This election could be make or break for Bitcoin. But tying the crypto industry’s fortunes to Donald Trump is a high-stakes gamble.
At Bitcoin 2024 in Nashville, lines wrap around the block. Delays. The crowd awaits. Rumors swirl. Then the music comes on, and much of the audience stands in awe as Donald Trump walks on accompanied by patriotic music.
“There’s no way Kamala Harris could have come here,” I overhear someone comment.
It certainly seems that Bitcoin — or at least its most ardent and vocal US supporters — has become heavily tilted toward the Republican. Gone are the days when the core of enthusiasts described their project as a politically neutral technology.
This conference features bins of free “VOTE TRUMP” T-shirts, and Bitcoin Media CEO David Bailey introduces Trump as “soon to be the 47th President!”
A security breach resulted in a one-hour delay
A security breach resulted in a one-hour delay. (Elias Ahonen)
Such partisanship was absent during the 2020 and 2016 elections. So, why have libertarian Bitcoiners suddenly embraced Trump, a politician whom many Democrat pundits claim is a “dangerous authoritarian”?
One big hint comes when Trump announces on stage that he’ll put an end to Operation Choke Point 2, an initiative blamed for endless crypto firms being refused banking services.
With palpable emotion, a spectator sitting nearby me jumps up to give a heartfelt standing ovation. Afterward, he explains that the debanking scheme had brought his US-based crypto investment fund to a standstill.
In his view, Trump offers the only hope of his business continuing as normal.
Many others in the crypto industry have similarly begun to view the election as a do-or-die choice between having their crypto portfolios and businesses wiped out by the Democrats or having them given a new lease of life by the Republicans.
But since Bitcoin 2024, the political landscape has been transformed, with Trump moving from favorite to underdog after Kamala Harris replaced Joe Biden as the Democratic candidate. Rightly or wrongly, the optics of the race now make it seem as if Trump is the old man battling against the “change candidate.”
Pollster Nate Silver said this week that Harris “leads by 3.8 points in our national polling average and would be a clear favorite in an election held today.”With 67 days until November’s election, anything could still happen, but the industry might be tying its fortunes to a sinking ship.
Donald Trump’s U-turn on Bitcoin and cryptocurrency
So, how did the Bitcoin industry arrive at this point? Critics like to point out that when he was president, Trump had a similarly dismissive attitude to crypto as many in the Democratic party. In 2019, he infamously tweeted that “I am not a fan of Bitcoin and other Cryptocurrencies, which are not money,” and that “unregulated Crypto Assets can facilitate unlawful behavior, including drug trade and other illegal activity.” He reaffirmed his stance on “Bitcoins” to Fox Business in August 2021, saying, “I think they should regulate them very, very high.”
The first hint of Trump’s Bitcoin epiphany came in March this year when he told CNBC’s Squawk Box that he’s “not sure I’d want to take it away at this point” when discussing “crazy new currencies” amid the Securities and Exchange Commission’s recent approval of Bitcoin ETFs. His interest and knowledge of the industry appear to have been fuelled by excitement regarding the financial success of Trump-branded NFTs.
Two months later, on May 8, hehostedNFT enthusiasts at his Mar-a-Lago home, where he took 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 firm stance on crypto, positioning himself as the industry’s defender against SEC boss Gary Gensler and the Democrats.
“Gensler is very much against it. The Democrats are very much against it. I’m fine with it. I want to make sure it’s good and solid and everything else, but I’m good with it.”
Two months later, on July 10, Trump’s attendance at Bitcoin 2024 was announced. The political U-turn was complete just as Trump began to firm up as the favorite and doubts increased over Biden’s age and ability to handle another term.
Democrats’ ‘anti-crypto army’ changed perceptions
At Bitcoin 2024, there is talk of “the orange party” — the mass of Bitcoiners and the wider crypto community whom the former president and red-party candidate has come to woo for votes. Given the industry’s gripes with the Democratic party, the support of the orange party is low-hanging fruit for Republican strategists.
Trump pledged to commute the sentence of Ross Ulbricht, who operated the Silk Road marketplace. (Elias Ahonen)
Trump pledged to commute the sentence of Ross Ulbricht, who operated the Silk Road marketplace
Trump pledged to commute the sentence of Ross Ulbricht, who operated the Silk Road marketplace. (Elias Ahonen)
Perhaps the clearest display of the Democrats’ general abandonment of the crypto community can be seen through the actions of Senator Elizabeth Warren, who sits on the Senate Banking Committee and frequently suggests that the only use for crypto is for money laundering, drugs, human trafficking, Iran and North Korea.
Since 2022, she has supported a number of anti-crypto bills, and in March 2023, her campaign tweeted a campaign image declaring that she was “Building an Anti-crypto Army” (based on a Politico article.)
Senator Warren carries the anti-crypto banner with pride. (X)
Senator Warren carries the anti-crypto banner with pride
Senator Warren carries the anti-crypto banner with pride. (X)
In contrast, in May, the Trump campaign declared it was building a crypto army to defeat the Democrats and announced it would accept donations in a number of cryptocurrencies.
“MAGA supporters, now with a new cryptocurrency option, will build a crypto army moving the campaign to victory on November 5th!” the campaign said.
With the statement, the stage was set for the 2024 election to be in part a crypto war.
Operation Choke Point 2.0 targets the crypto industry
One of the most successful elements of this partisan crypto war has been the apparent resurrection of Operation Choke Point, originally a 2013–2017 initiative to scrutinize bank dealings with companies engaged in high-risk financial activity, such as pawn shops, gun and ammunition dealers, money transfer networks, and payday loans. This regulatory pressure resulted in banks unilaterally terminating banking services to otherwise legitimate clients.
