Cryptostatecraft and the return of Donald Trump to the White House
‘Voter anxiety over the economy and a desire for change returns Donald Trump to the White House,’ reads one of the many headlines explaining Donald Trump’s re-election in 2024. The German Tagesschau correspondent in Washington dramatically states, ‘even though Americans were concerned with threats to democracy, at the end of the day, they prioritised their own personal lives.’ In an analysis of the most relevant data points from the election, The Financial Times finds that ‘Democratic support depends on high-income voters,’ and that ‘poorer and less-educated voters now think Republicans best represent them’.
At the same time, crypto news reports: ‘Trump’s win ignites a crypto frenzy that sends Bitcoin to a record high.’ And indeed, since the election Bitcoin has briefly surpassed an all-time high of $100,000 and the overall market capitalisation of the crypto industry has grown by 30% to $3.2 trillion. In another all-time record, crypto donations to the US elections totalled $248 million, accounting for 48% of all corporate political donations, primarily funnelled through crypto super PACs like Fairshake. Pro-crypto senators have defeated their anti-crypto counterparts in nearly every state. In addition, according to crypto news outlets, 247 pro-crypto candidates have been elected to the House of Representatives, making the incoming Congress the most crypto-friendly ever and highly likely to adopt pro-crypto regulation in the coming years.
One way of understanding the ‘big shifts in the US electorate’ in this election is to read voters focus on economic concerns and crypto’s success in the elections in conjunction. This convergence indicates an overall lack of trust in established institutions and a willingness to find alternative avenues when it comes to securing a desirable future. The promise of meritocratic upward mobility has lost its credibility, and people are looking for ways to bet on a better future. As The Atlantic titled on 11 November ‘The Cost-of-Living Crisis Explains Everything,’ citing that real household income fell relative to the pre-Covid levels, that poverty and jobless rates increased, and that mortgage rates more than doubled, rendering American life unaffordable. So where to turn? Trump’s election should be read as the “trickling up”’ of ‘the normative and social consequences of rising inequality’ as recently described by Nehal Bhuta. The turn to crypto currencies and speculative assets is a response to the lack of institutional pathways toward secure collective futures. Or to put it with Keeanga-Yamahtta Taylor, it is ‘the distance between what people want and the method, the vessel, the vehicle by which we can achieve that.’
What crypto offers is a ‘maybe get rich’ scheme open to everyone willing to play the market. If the state won’t secure my future, maybe a fortune in crypto will. It only takes a couple of clicks for anyone to set up a wallet and become a day trader. Crypto’s disruptive and uncategorisable workings seem to strike the same chord as Trump’s political campaign as a populist revenge of the ‘degens’ that is at once provocatively absurd, politically violent and extremely successful. Just as Trump’s endless scandals, indictments and legal troubles fail to deter voters, crypto’s history of scandals, Ponzi schemes, and alleged frauds do not seem to stop people from buying into it. According to research institute Pew, about 15-20% of Americans hold cryptocurrencies on both sides of the political spectrum and across colour lines. According to crypto consulting firm Triple A, crypto ownership in the US increased by 38% in the past year. The hope of getting rich with crypto is also palpable by popular cultural memes like HODL and WAGMI and industry publications like the Crypto Wealth Report showing the increase of crypto millionaires worldwide by 95% in the past year to a total of 172.000 across the globe.
The message is one of winning the game by subverting the rules. And winning the game is measured in financial success. By this metric, the above-mentioned crypto super PACs could not have possibly done better. Even though it would take serious chain analytics to get exact numbers, it is likely that the expenditure in campaign contributions has already been more than recovered by the price surge of the crypto markets. Crypto enthusiast would say that this was a safe bet, relying on the numbers of crypto prediction markets, like Polymarket, amassing a volume of $2 billion on election bets by approximately 250,000 accounts and placing the likelihood of a Trump win at 56% on election day. Magically refilling the coffers despite appearing to be losing money has always been one of crypto’s most remarkable tricks. It made waves in the resolution of The DAO hack in 2016, it can be traced through the overnight monetisation of testnets, or more simply, in the generation and distribution of mining or staking rewards. Like Trump’s rhetoric, crypto comes across as a mockery of the establishment and its rules. The recent creation of the ‘Department of Government Efficiency’ (DOGE) to be headed by Elon Musk and Vivek Ramaswamy can hardly be read any other way. The 2021 proclaimed CEO of Dogecoin who sent a Shiba Inu dog meme to the moon and wants to make his own laws on Mars, is now officially appointed as the head of a US government office. All of this while sending the Dogecoin price through the roof with an increase of 180%.
Can this be real? Did they really just do that? The level of disbelieve at these developments indicates the degree to which the established rules of the game are being subverted and how seriously we should take the proclamations of a fundamental shift in the government apparatus in the United States. As much as to an outside observer this shift might seem to come out of nowhere, it is actually the most intense manifestation of a deep-seated and well-nourished philosophy revolving around the techno-authoritarian gospel of Peter Thiel drawing heavily on ‘the house political philosopher’, anti-egalitarian and neo-reactionary writer Curtis Yarvin, equally admired by incoming Vice President J.D Vance. Most famously known for writing under the pseudonym Mencius Moldbug and having created the Dark Enlightenment together with Nick Land, Yarvin’s core proposition is a form of anti-democratic corporate governance, a shareholder sovereignty. This idea has also been propagated by the Seasteading Institute promoting the development of ‘startup communities that float on the ocean with any measure of political autonomy’, co-founded by Peter Thiel and Patri Friedmann, grandson of Milton Friedman. Micro-sovereignties developed around autonomy and organised through markets are the institutional set up libertarians dream of and crypto has just brought them a good step closer. The efforts of venture capitalist and former Coinbase CTO Balaji Srinivasan, yet another disciple of Yarvin, on ‘The Network State’ provide a glimpse into cryptostatecraft at its worst. Cryptostatecraft encapsulates the transformative potential of blockchain technology in shaping new societal structures that can take the shape of coopting state mechanisms to advance the interests of crypto businesses and secure crypto wealth. What to make of cryptostatecraft? How to dis/engage it? And how to keep up with its acceleration in accumulating power, capital and territory?
To be clear, none of the above is to say that racism, misogyny, and conservative values did not play a significant role in Trump’s election. It is also not to legitimise the many crypto scams that leave people penniless, nor the neo-conservative, white supremacist and often sexist tone of much of the crypto world. It is also not to deny that financialised market relations conceal labour relations of exploitation and that contributing to DAOs is extremely precarious. All of this is true. But it is to say that the proposition of strengthening the existing institutions to advance a redistribution of wealth, as the Democratic Party tried, appears to be a desperate attempt to revive the long-broken promise of the liberal horizon of justice.
More importantly, it is also to say that speculative activities are attractive, taste of freedom, and create their own sense of community, even if accompanied by loss and despair. The moralisation of speculative activities, as we see with crypto, is by no means new. As Aris Komporozos shows in his recent book Speculative Communities, ‘whether speculation is rational or irrational became a key battleground in the conflict between markets and publics during the nineteenth century’s concluding decade’, tracing how distinctions between deviant gambling and formalised speculation have historically been drawn along lines of race, class and gender. Embracing this understanding, other parts of the crypto community have also created an enormous number of projects trying to develop alter-economies, far too many and diverse to list here. So let me put it in more abstract terms with Erik Bordeleau: ‘We too have a code’ means leaning into the speculative age and drawing up ‘Protocols for Postcapitalist Economic Expression’ from below. Against this background we can see that the role of crypto in the US election expands far beyond an inexplicable fancy of a few crazy bros. Ultimately, it signals a profound shift in societal dynamics, challenging traditional systems of governance and raising critical questions about who has the power – and the audacity – to bet on the future.