The U.S. Securities and Exchange Commission (SEC) recently approved about a dozen Bitcoin exchange-traded funds (ETFs), opening the floodgates for traditional investors to gain exposure through their brokerage accounts. Establishment conservatives, always enamored by financial speculation as a facsimile of prosperity, are predictably excited. “For the Americans most affected by inflation, those already struggling to make ends meet, it offers a crucial way to protect their savings and preserve their self-sufficiency,” explained FREOPP, the organization founded by the leading “Freedom Conservative” Avik Roy. Enthusiasm for Bitcoin among the “America First” crowd is harder to understand. How, exactly, is Bitcoin “America First”?
Bitcoin is a software that enables an alternative method for payment processing that circumvents traditional financial institutions. Some advocates suggest that individual payment units, called bitcoins, preserve value against inflation; more often, investors speculate on bitcoin values through online exchange marketplaces. Bitcoin supporters allege that its alternative attributes offer opportunities to innovate and grow the economy.
The America First philosophy is defined by respect for the United States as an independent nation with its own unique interests, which policymakers must advance with particular emphasis on the concerns and priorities of ordinary American workers and families. Generally speaking, this orientation recommends opposition to globalization, deindustrialization, and financialization. Bitcoin fails on each point. It is a globalized system with its key operations and operators distributed around the world—often deliberately in foreign jurisdictions to avoid American accountability. Bitcoin doesn’t manufacture anything, provide any service, improve anyone’s productivity—to the contrary, it siphons energy and labor away from the more productive sectors of the economy that need revitalizing. And its alleged value? The same old Wall Street sleight of hand that tries to count financial transactions as useful in and of themselves, regardless of whether they foster investment in the real economy.
Claims about Bitcoin’s ability to stimulate economic growth and innovation are invariably empty platitudes. The typical economic activity Bitcoin promotes is day-trading: pushing digital paper around in a zero-sum game. With the new institutional support provided by ETFs, expect money to flow from businesses that employ people and produce goods and services into a sterile asset that promises a big payday for little work, with jobs created only for the bettors and bookmakers in the new casino. The stated premise is that investment in Bitcoin is for the sake of Bitcoin, nothing more. Therefore, its value can only be determined by arbitrary fluctuations in its price.
Real dollars are parted with to buy Bitcoin largely to line the pockets of those on the top of what can only be called a pyramid scheme. The top 1 percent of Bitcoin investors hold 90 percent of the supply of Bitcoin. For perspective, the top 1 percent of Americans own 30–40 percent of the nation’s household wealth. The Bitcoin elite siphon dollars away from unsuspecting Americans through strategic market manipulation.
The most recent case study of Bitcoin’s contribution to American society was Sam Bankman-Fried’s FTX scandal. He operated his company in the Bahamas, outside the jurisdiction of U.S. law, where he manipulated and stole from his American (and global) customers while becoming the second biggest individual donor to the Democratic Party.
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In that case, the economic growth Bitcoin stimulated was the growth of Bankman-Fried’s wallet and the war chest of the Democratic Party. The innovation it encouraged was in how best to fleece the American public.
Leaders espousing an America First philosophy should be scrutinizing Bitcoin, not cheerleading for it. Yet presidential candidates like Ron DeSantis and Vivek Ramaswamy came out in support of Bitcoin, while Senator Ted Cruz has highlighted how he “champions” it. Former Congressman David McIntosh, who is also the President of the Club for Growth and co-founder of the Federalist Society, leads the Blockchain Innovation Project, which advocates pro-Bitcoin policy. He has said, “The technology itself has tremendous potential for economic growth and innovation.” The former GOP Speaker of the House Kevin McCarthy said, “I like bitcoin.”
In unique contrast, consider the perspective of President Donald Trump, whose record on America First considerably outpaces the typical Republican politician’s: “Bitcoin, it just seems like a scam.” The American people shouldn’t let themselves be scammed into thinking that Bitcoin or its boosters are putting them and their interests first.