Former U.S. President Donald Trump spoke at the Libertarian National Convention in May and lent his strong support to cryptocurrency: “I will also stop Joe Biden’s crusade to crush crypto. … I will ensure that the future of crypto and the future of bitcoin will be made in the USA, not driven overseas. I will support the right to self-custody. To the nation’s 50 million crypto holders, I say this: With your vote, I will keep Elizabeth Warren and her goons away from your bitcoin.”
Former U.S. President Donald Trump spoke at the Libertarian National Convention in May and lent his strong support to cryptocurrency: “I will also stop Joe Biden’s crusade to crush crypto. … I will ensure that the future of crypto and the future of bitcoin will be made in the USA, not driven overseas. I will support the right to self-custody. To the nation’s 50 million crypto holders, I say this: With your vote, I will keep Elizabeth Warren and her goons away from your bitcoin.”
Trump has continued to court the crypto industry in the months since; he appeared at the Bitcoin 2024 Conference in Nashville this week, alongside independent presidential candidate Robert F. Kennedy Jr. Trump’s parting words—“Have a good time with your bitcoin and your crypto and everything else that you’re playing with”—were hardly enthusiastic, but the industry itself remains replete with ardent Trump boosters.
This turnaround came as a surprise given Trump’s previous strong opposition to crypto. When Facebook was floating its libra cryptocurrency in 2019, Trump tweeted: “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.” Former National Security Advisor John Bolton’s White House memoir, The Room Where It Happened, quotes Trump as telling Treasury Secretary Steven Mnuchin: “Don’t be a trade negotiator. Go after Bitcoin [for fraud].” In 2021, Trump told Fox Business that bitcoin “just seems like a scam. … I want the dollar to be the currency of the world.”
Why the change? There don’t appear to be votes in crypto. Trump’s “50 million” figure comes from a badly sampled push poll by crypto exchange Coinbase that claimed 52 million crypto users in the United States as of February 2023. But a survey taken last October by the U.S. Federal Reserve showed that only 7 percent of adults (about 18.3 million people) admitted to holding or using crypto—down from 10 percent in 2022 and 12 percent in 2021. Many of those people are likely bag-holders left high and dry after crypto crashed in 2022—and not necessarily fans anymore.
What Trump wants from the crypto industry is money. The crypto industry has so far collected more than $180 million to throw at the 2024 U.S. elections via its Fairshake, Defend American Jobs, and Protect Progress super PACs.
Fairshake spent $10 million on taking out Rep. Katie Porter in the primary battle for Dianne Feinstein’s California Senate seat, funding Porter’s pro-crypto rival Adam Schiff. It put $2 million into knocking out Rep. Jamaal Bowman in the Democratic primary for New York’s 16th District in favor of pro-crypto George Latimer. In the Utah Republican Senate primary, Rep. John Curtis beat Trent Staggs with the help of $4.7 million from Defend American Jobs. In Alabama House District 2, the majority of campaign spending has come from the crypto industry.
Fairshake is substantially funded by Coinbase, cryptocurrency issuer Ripple Labs and Silicon Valley venture capital firm Andreessen Horowitz, or a16z. Silicon Valley was deep in crypto during the 2021 bubble, and a16z in particular continues to promote blockchain start-ups even now—and still holds a tremendous bag of crypto tokens from the bubble that it would like to be able to cash in.
Many in Silicon Valley would like an authoritarian who they think will let them run free with the money—while bailing them out in times of trouble. Indeed, Trump promised Bitcoin 2024 attendees that he would hold all bitcoin that the United States acquires. (Never mind that it’s generally acquired as proceeds of crime.) Silicon Valley explicitly sees regulation of any sort as its greatest enemy. Three a16z manifestos—2023’s “Politics and the Future” and “The Techno-Optimist Manifesto” and 2024’s “The Little Tech Agenda”—outline co-founders Marc Andreessen and Ben Horowitz’s demands for technology-fueled capitalism unimpeded by regulation or social consideration. They name “experts,” “bureaucracy,” and “social responsibility” as their “enemies.” Their 2024 statement claims that banks are unfairly cutting off start-ups from the banking system; these would be crypto companies funded by a16z.
Trump’s vice presidential pick, Sen. J.D. Vance, is a former Silicon Valley venture capitalist. He was once employed by Peter Thiel, who bankrolled Vance’s successful 2022 Senate run; Vance has been described as a “Thiel creation.” He has increased support for the Trump ticket among his venture capital associates. Vance is a bitcoin holder and frequent crypto advocate. He recently circulated a draft bill to overhaul how the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) control crypto assets. In 2023, he circulated a bill to keep banks from cutting off crypto exchanges.
Minimal regulation has been tried before. It led to the wild exuberance of the 1920s, which finished with the 1929 Black Tuesday crash and the Great Depression of the 1930s. Regulators such as the SEC were put into place at this time to protect investors and turn the securities market from a jungle into a well-tended garden, leading to many prosperous and stable decades following.
Crypto supplies the opposite of a stable and functional system; it’s a worked example of how a lack of regulation lets opportunists and grifters cause disasters at scale. Crypto’s 2022 collapse replayed the 2008 financial crisis in miniature. Sam Bankman-Fried of FTX was feted as a financial wunderkind who would bring economic miracles if only you gave him a free hand; he ended up stealing billions of dollars of customer money, destroyed ordinary people’s lives, and is now in a prison cell.
U.S. regulators have long worried about the prospect of contagion from crypto to the wider economy. Criminal money laundering is endemic in crypto; even the Trump administration made rules in December 2020 to reduce crypto’s money laundering risk. Meanwhile, the crypto industry has persistently tried to worm its way into systemically risky corners of the economy, such as pension funds.
Four U.S. banks collapsed during the 2023 banking crisis, the first since 2020. Two of these, Silvergate Bank and Signature Bank, were deeply integrated into the crypto world—Silvergate in particular seems to have collapsed directly from its heavy reliance on FTX and failed a few months after it did. Silicon Valley Bank was not into crypto but collapsed from a run on the bank due to panic from its venture capitalist deposit holders, particularly Thiel’s Founders Fund.
Project 2025, the Heritage Foundation’s mammoth conservative wish list that Trump and Vance have at various times endorsed and tried to distance themselves from, stresses the importance of party loyalists, noting financial regulation especially. The plan recommends replacing as much of the federal bureaucracy as possible with loyalists and “trusted” career officials rather than “non-partisan ‘experts.’” Vance advocated in 2021 that Trump should “fire every single mid-level bureaucrat, every civil servant in the administrative state,” and “replace them with our people.” Loyalty is likely to triumph over competence.
Crypto is barely mentioned directly in Project 2025—which suggests that it has little active support among the broader conservative coalition. But near the end of the manifesto is a plan to dismantle most U.S. financial regulation and investor protections put in place since the 1930s, suggesting the exemption the crypto industry desires from current SEC and CFTC regulations.
Bitcoin, the first cryptocurrency, started as an ideological project to promote an odd variant of Murray Rothbard’s anarcho-capitalism and gold-backed Austrian economics—of the sort we abandoned to escape the Great Depression. Crypto rapidly co-opted the “end the Fed” and “establishment elites” conspiracy theories of the John Birch Society and Eustace Mullins. It’s a way for billionaire capitalists such as Thiel, Andreessen, and Elon Musk to claim they’re not part of the so-called elite.
If a second Trump administration hobbled financial regulators and allowed crypto free rein, it might help further the collapse of the U.S. economy that bitcoin claimed it would avert. But it’s more likely that Trump will be happy to take crypto’s money and run.
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