Trump shifts stance on cryptocurrency to win over new bloc of voters and mega-donors

Cryptocurrency’s largest annual conference featured a gathering of leaders, celebrities, tech industry insiders, and crypto-enthusiasts. Both Donald Trump and Robert F. Kennedy Jr. spoke in favor of boosting crypto during their remarks. The rise of cryptocurrencies has created a new bloc of mega-donors candidates are trying to win over. William Brangham discussed more with David Yaffe-Bellany.

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Geoff Bennett: This weekend, crypto currency’s largest annual conference took place in Nashville, Tennessee. It was a gathering of leaders, celebrities, tech industry insiders, and crypto enthusiasts.

But former President Trump and independent presidential candidate Robert F. Kennedy Jr. spoke in favor of boosting crypto during their remarks there.

As William Brangham tells us, those speeches may be aimed at getting support this fall from tech leaders and start-ups, who have a growing voice on these issues.

William Brangham: That’s right, Geoff.

The incredible rise of Bitcoin and other cryptocurrencies have created a new bloc of megadonors that voters and presidential candidates are now trying to win over. Former President Trump, who initially denounced cryptocurrency as — quote — “highly volatile and based on thin air” back in 2019, reversed himself in his speech to the conference last Saturday by promising to make the U.S. the crypto capital of the world.

Donald Trump, Former President of the United States (R) and Current U.S. Presidential Candidate: If crypto is going to define the future, I want to be mined, minted and made in the USA. It’s going to be. It’s not going to be made anywhere else.

(Cheering)

(Applause)

Donald Trump: And if Bitcoin is going to the moon, as we say, is going to the moon, I want America to be the nation that leads the way. And that’s what’s going to happen. No, you’re going to be very happy with me.

William Brangham: Joining me now to discuss the ramifications of all of this is David Yaffe-Bellany from The New York Times.

David, thank you so much for being here.

Help set the table for us for people who have not been following us — this that closely. Remind us of where crypto was after its big fall and now it’s sort of resurged in the marketplace.

David Yaffe-Bellany, The New York Times: The last time most ordinary people tuned into the crypto industry, top executives were going to prison. The market was in freefall. And a lot of these kind of risky investments had been widely dismissed as worthless or scams.

But a lot has changed since then. In January, the federal government approved a new investment product that’s tied to the price of Bitcoin. And when that product started trading, it kind of opened up access to the crypto market to a whole lot of people who hadn’t invested in it before.

And, as a result, the price of Bitcoin surged. It reached its record high a few months ago. And the prices of some of the other big crypto tokens have followed suit.

And so the industry is in a much healthier state today than it has been for the last couple of years.

William Brangham: So, as we just heard, the former President Trump made this very explicit pitch to the crypto world, saying, I might have been a skeptic before, but now I’m in full-bore.

What is his pitch? And why is this happening now?

David Yaffe-Bellany: Look, the crypto industry is furious about the way that it’s been treated by the federal government. The Securities and Exchange Commission has embarked on a pretty aggressive crackdown on crypto companies, a crackdown so severe that it’s essentially an existential threat.

It could drive the industry out of the United States if it’s successful. And so the embrace of Trump is really a response to that. And a cynical reading of this is that Trump is kind of opportunistically seizing on what’s happening under the current administration, seeing an opportunity to attract donor dollars from the crypto industry.

And sort of that’s why he’s making this pitch, promising that he’s going to turn the U.S. into a kind of inviting sort of capital for crypto companies, rather than the sort of aggressive cop on the beat that it’s been over the last couple of years.

William Brangham: Let’s talk about that cop on the beat currently. That’s the Biden administration’s cop on the beat. What is it that they’re doing and what is their argument about why they need to be such a tough cop?

David Yaffe-Bellany: Sure.

So, the leader of this push is the chair of the SEC, Gary Gensler. And the argument that he has made over and over is that most cryptocurrencies are essentially securities, which is to say that they’re just like stocks and bonds that are traded on Wall Street, and that they ought to be regulated as such, and that crypto companies should have to make all the sorts of disclosures and follow all the same rules as people who offer those traditional investment products.

That is a legal argument that the crypto industry hates. They’re fighting back against it, saying that if the SEC beats them in the courts on this issue, then they will be driven out of the United States. So that’s sort of the crux of the debate.

And Trump went in front of a crowd of Bitcoin supporters over the weekend and said, one of my first acts as president will be to fire Gary Gensler. And it got probably the biggest cheer of the day.

William Brangham: So do we know what Vice President Kamala Harris might do if she were elected? Is it safe to say she would just continue the Biden administration’s current approach?

David Yaffe-Bellany: It’s hard to say for sure. She hasn’t said a ton publicly about her views on crypto, but obviously she’s part of the current administration.

And so a lot of crypto insiders are kind of assuming that, if she wins, it’ll be more of the same that they saw under the Biden administration. With that said, both the Biden campaign and now the Harris campaign have extended something of an olive branch to crypto companies, sort of invited them to come to the table and sort of talk about the policy changes they would like to see.

But the reaction among crypto executives has been pretty skeptical. Essentially, it’s been, your talk means nothing to us. We have seen what you have done over the last four years and, frankly, we don’t trust you.

William Brangham: We’re talking about crypto here, but there has been in the broader tech world, as well as in the V.C. world, the venture capital world, the seeming move towards Trump and supporting Republican candidates.

Is that all about this concern over too strict enforcement, as they see it?

David Yaffe-Bellany: That’s really probably the key part of this. Even tech people who aren’t directly involved in the crypto industry sort of see what’s going on and say this is an administration that’s cracking down on innovation.

And there’s a fear that there might be a crackdown on the A.I. companies that are proliferating now. And so that’s a lot of what’s driving the kind of rightward shift of the Silicon Valley elite toward Trump. But there are other factors as well.

A lot of these top figures in the tech world have kind of bought into concerns about cancel culture and wokeness run amok. And so there are some of those kind of cultural issues at play here as well.

William Brangham: And I’m sure it’s also true that billionaires like tax cuts, which Donald Trump is promising more of as well.

David Yaffe-Bellany: That’s for sure.

William Brangham: David Yaffe-Bellany of The New York Times, thank you so much for being here.

David Yaffe-Bellany: Thank you.