Crypto Cabal
Fifteen years after Bitcoin’s creation, it still remains primarily a tool for financial speculation and organized crime, with few legitimate use cases. The broader cryptocurrency industry has weathered numerous scandals, including the collapse of FTX and criminal charges against Binance. The crypto currency is yet another tool for the wealthy to bet on hypotheticals with their play money, create non-existent threats, hype the need for its existence, speculate, and eventually make more money. Yet, crypto lobbyists wield significant power, mainly due to their substantial financial resources. I have always remained a skeptic and will continue to remain a skeptic of the crypto world until I can see legitimate use cases for the same that affect all people-not just the rich.
Money Talks
The crypto industry’s primary Super PAC, Fairshake, has amassed over $202 million so far, for the 2024 election cycle, largely from 8-figure contributions from individual donors. Coinbase alone has donated $70 million, while investors like Ben Horowitz, Marc Andreessen, and the Winklevoss twins (remember them?) have written multi-million dollar checks. Here is the open secret. These largest individual donors from the crypto industry are specifically supporting Donald Trump’s candidacy.
Of the $45 million Fairshake and its subsidiaries have spent so far, two-thirds have been used to attack Democrats or support Republicans. This financial clout positions the crypto industry to be one of the most influential forces in politics over the next 90 days.
Political Maneuvering and Bitcoin Reserves
The strategy seems to be yielding results. Speaking at the Bitcoin Conference in Nashville, Senator Cynthia Lummis (R-WY) proposed that the federal government create a “strategic Bitcoin reserve.” Her legislation would mandate the purchase of 1 million Bitcoin — about 5% of the total available — for $68 billion. Lummis claims this could solve America’s financial issues, likening it to a new “Louisiana Purchase” moment.
However, for Bitcoin to halve the current $34 trillion federal debt by 2045, its price would need to skyrocket to $17 million per Bitcoin from the current value of $65,000. Journalist Jacob Silverman points out that Lummis’ views align with hardcore Bitcoin bulls like Michael Saylor, who predicts Bitcoin will reach $13 million by 2045.
Despite Lummis labeling her proposal as “strategic,” the truth is that holding Bitcoin offers no tangible strategic value to the federal government. Unlike oil, the government can do little with Bitcoin other than speculate. However, purchasing a significant portion of Bitcoin could drive its price up, benefiting potential donors and even Lummis herself, who owns between $100,000 and $250,000 in Bitcoin.
The below meme pretty much sums up what the crypto industry wants.
Trump’s Crypto U-Turn
The day after Lummis’ Bitcoin/Crypto convention speech in Nashville, Trump addressed the same audience, promising to create a national “strategic Bitcoin stockpile.”
This represents a dramatic shift from his previous stance, where he denounced crypto as a “scam”. Imagine Trump calling something a scam. His new promises include ending the federal sale of seized cryptocurrency, which often depresses market prices, and positioning the U.S. as the “crypto capital of the planet.”
Trump’s flip-flop on crypto can partly be explained by his campaign’s financial incentives. And anyone who has studied this fraudulent convicted felon for over 9 years knows that he understands the crypto world only enough to smell where there is money to be made, grift, and profit from. He reminded the audience that he is the first major party nominee to accept donations in Bitcoin and crypto. At a subsequent fundraiser held on Saturday following the convention, tickets for crypto enthusiasts went for as much as $844,600.
There is so much money in the crypto world that Democratic strategists realize that it is not very prudent of the Democrats to let it all go one way. Vice President Kamala Harris’s team has reportedly sought to improve the Democratic Party’s relationship with the crypto industry. Her advisors have approached top crypto companies like Coinbase and Ripple to “reset” relations. According to Harris’ team, this outreach is more about building a constructive relationship and setting a smart regulatory framework than attracting electoral contributions. It may be too early to speculate what a future Harris administration would like and how it would balance the agenda of the Congress when it comes to the crypto industry. But this could still be a fruitful short term exercise in order to stop the overflow of contributions to GOP, which, if Harris’s team can achieve, is a win for the Democrats.
The Shift and the Dangerous Grip of Tech Brobillionaires in Modern Politics
It’s not just the crypto industry that is aligning itself with Trump hoping to ride on him as its useful idiot, but Silicon Valley’s tech billionaires are also showing a newfound affinity for Trump. This increasing involvement of tech billionaires in politics has to be cautiously noted closely with a huge red flag.
Eight years ago, Peter Thiel, co-founder of PayPal and Palantir, stood out in Silicon Valley for publicly supporting Donald Trump. I have already written about the dangers posed by Peter Thiel in a different context. So, to me it’s not surprising that Thiel is back at the game that he is very good at, quietly setting different balls in motion, in time for the 2024 elections. But what is worrisome is, today, a number of other male tech moguls who once opposed Trump have reversed their stance, Mark Zuckerberg included.
These tech bro billionaires aka “broligarchs” are now endorsing and donating to the Republican candidate, revealing their priorities and the growing influence of tech billionaires on politics.
Elon Musk, who once lined up for six hours to shake Barack Obama’s hand, has shifted his support openly to Trump, planning to donate $45 million monthly to a Trump-supporting super PAC. Musk may have denied making the $45 million a month offer to Trump, but he has doubled down his support for Trump in recent days, despite the former president’s efforts to overturn the 2020 election and his criticism of electric vehicles.
Musk, who backed Joe Biden in 2020, has become sharply critical of Democrats on various issues — and many of them unrelated to business policies. And as a regular user of Twitter (never calling it X), I can vouch for the games Musk is playing on his platform to spread misinformation, to amplify hatred and far right voices, censure voices that question authoritarianism/GOP/Trump, etc.
Earlier today, Politico reported that the British parliament wants to question Musk for his role in abetting and amplifying hatred that led to the recent race riots in England, and beefing up hatred through his own vitriolic comments.
In addition, America PAC, a political action committee funded by Musk, has been accused of wrongfully collecting voter data in selected swing states. Both the states of Michigan and North Carolina have already begun their investigation of the PAC for potential election law violations.
Similarly, venture capitalist Marc Andreessen, who previously criticized Trump’s anti-immigration policies, recently endorsed Trump on his podcast, arguing that the Republican nominee’s policies are better for tech start-ups. Another prominent venture capitalist, David Sacks, who supported Hillary Clinton in 2016 and condemned Trump after the January 6 riot, hosted a fundraiser for Trump in June. Sacks circulated a list of Silicon Valley luminaries supporting the ex-president and urged others to join, asserting that Trump would be better for the economy, foreign policy, and border security.
The Motives Behind the Support
One could say that the supposed consistent lead of Trump in the polls (before Biden dropped out) might explain the broligarchs’ change of heart to bet all in on fascism, as many business leaders tend to cozy up to politicians who seem likely to win.
However, there is another motivation. A more tangible motivation and one that seems very clear: A desire for power without accountability. Just like the candidate they support.
Trump promises massive tax cuts and looser regulations, which benefit the broligarchs’ finances. But such policies benefit all billionaires. Not just tech billionaires. Why are these tech brobillionaires particularly different? Because tech is the “most dominant, least regulated” industry where massive wealth has been produced and because what happens in the industry is deeply relevant and influential for countless others.
For its size, the industry has been getting a free ride for the last few decades with very few hindrances. Only the European Union has awakened to the complexities of the tech industry and the implications of a such an industry staying unregulated. So they have started off at the other extreme. But in the USA, it is only in recent times, especially only during the Biden administration, that we have started seeing stricter enforcement of antitrust laws, crackdown on cryptocurrency scams, and sincere efforts to catch rich tax cheats, etc. These steps surely have made the tech brobillionaire community a bit jittery as they sense their license for free ride through the jungle will now be checked by the regulatory rangers.
Speaking of antitrust law enforcements under current administration, the Department of Justice recently won a huge antitrust law violation case against Google.
The irony is that while the so called tech libertarians were happy for Biden to bail out their failing finances — his administration saved Silicon Valley Bank by lifting the limit on federal insurance for deposits — they are not keen on government constraints when it affects their ability to amass wealth. As simple as that.
The Mindset
Many research show that these multimillionaire and billionaire clients view themselves as above nationality and laws. I have read that some ultra rich people sincerely believe they are destined to inherit the earth.
This mindset is reflected in a book Thiel lists among his favorites, “The Sovereign Individual.” The text likens the ultrarich to “the gods in Greek myth,” suggesting they deserve world domination.
Thiel has famously argued that freedom and democracy are incompatible.
To many billionaires’ dismay, democratic governance involves taxation, regulation, and scrutiny by the free press. The same system that facilitated their prosperity through the rule of law also constrains them. But hell hath no fury like a tech broligarch who doesn’t get his way.
The Entitled Elite
That’s how some of the rich fundamentally differ from the average person. Silicon Valley CEOs, in particular, view any democratic constraint on themselves as illegitimate. They are like that pampered single child who suddenly has been asked to be act more responsibly. Rather than participate in the compromise inherent in democratic societies, they boast, “Don’t you know who I am?”.
Their sense of entitlement cannot be overstated.
For example, Musk allegedly soured on Biden when he wasn’t invited to a 2021 White House summit on electric vehicles. Musk publicly bemoaned the “cold shoulder” he received. One potential reason for the apparent snub by Biden’s team was that the United Auto Workers union was also at the ceremony. The UAW represents workers at GM, Ford and Stellantis, but has been battling, so far unsuccessfully, to organize Tesla workers at the EV maker’s plants. Tesla and Musk continue to take forceful anti-union positions. And with Biden being embraced as the most pro-union president by the union officials and scholars since FDR, it was not surprising that Musk was not invited.
Musk’s friend Jeff Skoll, former eBay executive, went so far as to accuse Biden of “persecuting our entrepreneurs.” Other billionaires have made even more absurd claims of victimhood, such as venture capitalist Tom Perkins, who likened media criticism of the Silicon Valley elite to Kristallnacht, the Nazi pogrom against Germany’s Jewish population in 1938.
Selective Support for Laws
For all their rejection of taxation, regulation, and press scrutiny, these tech billionaire broligarchs are not anarchists. They support laws protecting their property rights and enforcing their contracts. They use public goods such as potable water, well-maintained roads, and police protection. They just refuse to be subject to the law or acknowledge their dependence on a functional democracy for their prosperity.
To counter Musk, Sacks, and other pro-Trump Silicon Valley figures, more than 100 venture capitalists including Mark Cuban, announced their support for Vice President Kamala Harris’s bid for the White House. However, even tech broligarchs who support Democrats seem to bristle at public oversight of the tech industry. Reid Hoffman, LinkedIn co-founder and major Biden donor, has urged Harris to dump Lina Khan, the Federal Trade Commission chair pushing for more aggressive antitrust enforcement on tech companies. Basically, tech plutocrats of all stripes and colors try to bend the political system to their wishes.
Undemocratic Convictions and Long-Term Risks
Among these broligarchs’ defining traits is an undemocratic conviction that their ideas should prevail regardless of the preferences of their fellow citizens. “Competition is for losers,” declared Thiel in a 2014 op-ed, a sentiment extending to the competition of ideas and policies on which democracy depends.
To many, the politics of the new pro-Trump billionaire broligarchs might seem shortsighted. They do not rely on public schools, Medicare, Social Security, or other shared initiatives. If these institutions — created and maintained through representative democracy — disappeared tomorrow, the billionaires would be fine in the short term. In fact, they would be better off, as they could keep for themselves the share of their wealth they now pay via taxes.
If the nation becomes a crumbling ruin, with deteriorating health and education levels, or falling infrastructure, the tech billionaire broligarchs can adapt to local anarchy like how the ultrarich do in Brazil and Mexico. They use helicopters to commute or ferry their children to school, avoiding crime-ridden streets. In the long term, when their adaptations fail, they can retreat to luxury underground bunkers or even outer space. And who knows, space-travel projects might someday allow Musk and other broligarchs to escape this planet entirely, leaving the rest of us to nurture the democracies that brought them prosperity.
The influence of crypto enthusiasts and tech billionaires in politics is growing, driven by a desire for power without accountability. These broligarchs seek to shape a regulatory environment that favors their interests, often at the expense of broader societal well-being. These individuals seek to control everything, disregarding the well-being of the average American. It is crucial to recognize the real dangers posed by toxic tech billionaires and the broligarchy they are creating.
As the election approaches, we still have the power to scrutinize the motivations and implications of broligarchy, and be aware of the dire future ahead of us should these tech billionaires’ grip on our political landscape tighten.
