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To investors,
The bitcoin and crypto industry has finally become big enough to enter the political arena. In the last week, we saw President Biden and his administration continue their war path against the growing industry. Within days, President Trump held an event where he not only came out in strong support of crypto, but featured a number of crypto speakers as well.
The politicians are picking sides.
It appears that the left sees their abrasive stance against bitcoin and crypto as something that will have no negative repercussions. The right appears to believe that embracing the new technology could help them gain voters in November.
Regardless of what side you are on, this is a fascinating development.
I thought it may be helpful to share the commentary from a few folks related to these political decisions. First, here is Castle Island’s Nic Carter:
“I’d love to live in the fantasy blank slate world many of your dwell in where new technologies have no partisan mapping and politicians just choose positions tabula rasa but that’s not our world.
Crypto is inherently political and has always been; to the extent leftism relies on the politicization of finance, crypto will be a rightist technology, definitionally. It is delusional to meekly intone that crypto is nonpartisan and hope for the best. This will not be persuasive to leftists whose agenda is threatened by open finance.
It is suicidal not to align yourself with the faction that actively supports your cause”
Balaji Srinivasan followed Nic’s comments with the following statement:
“Crypto is for American conservatives and Chinese liberals. It’s for small countries and dispossessed minorities. Because it gives power to those without state power. Democrats and Communists control powerful states, so they don’t benefit from crypto. But everyone else does.
So I agree with Nic’s point but with one major qualifier: crypto is to the right of American Democrats and to the left of Chinese Communists. In other words, it’s in the global center.”
Unchained’s Laura Shin shared this:
“Gensler and Warren are trying to politicize crypto. If the industry falls into the trap and takes the bait and does the same, then, game over — they win.
If crypto becomes politicized, then automatically 40+% of Americans will be against it without ever really learning about it.
IMO, if the industry focuses on education and explaining what crypto is and why it isn’t and shouldn’t be a political issue, then as the tech becomes more developed and used, there will gradually be more acceptance and adoption without having to overcome the hurdle of it having been politicized.
Take it, leave it, this is just my perspective”
These comments came after massive blowback for an op-ed that was written in Blockworks by Molly Jane Zuckerman titled “Only a fool would vote on crypto alone.”
In the piece, Molly writes:
“What I see is a small number of wealthy individuals, who made that wealth from cryptocurrency, looking for the government to let them continue growing that wealth unfettered.
Among diehard crypto evangelists right now, “voting for crypto” means voting Republican for president. According to this side of the debate, any other decision will virtually assure the death of the American crypto industry.
This fear (true or not) has led some major personalities in Web3 to push crypto supporters into becoming single-issue voters. Their message is clear: Choose your 2024 candidates based solely on their cryptocurrency stance, or else.
In other words, Americans should prioritize their own selfish financial interests over broader societal and ethical concerns. When you promote the idea of voting for America’s crypto industry above all else, you’re deciding to ignore all of the other issues that are really at stake this election season — healthcare access, Social Security, gun legislation, women’s rights, LGBT issues, immigration, to name a few.
I want to be clear — I do not care if you vote Republican, Democrat, or third-party, as long as you care about the issues at stake, and truly believe that the candidate in question is representative of your views. But voting for a candidate you would not otherwise support, simply because they favor the deregulation of a sector in which you hold a profit motive, is a compromise that you should not make.”
Obviously politics has been a controversial subject at any point in history. Add in the tribalism of crypto and you have a cocktail for chaos on the internet.
There seemed to be one thing missing in the conversation all weekend long though…people have been voting for their wallets for decades.
This is not new.
The current president has the lowest approval rating in American history. A big part of that is because majority of Americans are living paycheck-to-paycheck and inflation is more than 50% higher than the central bank’s target of 2% annually.
There are many topics and positions to consider when voting for a candidate, but if you can’t afford to live a relatively normal lifestyle in America then people are going to seek out ways to change leadership.
Bitcoin and crypto are presented as new things. They are from a technology standpoint. But the idea that people are suddenly going to use different criteria to vote doesn’t make any sense to me.
Citizens vote for who will put them in a better economic position. This is why you see incumbent presidents trying to implement various changes during election years, regardless of how bad of an idea the changes are.
Many of you know that I believe the free market is the single greatest referee in the world. This is true in economics, but also true in politics.
Just as the economy and market should be allowed to operate without intervention, the political process should be left untouched. Screaming at people because you don’t like their voting inclination is about as helpful as screaming at a wall.
Everyone’s time is better spent on more productive things. Hopefully this will be the last time I will have to write about crypto and politics before the November election.
Have a great start to your week. I’ll talk to everyone tomorrow.
-Anthony Pompliano
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Jihan Bowes-Little is the Co-Founder & Managing Partner at Bracket Capital, an investment firm focused on special situation opportunities in growth / late-stage private companies.
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Crypto Is Being Politicized Which Should Not Be Surprising