A Trump bitcoin promise is what crypto fans once fought against. They love it anyway

Much of the hype fueling bitcoin’s rally centers on expectations that President-elect Donald Trump will usher in a pro-crypto agenda, bestowing legitimacy on an industry that for years has been dismissed by the mainstream investor class and stonewalled by regulators.

“The rally that we’re seeing is more of a normalizing of what the market dynamic should be around the crypto sector,” Faryar Shirzad, chief policy officer at Coinbase, told me Tuesday. “I think what we’re seeing is a real, live demonstration of how much the political headwinds that we’ve been facing over the last four years have suppressed the crypto markets.”

Trump, who as recently as 2021 said crypto “seems like a scam,” did a 180 on the industry earlier this year, in an apparent change of heart that coincided with the sector’s rebound from its disastrous 2022 (marked in part by the collapse of crypto exchange FTX and the criminal prosecution of its once-high-flying founder, Sam Bankman-Fried). Part of that comeback involved a Coinbase-led political mobilization and tens of millions of dollars in crypto profits being funneled into various races around the country, making it the biggest-spending industry in the 2024 election cycle.

At a giant bitcoin conference over the summer, Trump made two key promises to his audience: First, he would fire Gary Gensler, the Securities and Exchange Commission chair and the industry’s arch nemesis. (Technically, the president can’t fire the SEC chair, though Gensler is widely expected to resign, as is customary when a new administration comes in.) And second: He would create a national bitcoin reserve by preventing the government from selling the assets it has seized in criminal cases.

The second promise from Trump was a bit vaguer, and it may well have been lip service to avoid being upstaged by Robert F. Kennedy Jr., who a day earlier pledged an even more ambitious “bitcoin Fort Knox” to make Uncle Sam the largest holder of bitcoin globally.

Either way, the result is effectively the same: The US government would backstop the price of bitcoin, an asset built on the idea that governments shouldn’t be able to manipulate currency values to suit their interests.

I asked several experts this week about that apparent inconsistency in the crypto ethos.

“Having the government establish a strategic reserve is completely incongruous with much of the ideological side, which is supposed to be about decentralization and antiauthoritarianism,” said Molly White, a journalist and prominent crypto skeptic. “But I think there is this belief among some cryptocurrency enthusiasts who say ‘Well, fine, it’s not really part of the ideology, but it makes the price go up.’”

The more generous take may be that, at this point, crypto’s only real use case is in creating value that can be traded and wagered on. Or, as Bloomberg’s Zeke Faux put it last week, “using real money to gamble on the prices of made-up coins.”

At a basic level, a strategic reserve “fully legitimizes bitcoin as an asset class with global systemic significance,” Yesha Yadav, a law professor and associate dean at Vanderbilt University, said in an email. “This, by itself, represents an enormous symbolic win for the crypto industry that two years ago was being spoken of as dead in the water.”