The former US president and other presidential candidates will speak at the Bitcoin 2024 conference.
This is really a huge change.
Various parts of the U.S. government have long been very opposed to blockchain.
I never understood the opposition. Who was the opposition? I mean, who other than Senator Warren would vote against financial inclusion for everyone on the planet with a smartphone? It just didn't make sense.
93 million Americans own crypto. They vote. Former President Trump’s comments on May 5th changed everything.
In just two weeks, the market probability of the SEC approving an Ethereum ETF rose from 6% to 100%.
The Watergate scandal taught us a lesson. HR Haldeman warned White House Counsel John Dean not to do this, as he observed:
“Once the toothpaste is out of the tube, it’s very hard to get it back in.”
I feel the same way about blockchain. Satoshi Nakamoto invented it.
Some regulators racked their brains to try to stuff it back into the tube. They eventually gave up. The toothpaste was squeezed out forever.
Once the SEC approved the Ethereum ETF, they effectively admitted that Ethereum is not a security. A U.S. District Court ruled that XRP is not a security (in most cases). That’s it.
I do want to commend the agencies that acted early. The CFTC sent a commissioner to my home in Lake Tahoe in 2014 for our second Blockchain Summit. They hold public hearings and have been studying futures for seven years. The IRS ruled in 2013 that blockchain is property, not currency, and therefore eligible for long-term capital gains tax treatment for holders. They should be commended for getting early and getting it right.
The Bitcoin 2024 conference in Nashville this week is a showcase for our industry. After promoting blockchain at some very small events in the early days, I decided to attend the conference - to give Bitcoin a little more push. I will be speaking at the conference on Friday the 26th.
For the national interest
Reporter: “I remember you saying that cryptocurrencies are a ‘scam’ and a ‘disaster waiting to happen.’ And by the way, you are right. There is a disaster and a fraud.”
Trump: "I've always been right."
Reporter: “But recently, you started embracing the community. You said Bitcoin should be made in the United States. So tell me why you changed your mind.”
TRUMP: “Because the answer is very similar. If we don’t do it, China will take it, China will have it — or somebody else, but most likely China. China is very interested in it. And, it’s not going away. It’s amazing. I met a lot of people — even at the meeting in San Francisco [Trump’s June 6 fundraiser]. I went to San Francisco and met a lot of people — these people are really becoming an industry.”
“Now, if I throw it aside, other countries will pick it up, most likely China — they’re pretty advanced in this area. So, you have to think about it — what I want, again, is what’s good for the country. If we don’t do that…”
— Interview with Donald Trump, Bloomberg Businessweek, July 16, 2024
Distilled to its essence - this is actually correct.
Blockchain is not going to go away no matter how much policymakers hype it up. It’s just going to go to the Bahamas, China, or someplace bad. This suppression has a negative impact on the United States and the constituency of these regulators, the retail investor/voter.
The US Presence: Encryption Regulation and Internet Regulation
The previous stance on crypto asset regulation was diametrically opposed to the rest of the internet.
The US government did build the Internet (ARPANET, which celebrated the 50th anniversary of TCP/IP last year). It then gave early Internet companies a host of congressional advantages. In particular, it gave them regulatory safe harbors and an 8.25% discount by exempting them from sales tax, making them more competitive with brick-and-mortar competitors. The result is that all of the world's largest Internet companies are in the US (or are essentially Chinese copies).
So far in the blockchain era, the U.S. regulatory approach has had the opposite effect. It has scared 95% of blockchain trading into moving to the Bahamas and opaque companies like FTX rather than being regulated in the U.S. Similarly, 93% of blockchain protocol market capitalization comes from projects outside the U.S.
Aligned interests
I love this paragraph. Literally, the next words out of his mouth in the above sentence are:
“The other thing is, I did this NFT thing and stuff. I noticed that 80% of the money was paid in crypto. It was incredible. So, NFTs were very successful. We had a year to sell it out, and it sold out in one day. It was all sold out: 45,000 cards. I did it three times, and I’m going to do it again because people want me to do it again. The spirit of it is incredible. It’s beautiful. But what I really noticed was that everything was paid in crypto, in this new currency. That was eye-opening for me.
“So we have a great foundation. It’s still a baby. It’s still in its infancy. But I don’t want another country to take over this space. So I think we’re going to do well. Also, I’ve gotten to know the people in the industry, and they’re all top-notch people. If you ask Jamie Dimon, Jamie Dimon was very negative before, and now he’s suddenly changed his tune.”
– Interview with Donald Trump, Bloomberg Businessweek, July 16, 2024
Who would have thought? Our interests are aligned! He’s selling digital assets. I’m (investing and eventually) selling digital assets. Wow.
I think this is the most underappreciated development in the market today. Having a president that is aligned with the interests of the crypto community would be a huge shift. Going from an aggressively negative attitude to a positive attitude is a huge shift.
As a visual symbol of this sea change, Pantera portfolio company Bitwise will ring the closing bell at the New York Stock Exchange on Friday.
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