In 1992, the American alternative rock band Rage Against the Machine hit the music scene. It is widely believed that “the machine” against which they were raging was “that of capitalism and the oppressive structures at the highest levels of society.” If the genesis block on the Bitcoin blockchain embodied the rage against the machine that destroyed the finances of millions in the Global Financial Crisis, Bitcoin 2024 marked the rubicon when that rage became the machine.
Walking into the Music City Center on Day 1, Bitcoin 2024 felt less Bitcoin Conference and more Money 20/20, a Fintech industry mainstay that has evolved from payments to every facet of financial services innovation.
By now, you’ve read plenty about the number of politicians and their impact on this year’s Bitcoin Conference. Ten United States senators and two presidential candidates descended on Nashville to present opinions and policies to win over the digital asset audience. While I had been to Bitcoin Conferences in Miami over the past few years, this year’s agenda promised to be quite different. The political presence at the show highlights just one aspect of how truly institutional the industry has become.
The Politics of Money
Concurrent with the start of Bitcoin 2024, Gemini released a glimpse into its 2024 State of Crypto survey with a special section. While the full Gemini report is slated for release later in the year, the preview provided timely data on a newly researched facet of cryptocurrency ownership, the impact of politics.
According to the report, 73% of American cryptocurrency owners plan to consider a candidate’s stance on crypto when they vote for the next president of the United States. More than a third (37%) stated that a presidential candidate’s position on crypto would have a significant impact on their vote for president.
High Political Stakes
Estimates on the actual number of Americans that own crypto vary widely. Security.org estimates that 40% of American adults now own crypto, with indications the actual number of crypto owners could be as high as 93 million people. The Federal Reserve, on the other hand, estimated that just 7% of American adults (~18 million) used or held cryptocurrency in its May 2024 report, Economic Well-Being of U.S Households in 2023. In its report, Gemini estimates that one in five Americans (21%) own cryptocurrency.
Gemini’s ownership estimate, closely aligned with a 2023 Coinbase estimate, highlights what may be at stake for all political candidates in November. According to Gemini’s data, close to 70 million American adults own crypto. For Robert F. Kennedy, Jr. and former president Donald Trump, currying favor with the American cryptocurrency owners could translate into close to 20 million votes.
While Gemini’s Co-Founders political views, which have been echoed by many technology and cryptocurrency industry leaders, are widely known, Marshall Beard, Gemini’s Chief Operating Officer, offered a more balanced tone, “Crypto [owenrship] should be bi-partisan, or better, not political.”
The Gemini report points out that a lack of legal uncertainty and regulation around cryptocurrency are a concern over 40% of Americans that do not own the asset. It could be reasoned that providing legal and regulatory guardrails could accelerate the ownership of digital assets.
The First Bitcoin President (Maybe) Speaks
As anticipation mounted for the presidential candidates to take the stage, there was much speculation around how each would support Bitcoin and the Bitcoin Community. While both candidates echoed popular themes, it was a matter of style vs substance. Undoubtedly, RFK, Jr. and Trump piqued the interest of their audiences, but in very different ways.
Both candidates advocated for the adoption of Bitcoin as a Strategic Reserve currency, a strong signal of support for Bitcoin and its future value, and their disapproval of a Central Bank Digital Currency (CBDC), often seen as a potentially nefarious tool for governmental exploitation.
RFK, Jr. held intellectual court and worked through a number of points that signaled his in-depth knowledge of and enthusiasm for cryptocurrencies, even pointing to the investment of, “every dollar of [his] Monsanto class-action suit earnings into Bitcoin.”
For his part, former President Trump rallied the crowd around self-reliance, the shrinking of government, and most of all, support for Bitcoin. So impassioned was Trump’s plea, the crowd roared with approval on his proposals, some of which could run counter with the former president’s traditional base of support.
Throughout the show, a retinue of Republican Senators provided detail around initiatives Trump laid out during his speech. After the former President’s keynote, Senator Cynthia Lummis (R-WY), presented draft legislation detailing the purchase of 200,000 Bitcoin per year over five years to establish a Strategic Bitcoin Reserve.
CBDCs: They’re From the Government And They’re Here To Help
In a visual report citing the risks of CBDCs, the Cato Institute asserts that a CBDC could be disastrous for the few remaining privacy protections that citizens enjoy.
In the report, BIS General Manager Augustin Carstens states, “The key difference with the CBDC [and paper fiat currency] is the central bank will have absolute control on the rules and regulations that will determine the use of that expression of central bank liability, and also we will have the technology to enforce that.”
Bitcoin as a National Defense Tool
RFK, Jr. also highlighted a fairly novel point of view proposing the need for American dominance in Bitcoin as a proxy for a strong national cyber defense.
In his MIT graduate thesis, Softwar: A Novel Theory on Power Projection and the National Strategic Significance of Bitcoin, Jason Lowery posits that proof-of-work technologies like Bitcoin could be the basis on a new form of power projection, “empower[ing] nations to secure their most precious bits of information . . . against other nations in, from, and through cyberspace.” So enamored with Lowery’s work, RFK, Jr. proposed tapping Lowery to lead US cyberdefense.
Hitting The High Notes
As former President Trump delivered his speech, the crowd frequently roared its approval. When Trump delivered his promise to “fire [SEC Chair] Gary Gensler,” the crowd buoyed the former President’s spirits so much, he repeated it to perfection to the accolades of the audience.
Equally , the crowd roared when Trump promised to free Ross Ulbricht, who is currently serving a life sentence as creator and operator of the Silk Road marketplace. For many non-cryptocurrency users, including politicians, Silk Road has often served as Exhibit A against the proliferation of Bitcoin and other cryptocurrencies.
In 2019, former President Trump said, “I am not a fan of Bitcoin and other cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air. Unregulated cryptoassets can facilitate unlawful behavior, including drug trade and other illegal activity.”
As cryptocurrency has matured, however, we now know that rather than aiding and abetting criminal activity, blockchain technology is far more adept at monitoring and preventing this behavior. A Chainalysis research report recently showed that approximately 1% (roughly $22.4 billion) of total transaction value could be tied to illicit activity in 2023.
As the BIS’ Carstens points out, “ We don’t know who’s using a $100 bill [or] a 1,00 peso bill today.” Alternatively, blockchain technologies provide investigators with a clear and public transaction records to monitor and detect suspicious activity more easily.
The Enemy Of My Enemy Is My Friend
Gemini’s State of Cryptocurrency preview highlighted that one in five (18%) of people polled advocated for more government oversight. Of note, 41% of survey respondents voiced the opinion that stricter laws would increase trust in the industry. These figures point to a community that seeks to preserve the options that digital assets provide them against central bank issued government fiat currencies while maintaining protection against bad actors in the space.
The growing number of cryptocurrency users in the United States (and globally) present politicians with the opportunity to capture needed support. “Secular trends show an increasing number of cryptocurrency owners. Other jurisdictions have been more forward thinking on digital assets [the European Union’s MiCA] and have level-set rules for everyone,” said Marshall Beard.
The opportunity at hand is great for the Bitcoin community and the politicians that support it. The current administration has remained mute on its stance since Bitcoin 2024, but previous actions point to a distrust in cryptocurrencies, leading to a continued erosion of trust and faith in the industry.
In contrast to promises to hold Bitcoin in the United States’ possession as the basis for a strategic reserve, a government wallet transferred approximately $2 billion in Bitcoin, sparking selling pressure and anger in the market. Bitcoin sold off ~4.5% after almost touching $70K on Monday.
“Just when you think all the excess supply dumping is over, the current admin finds another way to screw us,” stated Charles Edwards, Founder of Capriole Fund on X.
For the Bitcoin community, the election of the first Bitcoin President could add much sought after stability and signal the acceleration of regulation and infrastructure support to cement Bitcoin’s relevance in not only our finances, but almost every aspect of our lives.
