Trump’s triumph—is the victory of crypto forces just beginning?

Author: Zeke Faux; Source: Bloomberg; Compiler: BitpushNews Yanan

On November 5, PubKey, a Bitcoin-themed bar in Greenwich Village, New York, gathered dozens of Bitcoin enthusiasts, people wearing MAGA hats, and local residents who heard the news, all paying attention to the latest developments of the election. The digital screen on the wall of the bar displayed the price of Bitcoin in real time. When the news came that was favorable to Donald Trump, the price of Bitcoin broke through the $73,000 mark in one fell swoop.

At the same time, Ohio Republican Bernie Moreno, who is trying to challenge Senator Sherrod Brown's seat, proposed holding a hearing on the use of cryptocurrency by terrorists. It is worth noting that Moreno's campaign has received up to $40 million in funding from cryptocurrency companies. Around 10:30 that evening, an organizer of a Bitcoin meetup group excitedly announced that according to data from the crypto betting website Polymarket, Trump’s chances of winning had climbed to 88%. "Look, Bitcoin is soaring!" he shouted excitedly. "You have to buy it before it breaks the 1 million mark!"

Just last year, such a scene seemed incredible. With regulators around, token prices are still mired in a plunge that has caused heavy losses to investors. SBF, once a leader in the Bitcoin world, has also been tried for fraud and is currently in prison. As for Trump's attitude towards Bitcoin, all that is known is his assertion in Fox Business magazine in 2021 that Bitcoin is nothing more than a "scam."

By September 2023, the reputation of the Bitcoin industry has hit rock bottom, but it was at this cusp that Coinbase's founder, billionaire Brian Armstrong, quietly laid out his intention to gain a place for cryptocurrency in Washington. Three months ago, Armstrong's company was sued by the U.S. Securities and Exchange Commission (SEC), which insisted that most of the transactions conducted here over the years were illegal. This lawsuit, as well as similar accusations against other industry giants, seem to indicate that the end of cryptocurrency in the United States is coming.

At an encryption discussion conference held in New York, Armstrong expressed his views. He is optimistic that the encryption industry can prompt the government to formulate more favorable regulatory rules. He emphasized that the key lies in the power of funds. If the encryption industry wants to really speak out on the political stage, it must significantly increase political donations to compete with Wall Street or the oil and gas industry, and invest at least $50 million a year. "We have to face the reality," Armstrong said bluntly, "In this world, money does make a lot of things possible."

He solemnly announced that Coinbase will lend a hand to the political action committee called Fairshake, and warmly invited industry peers to join in this move. At this time, Ryan Selkis, the former head of the crypto research company Messari, also stood on the podium and bluntly stated the current situation: "We are being pressed for money by pipe welders in Ohio." "The battle has begun, and we have no way back, because this is about our survival." His call was not in vain. In a blink of an eye, the 2024 election cycle is here, and Armstrong has not only successfully achieved his fundraising goal, but his results have exceeded everyone's expectations. Cryptocurrency companies have generously donated to Fairshake and its partners, with a total donation of more than $200 million, among which Coinbase has led the way with a donation of $75 million, making the crypto industry the leader in the field of political donations. Fairshake then carefully allocated these funds to congressional candidates from both parties, and proudly claimed that it helped eliminate House members Katie Porter and Jamaal Bowman in the Democratic primary.

Although Fairshake did not participate in the presidential campaign, other wealthy people in the crypto industry, especially Gemini founder Winklevoss and Kraken exchange founder Jesse Powell, have contributed at least $25 million to support Donald Trump. Trump responded quickly and actively embraced cryptocurrency. At the Bitcoin Conference held in Nashville in July, he passionately announced that he would work to make the United States "the center of global cryptocurrency" and establish a national strategic Bitcoin reserve. He vowed to remove Gary Gensler, the chairman of the Securities and Exchange Commission, and replace him with someone more friendly to cryptocurrencies. “If Bitcoin is destined to soar and fly to the moon,” Trump said, “then America must lead the way.”

It seems ironic that an industry that was originally intended to resist government control is now pinning its future on politicians. However, in the 15 years since Bitcoin was born, the only widely accepted use of cryptocurrencies has been trading them on exchanges—in short, betting on the price fluctuations of these digital assets with real money. (In the recent resurgence of cryptocurrencies, a meme coin called “dogwifhat” has stood out. The token is a copycat coin of Dogecoin, with a puppy wearing a peaked cap and a market value of about $2 billion.) These cryptocurrency trading platforms are incredibly profitable, and the US Securities and Exchange Commission has been trying to regulate and even punish them.

The details of the SEC's case are indeed quite technical, but if we use traditional gambling as an analogy, the situation may be more intuitive. The commission prefers to limit gambling activities to a few racetracks and implement strict drug testing for participating horses. The cryptocurrency industry, on the other hand, hopes that this field will be completely open, so that people can bet their own real estate on live cockfighting in Nicaragua, or even use winnings in cockfighting to pay for a cup of coffee at Starbucks.

Of course, cryptocurrency supporters naturally don't describe it this way. They prefer to praise cryptocurrency as an "American innovation" and tout how it will give people financial freedom. The industry’s political ads don’t even mention cryptocurrencies. Take the Fairshake ad supporting Moreno, which claims he will stop “illegal immigrants from robbing Ohio of its tax revenue.”

As the election approaches, the industry’s cynical strategy seems to be working. Kamala Harris has begun to make overtures to the industry, although these overtures are somewhat confusing, such as her inexplicable inclusion of cryptocurrency regulation in her agenda to help black people.

Trump has also personally stepped up to promote the crypto project he founded, World Liberty Financial. The idea was originally instilled in Trump’s sons by an upstart who called himself the “Internet Wealth Master.” Although the crypto industry has concerns about the Trump Token, several party insiders revealed that this subtle connection of interests may make the former president more determined to promote regulatory policies that are favorable to cryptocurrencies - as long as he can win the election.

In the PubKey bar on election night, two salesmen in their thirties wearing MAGA hats swiped their mobile phone screens to browse the hot spots on X, while joking with a reporter with a smile, saying that if Trump was elected, the reporter would be the first "lucky person" to be "sent" abroad. (When leaving, they even hid their hats in their backpacks.) Another compliance officer, who was over 70 years old and wore a retro brooch that read "We hope Kennedy will reappear" on his chest, talked about the plight of the US dollar with concern. He severely criticized the US's use of the banking system to freeze Russian assets after Putin invaded Ukraine, believing that this was a big fallacy. He lamented: "If a currency can be declared invalid at will by its creator, then it fundamentally loses its value and meaning."

In the back room of the bar, customers are constantly watching the live broadcast of the election results hosted by Bitcoin Magazine. Others are busy checking the latest odds on Polymarket. The bar owner clarified to me that PubKey is not a bar exclusively for Trump supporters, but almost everyone present admitted that they voted for Trump. Interestingly, Trump himself visited this underground bar in September and generously paid for a bunch of cheeseburgers with Bitcoin. However, due to his unfamiliarity with the operation, he had to hand his phone to the bar staff to help complete the transaction.

A 33-year-old man wearing glasses confidently stated that Trump's promised strategic reserve of Bitcoin will surely set off a global buying frenzy. "It's like the space race," he said, vividly. "Countries will spare no effort to hoard as much Bitcoin as possible."

At about 11:15 p.m., David Bailey, CEO of Bitcoin Magazine, excitedly announced Trump's victory on a live broadcast. At the time, he was at Trump's viewing party in West Palm Beach, Florida, wearing a red hat with the slogan "Make Bitcoin Great Again". Bailey said with anticipation: "Now we can put our grand vision for Bitcoin into practice. I am eagerly looking forward to the start of the Orange Presidency and the rise of the Orange Party (referring to the orange representing Bitcoin, not Trump's ochre)."

Fairshake's lobbying efforts have been effective. Its primary target, Congressman Brown of Ohio, lost his seat, and the Senate fell into Republican control, which means that Tim Scott, the top Republican congressman who supports cryptocurrency, is expected to lead the Banking Committee. Fairshake and its affiliated groups have invested $135 million, and as of Thursday, 47 of the 56 candidates they support have been successfully elected. According to data from the nonprofit organization Public Citizen, since 2010, spending in the cryptocurrency industry has accounted for more than 15% of all known corporate spending, second only to the oil and gas industry. Fairshake also said that they have reserved $78 million for the 2026 midterm elections.

The core demands of the industry seem to be about to usher in a turnaround. It is reported that the hot candidate to replace Gensler as the chairman of the U.S. Securities and Exchange Commission (SEC) is actually the chief legal counsel of a brokerage firm that is positive about cryptocurrencies. At the same time, some congressional Democrats who were originally opposed to crypto-industry-supported legislation have also undergone subtle changes in their attitudes.

Rohan Grey, a law professor at Willamette University, pointed out: "The huge investment in cryptocurrency in this election is undoubtedly a stern warning to the Democrats, reminding them not to easily provoke this fight. Because doing so will not benefit them."

Cryptocurrency has become an impeccable special interest group in an era of almost unlimited corporate spending. In order to obtain generous donations from the oil industry, politicians may have to push controversial pipeline projects or allow oil drilling in wildlife refuges despite strong public opposition. However, few people stand up against cryptocurrency because most people are still confused about it.

At the PubKey party on election night, I met a 33-year-old product manager. He admitted that although he could not clearly explain how Bitcoin worked, he was quite fond of it.

"I think no one can explain this thing clearly." His friend interrupted, boasting that he had obtained a generous return of nearly ten times by investing in Bitcoin.

"Maybe it will become the digital gold standard in the future." The product manager said with expectation.

But his friend disagreed and retorted: "That's actually gambling."