This blog post first appeared in Newsweek. The article was written by BPI fellows Andrew Bailey, Bradley Rettler, Craig Warmke and Troy Cross. They were also joined by Kyle Saunders, Professor of Political Science at Colorado State University.
Former President Donald Trump once sang the same tune about bitcoin as many other world leaders. Like Hillary Clinton, Elizabeth Warren, Turkey's Recep Erdogan, the Biden White House, and the Communist Party of China, Trump was against it. "Seems like a scam," he said. "I don't like it because it's another currency competing against the dollar."
Unsurprising, really. Powerful people usually don't care for disruptive technologies that compete with the systems they control.
But the tone is shifting, driven by bitcoin's steep growth in users, an increased recognition of its merits, and the crypto industry's arrival as a fundraising and lobbying juggernaut. Fairshake, the new crypto PAC, has raised $177 million, putting it fourth amongst all PACs and less than $1 million behind Make America Great Again Inc.
Trump's message on bitcoin has also shifted. He now ties bitcoin to his America-first agenda: "We want all the remaining bitcoin to be MADE IN THE USA!!!" He now calls himself the "crypto president," promises to protect bitcoin from "Elizabeth Warren and her goons," and vows to dismantle the hostile regulatory environment orchestrated by the Biden White House. The recently published GOP party platform featured an explicitly pro-bitcoin plank. And, in July, Trump headlined the world’s biggest bitcoin conference.
Crypto adoption is following the path of the internet. It's a rapidly growing industry, well-heeled, and has faced unfair regulatory headwinds and legal persecution. The crypto vote was ripe for the picking by anyone, blue or red or—orange. Trump simply seized the opportunity. That's politics.
Bitcoin is a force of its own, however. In fact, it's a Trojan horse. While some tout bitcoin to line their pockets and others to fill the ballot box, bitcoin exists for neither. In essence, bitcoin is resistance money. It serves those outside the halls of power—especially those vulnerable to financial censorship. Our political and financial elites likely have no need of bitcoin—not unless they themselves someday face political persecution. Censorship-resistant money isn't for the censors—it's for everyone else.
Trump's most strident critics paint a dark picture of a second term—an emboldened president, immune to criminal prosecution, vengeful, plotting against his political enemies, and cracking down on free speech and other civil liberties. Yet, at the same time, they cheer or even conspire for bitcoin's demise. Instead, Democrats should pivot toward bitcoin as insurance in case their fears materialize. Better yet, a pro-bitcoin posture could help prevent Trump's victory in the first place.
Consider first bitcoin as an insurance policy against authoritarianism. We've seen authoritarian crackdowns in other countries, so we can learn from them. Modern authoritarians routinely bend banking systems toward their own ends. They hobble their opposition by strangling financial flows and seizing assets. Russia's Vladimir Putin is typical. Russia famously de-banked the late opposition leader Alexei Navalny and his Anti-Corruption Foundation. Russian activists, journalists, and business leaders have also been financially excommunicated.
In the event of a repressive Trump regime, you will wish you had money that resists censorship—money that an authoritarian cannot control. You will wish you had bitcoin, in other words. Bitcoin, the asset, lives on its own network and operates without the cooperation or permission of financial intermediaries—the very pressure points that enable financial censorship in traditional finance.
Many worldwide have used bitcoin to route around authoritarians. Nearly two dozen human rights advocates from 20 countries attested as much in a 2022 letter to congressional leaders. Famously, Navalny adopted bitcoin in 2016 to route around his censorable Russian bank accounts and funding channels. His organization, the Anti-Corruption Foundation, still uses bitcoin. They did so to pay for his funeral earlier this year, according to CFO Anna Chekhovich.
Censorship-resistant money alone cannot protect civil liberties; encrypted messaging and censorship-resistant publishing protocols are necessary tools too. So is a populace prepared to deploy them in a spirit of resistance, and to defend them in court when necessary. Those who predict a dystopian second Trump term should embrace all these tools and learn how to use them effectively.
Trump hopes to vacuum up the crypto vote. Democrats would be wise to do the same. Recent polls suggested that some swing voters in battleground states care about crypto. Democrats hoping to block a Trump victory in November could court their favor by easing up on recent regulatory crackdowns, treating bitcoin miners fairly and like any other purchasers of energy, and focusing enforcement efforts on actual criminals such as Sam Bankman-Fried, rather than harassing software developers who build privacy tools for bitcoin. As an olive branch, Democrats could also support the bitcoin network as a peaceful mechanism for exporting American values worldwide.
A pivot along these lines needn't be an empty and cynical grab for votes. For it would reflect the stated values of anyone who claims to care about people on the margins. Bitcoin does not discriminate on the basis of creed, color, gender, or ideology. It offers the same services to the powerful and the powerless alike. For a party that touts financial inclusion and equality, bitcoin is a natural fit.
The Democrats could neutralize Trump's recent efforts to capture the crypto vote. With thin margins in battleground states, a few hundred votes could make a difference.
Bitcoin is a tool—and an increasingly important topic in American politics. Donald Trump is willing to use it to his advantage. Are his opponents?
