uncertain. Some begin dabbling in crypto and no-fees trading apps such as Robinhood. Matt Damon promises the nation that “fortune favours the brave” in a Super bowl ad for crypto.com and LeBron James tells them that “if you want to make history, you’ve got to call your own shots”. This America shills Bitcoin as a pathway to the good life when college, the secure job and the 401K have been stripped away. Think “crypto” and you probably still think of Sam Bankman-Fried or Musk or some faceless functional sociopath with a copy of Atlas Shrugged carefully marked up on his Books app. But at the height of the 2021 boom, those buying in were poor, in debt, predominantly black investors who had been told that this was their best shot to build intergenerational wealth. And when the market collapsed, they were the ones left holding the bag.
The Biden administration reacted to the collapse of numerous crypto platforms such as FTX with stronger regulation, particularly when it came to the classification and oversight of digital assets. The SEC now treats most cryptocurrencies as securities. (They are). It also called on Congress to pass laws to increase transparency requirements for cryptocurrency firms and enforce stricter penalties in the future for illicit activity involving digital assets. But Trump has not only vowed to fire Gensler as soon as he takes office, he has promised to be much more lenient than him. Of course he has. As the founder of a crypto-exchange, not to mention those dodgy “America First” NFTs featuring Trump in various Ken-doll iterations – Trump as GI Joe, a Nascar driver, a cowboy, an astronaut and yes, unfortunately, Trump as the president of the United States – Trump is invested.
World Liberty Financial is a family venture, with sons Donald jnr and Eric taking up roles as “web3 ambassadors” and 18-year-old Barron acting as its “chief DeFi [decentralised finance] visionary”. By simultaneously launching a crypto-exchange and taking office, Trump stands to benefit from any policies surrounding digital assets going forward. “Taking a pro-crypto stance is not necessarily troubling; the troubling aspect is doing it while starting a way to personally benefit from it,” said Jordan Libowitz, a spokesperson for Citizens for Responsibility and Ethics in Washington.
Bitcoin reared its head in the aftermath of the financial crash in 2008. It promised a money free from state control at a moment when many people’s trust in government was at an all-time low. But the origins of Bitcoin go back further, to an online community called the Cypherpunks who were mostly active in the San Francisco Bay area in the 1990s. Their communications span the Clinton administration, the NSA Clipper chip controversy (a pre-Snowden scandal where the US government planned to introduce a chip set into all commercial electronics in order to decrypt phone calls and emails) and the dawn of ecommerce.
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The Cypherpunks were founded on the principle of “cryptoanarchy”, defined in their glossary as “a technological solution to the problem of too much government”. Technological solutions to the problem of too much government is something that appeals to appeals to both Bitcoin advocates and Techno-Liberal Trump supporters. Both share a desire to replace politics with technological solutions such as AI or “the blockchain”, to leave messy problems such as death, taxes and climate change behind in free-zones in the desert or cities on Mars. For both, institutions such as the state or the SEC are quite literally a drag, a fetter on free markets and the exercise of their personal liberties. Alongside the shakedown of the SEC, Trump has promised to recruit Musk, the man responsible for inflating a token of an internet doggy to dizzying heights, to a new role as head of the Department of Government Efficiency – because, as he recently told Joe Rogan “vast federal bureaucracy is holding America back in a big way”.
[ David McWilliams: Bitcoin’s real value is based on the greater fool theoryOpens in new window ]
Musk and Trump both feel strongly that democracy should be switched out for governance by whoever has the most money. And cryptocurrency stakeholders were by far the main corporate funders of the 2024 election. Most of this spending was funnelled into Fairshake, the industry’s main political action committee, intervening and lobbying for the likes of Coinbase, Ripple and the venture capital firm Andreessen Horowitz. In total, the industry invested more than $119 million in bankrolling pro-crypto congressional candidates, many of whom were successful. This figure is second only to fossil fuel corporations, which have spent a combined $176 million on congressional lobbying in the past 14 years. This is Trump’s America, where a formerly impeached, convicted felon is once again the US president. And now It might just be the Bitcoin capital of the world.
Rachel O’Dwyer is the author of Tokens: The Future of Money in the Age of the Platform and a lecturer in digital cultures in the National College of Art and Design, Dublin
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