Bitcoin Breaks Through

Almost everybody in the Bitcoin world is already going to be aware of the headlines former President Donald Trump made last night at the Bitcoin 2024 conference.

At Bitcoin 2024, Trump pledged that if re-elected, his administration would retain all federal Bitcoin holdings, establishing a "strategic national bitcoin stockpile." He highlighted that the federal government currently possesses nearly 210,000 bitcoins, about 1% of the total supply, mostly seized from cybercriminals. Trump promised that his administration would never sell this Bitcoin, adhering to the fundamental Bitcoin principle of holding.

Additionally, he vowed to fire SEC Chair Gary Gensler on his first day in office, criticizing Gensler’s stringent regulations that many believe have hindered innovation in the crypto industry.

Anyway you slice it, last night was a flurry of positive Bitcoin-related headlines hitting the wire as soon as Trump took the stage and began speaking to the crowd of crypto enthusiasts. The idea of bitcoin as a reserve asset has always been the holy grail for maximalists and Trump’s speech sent the idea of a bitcoin “standard” to supersonic speeds.

And while there’s been plenty of speculation online about Trump’s motives, with some saying he’s simply fishing for votes from wherever he can get them, it doesn’t matter at this point: the game theory snowball of a Bitcoin “standard” has officially started rolling down the hill.

Photo: New York Times

This pro-Bitcoin psychology and reserve asset game theory, and what it could do for the world of Bitcoin regardless of whether or not Trump is elected, cannot be understated.

The Bitcoin community has now, for the first time, seen a former and potential US president endorse the cryptocurrency as a strategic reserve asset for the country. This is multiple times more consequential than Wall Street listing Bitcoin ETFs, in my opinion, because it accelerates Bitcoin's adoption regardless of whether or not Trump is elected our next president. The idea that the United States could potentially make Bitcoin part of a monetary standard has officially been launched into the orbit of the country’s economic zeitgeist.

For comparison, when I started to warm up to the idea of Bitcoin about 6 months ago, I speculated that Middle Eastern money would be the next, after El Salvador, to put Bitcoin on a sovereign balance sheet. From there, I speculated such a move could unleash a tsunami of game theory, with multiple other countries scrambling to catch up across the world, not unlike the way Democrats — the party of Elizabeth “Ban Crypto” Warren — are now scrambling to play catch-up and modify their position stance on crypto.

Too late, losers.

If you would have told me months ago that one of the two major United States presidential candidates and a former president would be the first to assure the world they would place Bitcoin on the sovereign balance sheet of the most powerful nation in the world, I would have been assured the rest of the world would follow.

That is exactly the case that is unfolding.

And, by removing the red tape in the world of Bitcoin, not only would the Trump administration send adoption of the asset to stratospheric levels, it would also be the first tacit public acknowledgment that the fiscal crisis unfolding in the United States is not sustainable and must be dealt with via means other than printing dollars.

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In other words, holding a bitcoin reserve would represent an attempt at a strategic move to sound money, regardless of whether or not Bitcoin itself stands the test of time.

Yesterday not only marked a momentous occasion for Bitcoin, it marked a momentous occasion for everybody on the Austrian side of the economic aisle who has been waiting for a politician to begin to make serious concessions that the fiscal trajectory the country and the dollar are on is not sustainable. It was a limited hangout of sorts – a passive admission that eventually, the country is going to need a solution to its monetary problem that is outside the Keynesian pattern of simply printing more fiat.

And so even if you are first and foremost an advocate for gold or silver, like I am, it’s easy to see last night's comments by President Trump as not just a victory for Bitcoin but a victory for economic common sense.

Just think about this: two major presidential candidates in the United States, both Donald Trump and Robert F. Kennedy, have now publicly come out and supported Bitcoin. That, in and of itself, is enormous.

Even more consequential is the fact that the pro-regulation Orwellian juggernaut known as the Democratic Party, which can never seem to have enough oversight or control on how people live their lives, including saving and spending their money, has begun to realize they are fighting a losing battle.

This was evident last night when headlines started to cross the wire around the time of Trump’s speech that multiple Democrats were urging Kamala Harris to walk back her stance on being anti-crypto. This is a monstrous pivot, especially given that party cornerstone Senator Elizabeth Warren has been the most outspoken critic of crypto over the last few years. The pivot is too little too late in my opinion — Democrats are already playing second fiddle with crypto adoption.

In other words, the oft-touted adage that “you don’t change Bitcoin, Bitcoin changes you” seems to have once again rung true. History appears to have shown that eventually, people fall in line behind Bitcoin as long as it remains what the people want. Trump’s foresight to be first to figure out that it’s not worth fighting crypto advocates, but rather joining them, could wind up being one of the most consequential decisions that will determine the outcome of the 2024 election.

What’s a better argument for a populist campaign than offering populist ways to save, store and preserve your wealth?

As I wrote earlier this year in my first article about Bitcoin, Bitcoin will work if the people decide they want it to. It’s one of the few instruments that I’ve seen over the years capable of returning some power to the people in the world of economics. And despite Harris flip-flopping and scrambling to right her position on the issue, not unlike what she is doing with issues like banning fracking, having the freedom to choose how you want to store your wealth – even if it turns out to not be effective – is congruent with freedom and personal liberty. And freedom and personal liberty are far more aligned with the Republican party right now than the party that advocated for us to wear masks while outside at the beach, three years into Covid.

If Trump was smart, he would continue tapping into the independent and libertarian base in the country by announcing that, if elected, he would make RFK Jr. his Bitcoin czar. In my exclusive interview with RFK, Jr. several weeks ago, he told me he was exploring ideas similar to Trump’s:

"One of the issues that we're toying with now is a Treasury bill that is based at least partially—maybe starting at one percent and increasing it—on a hard currency. On base currencies, like maybe a basket of currencies that include platinum, gold, silver, and Bitcoin. You know, my uncle tried to do something like this just before he died with the silver certificate and the gold certificate, to give Americans a hedge against inflation.
"And there are lots of ways we can do that. We're talking about making, for example, Bitcoin available and stopping the war against Bitcoin so that middle-class people, working-class people who want to hedge against inflation can do that. They don't have to rely on fiat currency.”
“And that will insert a discipline into the printing of money. If Americans have a choice, it will inject a discipline into the printing of money that we do not have right now.”

Perhaps Trump could also take on Michael Saylor as an advisor. Saylor said to me in my exclusive interview with him that Bitcoin adoption would be inevitable due to “the inefficiency of central government or central banking planners”. He appears to be right so far: the people are driving Trump toward Bitcoin, not the other way around, and when the people want something, elected officials have no choice to but to conspire to make it happen.

And so while the price of Bitcoin dipped last night after Trump’s speech, this was likely only a classic “sell the news” event after a week leading up to Trump’s speech where people were bidding up the price.

The launch of Bitcoin ETFs this year was a major shot in the arm for the adoption of the digital asset and one of the reasons I began to strongly reconsider my position on Bitcoin. As sad as it is, if Wall Street gets behind an idea, it has a way of finding adoption, even if it eventually also peters out or collapses in value down the road.

Similarly, when the United States as a country gets behind an idea, it also has a way of creating aftershocks worldwide. My contention is that if Bitcoin makes it for the long haul, the world could potentially look back at Trump’s comments this weekend as an inflection point in American history, American monetary policy and potentially the day even more doubt in Bitcoin’s long-term sustainability died.

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As a quick disclaimer and reminder, I still believe there is significant risk in owning Bitcoin. Bitcoin is an unprecedented monetary experiment and it is extraordinarily volatile. I keep only a portion of my net worth that I am OK with losing in Bitcoin and consider the bet to be speculative in nature.

Personally, I perfer apps like Swan for buying Bitcoin on a recurring basis, which, in my opinion, is important to help alleviate the volatile swings in the asset. Anyone that wishes to use my referral link at Swan will get $10 in free Bitcoin to start.

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