Politicizing Bitcoin

The recent BTC 2024 Conference in Nashville became a platform for political grandstanding, adding to the troubling trend of leveraging Bitcoin and “crypto” rhetoric for electoral gains and creating another entrenched special interest group in the process.

Just wait until this guy forms a lobbyist group—”for freedom.”

There’s so much I want to tell you but can’t. All I’ll say is today was just the beginning. America and the world will be transformed by Bitcoin. We’ve changed the game. Thank you DJT for joining us today.

— David Bailey🇵🇷 $0.65mm/btc is the floor (@DavidFBailey) July 28, 2024

Prominent political figures, including former President Donald J. Trump and independent presidential candidate Robert F. Kennedy Jr., made sweeping promises to court the community, revealing a blatant attempt to capitalize on the sector’s growing influence.

But is any of it real, relevant, or disruptive? Or is it all just a grift designed to enrich insiders at the cost of Bitcoin ever disrupting payments, communications, or data integrity?

Not all people are into bitcoin as a “trade” or investment.

It’s like how not all people join churches for the business networking opportunities or join the military because they want to travel and get free college.

Some people believe in things that are worth fighting for.… pic.twitter.com/HegUR7a44k

— Kurt Wuckert Jr | GorillaPool.com (@kurtwuckertjr) July 26, 2024

Trump’s bold promises

Former U.S. President Donald J. Trump made headlines with his ambitious promises, declaring his intention to turn the United States into a “Bitcoin superpower” if re-elected. Trump’s rhetoric was filled with the familiar themes of persecution and deregulation, aimed at resonating with blockchain enthusiasts who feel threatened by current regulatory measures.

“Sadly, we see the attacks on crypto,” Trump proclaimed. “It’s a part of a much larger pattern that’s being carried out by the same left-wing fascists to weaponize [the] government against any threat to their power. They’ve done it to me.” He assured the audience that the “anti-crypto crusade” of the Biden administration would end on his first day back in office.

Trump’s promises included the establishment of a “strategic national Bitcoin stockpile” and the creation of a “Bitcoin and crypto presidential advisory council.” He also vowed to fire Gary Gensler, chairman of the Securities and Exchange Commission (SEC), a promise that was met with raucous applause from the audience. “Let me say it again: On day one, I will fire Gary Gensler,” he reiterated, emphasizing his commitment to dismantling regulatory obstacles.

Kennedy’s strategic reserve proposal

Robert F. Kennedy Jr. also made a significant splash with his proposal to create a strategic reserve of 4 million Bitcoin, which he dubbed a “Bitcoin Fort Knox.” Kennedy criticized Trump for his previous stance against Bitcoin and questioned the sincerity of his newfound support for the network—which is funny to me because I have been criticizing RFK’s position on vaccine injury advocacy since he does not often discuss how he is one of the most successful trial lawyers in the history of vaccine injury litigation. I think it would be appropriate for him to state this more often so people realize the financial incentives involved in his consumer advocacy work.

But that’s for another article…

RFK Jr. pledges FOUR executive orders related to Bitcoin on day 1 as President:

1. “I will sign an executive order directing the US Treasury to purchase 550 Bitcoin daily until the US has built a reserve of at least 4 million Bitcoin”

2. “I [will] sign an executive order …… pic.twitter.com/xMfE9YPA0d

— Holden Culotta (@Holden_Culotta) July 26, 2024

Kennedy’s proposal directly appealed to the core values of the BTC community, emphasizing decentralization and financial sovereignty achieved by—checks notes—the government holding a reserve of BTC. He highlighted Trump’s past comments describing Bitcoin as a “scam against the dollar” and criticized his failure to pardon Ross Ulbricht, the founder of Silk Road, who remains a martyr figure within the space.

It’s important to point out that he wants to do these things by executive order—the very definition of fiat power of the executive. Not exactly inspiring…

The underlying motivations

The promises made by both Trump and Kennedy underscore a significant shift in the political landscape. The blockchain sector, once viewed with skepticism by mainstream politicians, has now become a valuable constituency. According to Chris Cameron of the New York Times, “Former President Donald J. Trump vowed on Saturday that he would turn the United States into a ‘Bitcoin superpower’ if returned to the White House, wielding much of the same rhetoric of persecution that he has applied to himself and his supporters to appeal to cryptocurrency enthusiasts who want to see less regulation.”

But all of that is not without its own second-order effects, which almost nobody will think about, and that is where the problems will bubble up!

The risks of politicizing Bitcoin

While the political courtship of the blockchain community may seem like a validation of Bitcoin’s importance, it poses significant risks. Bitcoin was created as a politically neutral form of money designed to operate independently of any government or political agenda. It was also designed to be a hard money and electronic cash system.

I have argued at length that BTC is no longer a functional electronic cash, and that since it is governed by UASF-style sybil votes, it is also not a hard money. The politicization of Bitcoin undermines the last of BTC’s remaining core principles and threatens its chances of ever becoming a global, decentralized currency.

Trump’s and Kennedy’s promises of strategic reserves and national stockpiles transform Bitcoin from a neutral financial tool into a nationalistic asset. This shift could lead to increased regulatory scrutiny and geopolitical tensions, further entangling Bitcoin in the web of traditional financial politics.

Moreover, such political entanglements can create market instability. BTC’s price volatility is already a concern for many investors, and integrating it into national strategic reserves could exacerbate these fluctuations. The promise of a strategic Bitcoin stockpile may appeal to voters, but it also risks turning a decentralized asset into a government-controlled entity, contrary to Bitcoin’s foundational ethos, and making it less attractive for nations that could actually use hard money to facilitate trade on neutral ground.

But of course, we already know the U.S. doesn’t want that to happen anyway, so maybe that is the underlying plan for making sure BTC doesn’t become a tool for other nations to de-dollarize international trade.

Lastly, as was mentioned earlier, the more the Bitcoin industry has proximity to the powerful U.S. Federal Government, the more that government and the corporatists within the Bitcoin industry will become symbiotic—and corrupt.

How, you ask? Well, how do you think the banking, defense, pharmaceutical, or any other industry gets entangled with the state? Lobbyism, bribery, and then integration, and that is what I think folks like David Bailey are trying to hitch themselves to: proximity to power and influence.

At least we know what he values! (hint: it’s the price of Bitcoin and little else)

Bitcoin sentiment is so funny to watch. We’re 10% away from an ATH. We’re in the early stages of the next run. Yet people acting like we’re going sideways for the rest of the year. Silly. Once we break out, we will teleport to $100k in a matter of weeks. Chill homies

— David Bailey🇵🇷 $0.65mm/btc is the floor (@DavidFBailey) June 11, 2024

 A call for neutrality

The true value of Bitcoin lies in its ability to transcend political and national boundaries, provide a stable and decentralized alternative to fiat currencies, speed up and add trust to cash payments, and ensure the integrity of data used in commerce. BTC is already quite a bad example of these Bitcoin values. By turning BTC into a political pawn, politicians risk alienating the very community they seek to court. More importantly, they jeopardize Bitcoin’s potential to ever serve as a universal medium of exchange.

Bitcoin’s strength comes from its distributed nature and ability to function outside the control of any single entity. It was designed to be a tool for financial freedom, not a weapon for political gain. The Nashville “Bitcoin 2024” conference should serve as a reminder to the community and politicians alike: Bitcoin must remain politically neutral to fulfill its promise as a tool for global commerce and individual empowerment.

Conclusion

As political figures continue to vie for the support of the Bitcoin community, it is crucial to remember that Bitcoin’s potential for true power lies in its independence from influence. We have already lost so many battles to big payment companies like Mastercard (NASDAQ: MA) and finance magnates like BlackRock. Political neutrality is the last vestige of Bitcoin being a free and global asset, so the more nations adopt the strategy to “hodl,” the more it undermines any of its disruptive capabilities.

But, of course, early adopters and insiders don’t care because on the altar of freedom and Bitcoin’s usefulness, true disruption will be sacrificed and make a handful of people fabulously wealthy.

This is what they tell people the Bitcoin White Paper says. https://t.co/cw5akak4zQ

— Kurt Wuckert Jr | GorillaPool.com (@kurtwuckertjr) July 27, 2024

And, per my most recent article before this one, that’s why we are seeing Trump, Vance, Fink and Thiel all becoming bed-fellows in the same season around bitcoin.

Bitcoin’s adoption should be driven by its technological merits, usefulness in commerce, and the value it provides to users worldwide, not by political expediency. The broader Bitcoin and blockchain community must remain vigilant against attempts to co-opt Bitcoin for short-term political gains. Safeguarding its neutrality is essential to preserving its integrity and ensuring its continued success as a transformative financial innovation, but I am becoming increasingly certain that as long as people are getting rich, very few of them will care about the consequences.

Watch: Teranode is the future of the Bitcoin network