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The world of politics has been focused on the infrastructure bill as it has been debated over the last few weeks. The most surprising thing to the incumbent political class has been how quickly and effectively the bitcoin and crypto industry were able to mobilize.
Whether we are talking about phone calls, tweets, or traditional lobbying efforts, it feels like the industry went from 0 to 100 in a matter of days. This was possible because the industry has an incredibly engagement online community that isn’t scared to voice their opinions. Additionally, there has been incredible wealth generated in an industry that went from $0 to about $2 trillion in market cap in a little over a decade.
When you combine wealth and engagement, you have a recipe for action. The surprising thing in my opinion has been the response from the incumbent political class though. There are still a good portion of them, both elected officials and those who generally operate around them, that seem to believe this is an anomaly. They are utterly befuddled by what is happening, yet they seem to think that the crypto industry will move on to something else once this bill is voted on.
As you probably guessed, I tend to think that this conclusion is inaccurate. First, it is very clear that the bitcoin and crypto industry will continue to lead to more innovation, economic production, jobs, and technological progress. This is going to happen regardless of whether the United States wants to participate or not.
Second, it is estimated that approximately half of the Forbes 400 list will come from this industry when bitcoin hits somewhere between $175,000 and $200,000. That is an incredible amount of global wealth that is concentrated in a single industry. Those people, just like the disruptive industries before them, will eventually become larger players in the political arena — they won’t be able to avoid it. The policies and decisions that are made in Washington DC will have an effect on their businesses, their wealth, and their freedom.
Lastly, there is an entire generation of citizens that have grown up with a disdain for the incumbent system. They watched the horrific events of 9/11 get leveraged into two forever wars in the Middle East, while simultaneously expanding the surveillance capabilities of the nation state. Shortly thereafter, the same generation watched as their parents and loved ones were decimated by the global financial crisis. The government bailed out corporations and large financial institutions, but left the average citizen out to dry.
This millennial generation has record low levels of trust in the mainstream media and in the government, but rather than simply complain about these challenges (as previous generations have done), the young people have gone out and built a better system. The media’s power has been significantly weakened by the advent of social media platforms, podcasts, and technology companies like Substack. The legacy financial institutions are on the brink of losing significant power with the advent of bitcoin, stablecoins, and decentralized financial applications.
This is the difference between the generations. This is the difference between the political class and the technology industry. One is focused on building. On action. The other is focused on advocating and complaining. There are politicians who have spent their entire careers complaining about the financial system, yet in less than a decade the technologists were able to simply build a better one.
That framework is important to understand because it is ultimately playing out in nearly every facet of our lives. The doers are making progress at a faster rate than the talkers. When this occurs, the talkers have no tools in their toolbox to compete. They simply attempt to use their words to complain about what the new class of doers have chosen to pursue.
Now this brings me back to the political arena. The folks in Washington DC are being woken up abruptly to this new class of doers. As an example, FTX founder Sam Bankman-Fried was one of the top two donors to Joe Biden’s Presidential campaign last year. Another example is that the relatively unknown and outsider industry has been able to effectively stop all progress on a $500+ billion infrastructure bill as the nation’s elected leaders debate the specific words used in less than 3 or 4 paragraphs.
This type of activity and results led me to tweet the following yesterday:
Before long, someone tagged Twitter and Square CEO Jack Dorsey with the insinuation that maybe one day he would run for President. While most people already would have thought that to be unlikely, Jack’s response was perfect:
This got me thinking. Not only is Jack correct, but the initial framing of the conversation completely missed the mark. Bitcoin doesn’t need anything. It simply is what it is. But maybe the rest of the world needs bitcoin? My response to Jack was an attempt to put clarity around this idea:
Read that again — Bitcoin doesn’t need Presidents, but Presidents need Bitcoin.
As I’ve thought about this framing more and had the opportunity to sleep on it, I feel that it really codifies an important idea. The legacy system is headed in the wrong direction. It may be able to survive for a few more decades, but it won’t last forever. At some point, the incumbent players will need bitcoin more than bitcoin needs the incumbents. Many, myself included, would argue that we are already at this point. But even if you disagree on the current situation, it would be hard to argue that we aren’t headed in that direction in the future.
With that said, my thought related to a bitcoiner becoming President does not necessarily mean that a pseudonymous account with laser eyes on Twitter will successfully run for the highest office in the land. It is more likely that a sitting President, or an existing politician that will eventually run and win, becomes a bitcoiner. I don’t think the current administration is going to be the group that picks up the flag and runs with it.
But I do think that someone like Miami mayor Francis Suarez could be a great example. He is an existing politician who understands how to navigate the often confusing and complex landscape of democratic rule. He has an important and unique view on the importance of technology and freedom, including how those two things can reinforce each other. And Suarez has shown the propensity for action by openly and publicly talking about bitcoin, building Miami into the bitcoin city, and finding ways to embrace the technology to build a better world for his citizens.
Francis Suarez may or may not run for President one day. He is just one example. You could also look at other Bitcoin proponents in political office such as Senator Lummis or Congressman Davidson. Maybe they run for President. Maybe not. But someone, at some point, will run for President of the United States and embrace bitcoin. The industry is growing too fast and the adoption is proving to drive such a pervasive uptake in populations that it feels inevitable.
The crazy thing about this scenario is not that the sitting President of the United States will be a bitcoiner. That would imply that the man or woman in that position would be a savior or leader of the bitcoin movement. Instead, it is more likely that the President of the United States will be in a position where it is essential for the country to embrace the technology. The President will need bitcoin more than bitcoin needs the President.
Now before you roll your eyes and think I’m crazy, there is precedent for this already. The President of El Salvador is a bitcoiner. He has laser eyes on Twitter, has introduced legislation to make the digital currency legal tender in his country, and is working to bring bitcoin mining and other activities to his people. There are many other politicians, both in the United States and abroad, who are self-identifying bitcoiners (laser eyes and everything!). And of course, there are sitting Senators and Congressmen in the United States who have invested material portions of their net worth in the asset.
As an investor, I always try to think about the macro trends and where the world is going. It feels like this past week was an inflection point in the adoption and awareness of bitcoin. There were Senators openly advocating and explaining what bitcoiners have spent years stating on various social media platforms:
We still have a lot of work to do, but this feels like an important milestone. Washington DC has finally come to realize how important this technology is, how engaged the community is, and many of the current politicians are coming to terms with the idea that history will be unkind to those that oppose technological progress.
As you all know, I hate politics. I’ve written more about politics in the last two weeks, than every other time combined since I started this letter in 2018. I’m looking forward to getting past this debacle and getting back to what I enjoy — analyzing the progress of the digital currency, the economic and social ramifications, and the promise of ushering in a better life for billions of people globally.
That brings me to my final point — don’t overlook the fact that bitcoin’s price has been appreciating rapidly over the last few days, while the politicians debated words on a piece of paper. True bitcoiners know that the words don’t mean anything. There is a decentralized system that no one controls. The United States can choose to be friend or foe, but it won’t ultimately matter. The bitcoin network will continue producing block after block after block of transactions. That is exactly how it should be.
Hope each of you has a great start to your week. Talk to everyone tomorrow.
BONUS: We are running our 6th cohort for the Bitcoin and Crypto Training Course starting Tuesday August 10th. Graduates have already been hired at Coinbase, BlockFi, Gemini, Kraken, and many other great companies. Want to increase chances of being hired? Apply here:
2 Senators Propose Exemptions to Crypto Tax Reporting Required by US Infrastructure Bill: U.S. Senators Mark Warner (D-Va.) and Kyrsten Sinema (D-Ariz.) on Saturday updated their amendment modifying a crypto tax reporting provision in the Senate’s landmark infrastructure bill. The original amendment, introduced late Thursday, would exclude cryptocurrency miners who are involved in validating transactions on distributed ledgers and companies that are selling private key hardware or software wallets. Read more.
Washington Wakes Up to Crypto Influence Amid Infrastructure Fight: An intense infrastructure bill brawl between Bitcoin advocates, Congress and the White House has revealed a new power player in Washington that’s starting to find its footing: the cryptocurrency lobby. The industry was first caught off guard when lawmakers and the Biden administration targeted it with new tax rules tucked into the bipartisan Senate infrastructure bill announced last month. But it fought back with a vengeance, showing that startup digital trading platforms and other firms could rally a small army of recently requisitioned trade associations, lobbyists and public relations experts to put up a real defense. Read more.
Bitcoin ATMs coming to gas station, retail chain Circle K: Buying cryptocurrency will be as easy as fueling up and grabbing snacks after a new deal to install bitcoin ATMs in a nationwide convenience store and gas station chain. New Yorkers will soon be able to fill up the gas tank and buy cryptocurrency after gas station chain Circle K announced a deal to install bitcoin ATMs. Read more.
The Sacking of a Crypto Mecca (longread): The creator of America's crypto mecca: Ian Freeman saw cryptocurrency as a kind of moral crusade against the belligerence of the US government. He is best known as the host of Free Talk Live, a libertarian talk radio show syndicated to 185 radio stations across the country. His show became a gathering point for the early Bitcoin community, turning the small town of Keene, N.H, into a crypto mecca. In March, federal law enforcement raided the crypto oasis, tearing it down and arresting six people. The story is much more complicated than it seems. Read more.
Anthony Pompliano breaks down the most recent analysis of the infrastructure bill, including the importance of bitcoin, the political class’ awareness of the new industry, and where we go from here..
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