Trump was a crypto naysayer — until he wasn’t.
Trump was a crypto naysayer — until he wasn’t.
This is the second in a series of columns on President Trump’s cryptocurrency venture. Here is Part One.
T o this day, four months after inauguration, World Liberty Financial, a purportedly private enterprise, unabashedly touts as its central asset the president of the United States, whose bigger-than-life visage peers from its website, touting a “financial revolution” that will “dismantle the stranglehold of traditional financial institutions.”
Leveraging business with power was the plan. It was, after all, just two months before the 2024 election when Donald Trump, his sons Don Jr. and Eric, and a handful of partners stood up WLF, their crypto enterprise. At the time, the presidency was tantalizingly close to Trump’s grasp. So was the potential to reap billions of dollars. It is no accident that the longtime New York real estate tycoon, now worth over $5.4 billion according to Forbes, has doubled his fortune by plunging into crypto and his other tenuous cyber venture, the Trump Media and Technology Group.
Hence the problem: Chief executive of the nation and chief advocate for a family-run crypto concern are different jobs with inevitably conflicting priorities. The American presidency is not a golf course in Scotland. It’s not just another asset on the corporate ledger.
Becoming the ‘Crypto President’
In some ways, the elder Trump’s path to becoming the “crypto president” is unlikely. As the New York Times detailed in the blockbuster April 29 report we discussed in the first column in this series, Trump was a crypto naysayer until a strange concatenation of circumstances brought him around. Trump is a real estate guy. He’s never been a big stock fan, either. His instinct is that value lies in what he can touch and readily leverage. Until about a year ago, his take on cryptocurrency echoed many traditional conservative economists: a “scam” — the illusion of value with no tangible there there, mainly fit to “facilitate unlawful behavior, including the drug trade[.]”
What changed his mind so drastically? Two of his core attributes.
First, tirelessly projecting mirages of unquantifiable wealth and success is his core competency. As we’ll see, convincing potential investors that cryptocurrency is a value proposition is the essence of its being one — to the debatable extent that it is one.
Second, vengeance is Trump’s brand, particularly in politics. Trump’s enemies, especially the progressives who ran the Biden administration, were near rabid in their determination to regulate crypto. As night follows day, Trump is now crypto’s biggest cheerleader, bent on nullifying Biden’s crusade.
As we discussed in the first column, regulating crypto is not as easy as it sounds. The partisan divide in Congress is too deep for consensus on regulatory frameworks for digital currencies and the trading of digital assets. Consequently, it has been left to executive agencies to try to corral crypto into the antiquated legal regimens for securities and commodities — regulatory schemes created decades before the technology that created crypto existed. To make this work, the executive branch has regulated by prosecution (much as it did in stepping up the policing of securities fraud in the 1980s). That was the Biden approach.
This, needless to say, is a horrible way to legislate. It is a bedrock principle that laws imposing liability, especially penal provisions, must be sufficiently clear that a person of average intelligence can understand what is prohibited. In regulation by prosecution, to the contrary, the law is stretched by creative DOJ prosecutors and agency bureaucrats. These novel theories are then legitimized by progressive and populist judges and administrators, who are likeminded about the imperative to manage markets and business — even if the proposed standards for doing so are neither strictly prescribed by the text of regulations nor established by prior government enforcement practices.
In Trump’s mind, that is exactly what was done to him in the lawfare campaign by the Biden Justice Department and other Democratic prosecutors, such as Alvin Bragg and Letitia James in New York. He is convinced that Democrats stretched statutes to the breaking point — and beyond — to try to convict him, ruin him financially, and end his political career.
He’s only partially right about that (but he did win, so his minions at the Justice Department are busy rewriting the history). The New York criminal and civil cases did indeed feature absurd distortions of enforcement statutes by elected progressive prosecutors with the goal of crushing their political nemesis. (Trump is currently showing James that what goes around comes around.) With respect to the federal cases, however, it would be more accurate to say that Trump was saved by the Supreme Court’s robust immunity ruling and the delay attendant to it, which meant the Biden DOJ prosecutor, Jack Smith, ran out of time before Trump was elected in November 2024. (Under the longstanding DOJ interpretation of the Constitution, a sitting president may not be prosecuted.) Smith did stretch statutes, too; but it can’t honestly be maintained that Trump’s appalling actions following the 2020 election — over which he was impeached, though not convicted — were unworthy of investigation; and if Smith’s “J6” case had played out, some of the charges might well have survived the Supreme Court’s immunity ruling. And Smith didn’t get the Mar-a-Lago documents case to trial mainly because he overcharged it (and because he and Biden Attorney General Merrick Garland were too headstrong to address an easily curable constitutional flaw in Smith’s appointment as special counsel), not because prosecutable misconduct was lacking.
Trump, of course, doesn’t see it that way. In his telling, he was totally vindicated because all the cases against him were partisan and bogus. This predisposition matters a lot in the crypto saga. For starters, Trump is convinced he has immunity for anything he does as president (which is not what the Court said). Just as important, because Trump sees the Biden enforcement approach to crypto and its proponents as indistinguishable from the Biden enforcement approach to Trump himself, the president’s vengeful streak has him portraying crypto as an unqualified good and its proponents as his allies, even if — or, perhaps, especially if — they’ve been prosecuted by the Biden-era enforcement agencies.
Of course, in bringing Trump around, it didn’t hurt that crypto’s entrepreneurs poured millions of dollars into Trump’s 2024 campaign.
Is Cryptocurrency Currency?
When it began operations a few weeks before the 2024 election, the asset that WLF rolled out was a new cryptocurrency: $WLF. Ironically, the dollar sign before initials or a catchy nickname is an industry convention, even though it is emblematic of the U.S. dollar — the reserve currency backing the quaint global financial order that the crypto bros dream of superseding.
What is a cryptocurrency? I’ll pause here to observe that it’s an unfortunate term.
First, what we’re talking about is not currency in the familiar sense (more on that in a second). Second, cryptocurrency must be distinguished from cryptology and the evolution of blockchain. These technological advances, as George Gilder compellingly writes, hold great promise for a decentralized world of smart contracts and autonomy over one’s personal data. Cryptocurrency is a closely related development. It is opaque, has an insider vernacular, and is often linked to illicit activities. Because of these things, and because people naturally recoil from what they don’t understand, there is a tendency to conflate the “currency” with the technology from which it sprang. They are not the same.
As for cryptocurrency, it is not like gold, a tangible, inherently useful — even desirable — metal. Gold is still an ideal we associate with currency, even though it ceased to anchor the dollar in 1971, because it is a reliable store of value and an efficient medium of exchange. Cryptocurrency is intangible. It’s an inchoate idea: a belief that its financial backers will prove to be solid and that its units will maintain and increase their value over time — that there will be a market for it, with someone willing to pay for it.
Belief is everything with crypto because it does not otherwise exemplify currency’s core attributes. A reliable store of value? That depends on how rigorous and enduring your notion of reliable is. Historically, though it has had periods of stability and growth, crypto has also nearly collapsed a number of times. As our intrepid friend and colleague David Bahnsen has quipped, the most established cryptocurrency, Bitcoin, “routinely trades with more volatility than a [dotcom] stock on margin in a third-world country during a terrorist attack.”
As for efficient medium of exchange, crypto simply isn’t one. That’s why it is nearly unseen in everyday transactions. In 2023, only 1 percent of Americans used cryptocurrency to pay for something. That’s not just because few merchants accept crypto due to its volatility, high transaction fees, long processing times, and fears about regulation and legality. It’s also because only 7 percent of Americans have even held cryptocurrency for investment purposes. For the foreseeable future, the vast majority of transactions will continue to be executed in traditional money, at least in the United States and other countries with established currencies backed by their governments and tax bases. (To be clear, that is not an endorsement of our government’s debasement of the dollar; it’s just an observation of reality.)
The Power of the Presidency
With all beliefs, there must be a reason to keep believing. Without one, the belief dies. I have a hard time perceiving any reason to believe in $WLF other than Donald Trump’s presidency. That’s bad because neither the presidency nor private industry is supposed to work that way.
The record bears this out. When $WLF was established, World Liberty Financial hopefully announced that it expected to raise $300 million in investment to back it as a desirable asset (if not a true currency). At the time, Trump was in a very tight race with Kamala Harris, and though she was a historically awful candidate, there was a very good chance he’d lose. By late October, even as his prospects improved, the New York Times reports that just $2.7 million had been raised for $WLF.
In the end, Trump won — not by the “millions and millions” of votes he habitually claims, but by a little over 2 million votes out of about 155 million cast, enough to nose out Harris by 1.5 percent (and a comfortable 312–226 Electoral College margin), even though his 49.8 percent haul meant slightly more Americans voted against than for him.
A win is a win: That plurality of the vote was enough to take 100 percent of the world’s most powerful office. And, mirabile dictu, immediately after the election, the value of $WLF surged. This week, after nearly four months during which the president continued prioritizing his “chief crypto advocate” aspiration, the capitalization of $WLF stood at $367 million, and the company claims to have reeled in a jaw-dropping $550 million through its offerings. As Rich Lowry and I discussed last week on our NR podcast, that’s significantly more than its optimistic backers had hoped for.
In the next column, we’ll look at other operations by which President Trump and his WLF partners have generated staggering amounts of revenue since he won the 2024 election.