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

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

Meanwhile, Ohio Republican Bernie Moreno, whose campaign is backed by as much as $40 million in funding from cryptocurrency companies, is seeking to challenge Sen. Sherrod Brown for his seat and has proposed holding hearings on terrorists’ use of cryptocurrency.

Around 10:30 that evening, an organizer of a Bitcoin meetup group excitedly announced that according to data from the crypto gambling 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 through the 1 million mark!"

Just last year, such a scenario seemed unthinkable. With regulators looming, token prices are still mired in a plunge that has cost investors dearly. 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 had 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. Looking back 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 there over the years were illegal. This lawsuit, as well as similar accusations against other industry giants, seemed to herald the end of cryptocurrency in the United States.

Armstrong expressed his views at a crypto discussion conference held in New York. He is optimistic that the crypto industry can prompt the government to formulate more favorable regulatory rules. He emphasized that the key lies in the power of money. If the crypto industry wants to have a real voice 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 colleagues in the industry to join in the move. At this time, Ryan Selkis, the former head of the crypto research company Messari, also took the stage and bluntly stated the current situation: "We are being pressed by Ohio pipe welders for funds." "The battle has begun, and we have no way back, because this is about our survival."

His call was not in vain. Fast forward to the 2024 election cycle, and Armstrong has not only hit his fundraising goal, but has exceeded everyone’s expectations. Cryptocurrency companies have generously donated to Fairshake and its partners, with donations totaling more than $200 million, with Coinbase leading the way with a donation of $75 million, making the crypto industry the leader in political donations. Fairshake then carefully allocated these funds to congressional candidates from both parties, and proudly claimed to have helped eliminate House members Katie Porter and Jamaal Bowman in the Democratic primary.

While Fairshake is not involved in the presidential race, 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 in Nashville in July, he passionately announced that he would work to make the United States "the global center of cryptocurrency" and establish a national strategic Bitcoin reserve. He vowed to remove Gary Gensler, the chairman of the U.S. Securities and Exchange Commission, and replace him with someone more friendly to cryptocurrency. "If Bitcoin is destined to skyrocket and fly to the moon," Trump said, "then America must be the leader."

It seems ironic that an industry originally founded on resistance to government control is now pinning its future on politicians. Yet in the 15 years since Bitcoin was invented, 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. (A meme coin called dogwifhat has emerged in the recent crypto resurgence. The token, a copycat of Dogecoin with a puppy in a cap, has a market value of about $2 billion.) These cryptocurrency trading platforms are incredibly profitable, and the U.S. Securities and Exchange Commission has been trying to regulate and even punish them.

The details of the SEC's case are technically complex, but it's easier to understand if we use traditional gambling as an analogy. The commission prefers to limit gambling to a few racetracks and impose strict drug testing on participating horses. The cryptocurrency industry, on the other hand, hopes that the field will be so open that people can bet their homes on live cockfighting in Nicaragua or even pay for a cup of coffee at Starbucks with their winnings.

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

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

Trump also personally promoted the crypto project he founded, World Liberty Financial. The idea was first instilled into Trump's sons by a nouveau riche who called himself the "Internet Wealth Master." Although the crypto industry has concerns about Trump tokens, 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.

At the PubKey bar on election night, two salesmen in their thirties wearing MAGA hats swiped their mobile screens to browse hot topics on X, while joking with a reporter with a smile, saying that if Trump was elected, the reporter would be one of the first "lucky people" to be "sent" abroad. (When leaving, they even hid their hats in their backpacks.) Another compliance officer, who was over seventy years old and wore a retro brooch that read "We Hope Kennedy Reappears," 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, it fundamentally loses the value and meaning that a currency should have."

In the back room, customers were busy watching the live broadcast of the election results hosted by Bitcoin Magazine. Others were 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, but because he was not familiar 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 said confidently that the Bitcoin strategic reserve promised by Trump will surely set off a global buying frenzy. "It's like the space race back then," 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, Ohio Congressman Brown, 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 supported have been successfully elected. According to data from the nonprofit 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 turn around. It is reported that the favorite 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 has a positive attitude towards cryptocurrencies. At the same time, some congressional Democrats who originally opposed legislation supporting the crypto industry have also undergone subtle changes in their attitudes.

Rohan Grey, a law professor at Willamette University, said: "The huge amount of cryptocurrency investment in this election is undoubtedly a stern warning to the Democrats not to pick this fight lightly. Because doing so will not benefit them."

Cryptocurrency has become a near-perfect special interest in an era of virtually unchecked corporate spending. To wring out the oil industry’s largesse, politicians may have to push through controversial pipeline projects or allow drilling in wildlife refuges despite public opposition. But few people are speaking out against cryptocurrency, because most people are still confused.

At a PubKey party on election night, I met a 33-year-old product manager who admitted that he liked Bitcoin even though he couldn’t explain how it worked.

“I think no one can explain this clearly,” his friend interjected, boasting that he had earned a generous return of nearly ten times by investing in Bitcoin.

"Maybe it will become the digital gold standard of the future," the product manager said with anticipation.

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