Peter A. McKay



Crypto's leaders are going all-in for the GOP

Major Silicon Valley players like Musk and a16z are getting louder -- and more generous with donations -- to return Trump to the White House.
File photo of venture capitalist Ben Horowitz

File photo of venture capitalist Ben Horowitz courtesy of TechCrunch via Unsplash

Below is the latest edition of #w3w, my free newsletter about decentralization. If you would like to receive it in your inbox every Sunday, please subscribe here.

The U.S. crypto community's political awakening has been a curious thing to observe over the last year or so. My assessment back in February:

The crypto industry is collectively pretty angry right now at Washington's recent regulatory crackdown based mostly on decades-old laws written for the stock market. Meanwhile, Congress has been too paralyzed to write updated laws that many insiders would actually welcome for the sake of clarity. And these folks' pocketbooks are flush right now thanks to a roaring rally in token prices to start 2024.

That could be just the formula for a new use case for digital money to emerge this year -- political payback.

Several high-profile announcements last week loudly confirmed exactly that scenario underway. In particular, many tech CEOs are now donating millions to Donald Trump, who has explicitly positioned himself as a pro-crypto candidate in the current presidential race.

(It also helps that the token rally continued at a torrid pace last week. So, yes, a lot of would-be political donors in crypto are still flush.)

Notably, there has been a lot of flip-flopping at the presidential level regarding crypto recently.

Before announcing his intentions to become the first "crypto president," Trump was openly critical of digital currencies when he previously held America's highest office from 2017 to 2021.

The Biden campaign tried to repair its damaged relationship with the crypto industry earlier this summer, to little avail. But that became moot in more ways than one when Biden made the blockbuster announcement Sunday afternoon that he's dropping out of the race due to concerns about his age and health.

Still, the anti-crypto label may stick to the Democratic Pary as a whole for some time longer, given the presence in its ranks of vocal congressional opponents to the industry like Sen. Elizabeth Warren. The party's new nominee for president, whoever emerges, will also have to carve out their own position on crypto, whether its similar to the Biden administration's or (perhaps more likely) a more lenient stance.

Decrypt notes that one early frontrunner for the nomination, Vice President Kamala Harris, has never publicly commented on crypto issues. However, her earlier rise in local politics in California was generally considered a favorable development for that state's giant tech industry.

Week in Review: July 14-20, 2024

Like many Americans, I have strong feelings of my own about all of the above. But I'll save those to share another day perhaps.

For now, let it suffice there is just a lot of news to cover. So let's get to those facts first:

  • In a lenghty new podcast episode, the founders of venture giant Andreessen Horowitz detailed why they're supporting Trump in '24 and how that fits into their startup-focused "Little Tech" agenda. Early in the podcast, firm co-founder Ben Horowitz acknowledges that his choice of candidates might upset many of his friends and even his mother.
  • Elon Musk pledged around $45 million a month to America PAC, a new super political-action committee backing the Trump campaign. Other donors include Palantir Technologies co-founder Joe Lonsdale, early bitcoin investors Tyler and Cameron Winklevoss, former U.S. Ambassador to Canada Kelly Craft, and her husband, Joe Craft, who is chief executive of coal producer Alliance Resource Partners. (Wall Street Journal)
  • Trump is set to speak Saturday in Nashville at the Bitcoin 2024 conference, a major industry gathering. He will also host a private fundraiser where a single seat will cost $844,000.
  • The curious case of J.D. Vance: Forbes notes that Trump's vice presidential running mate has a six-figure personal stash of bitcoin, according to financial disclosure statements. On a more worrisome note for some in Silicon Valley, however: Vance, a former VC employee himself, favors breaking up Google and has praised Lina Khan, a Biden-appointed regulator who has aggressively pursued antitrust cases.
  • Coinbase CEO Brian Armstrong, a vocal critic of the Securities and Exchange Commission's enforcement campaign against crypto, met with House Democrats on Wednesday to discuss regulatory issues, according to CoinDesk. Reuters reported in June that Armstrong doesn't plan to ensorse a presidential candidate, preferring to push for bipartisan crypto legislation instead. But he is donating lavishly to pro-crypto PACs like Fairshake and Stand with Crypto.
  • As of late June, Fairshake had already contributed over $100 million to candidates in 35 House and Senate primaries. Its preferred candidates won 33 of those races. (CNBC)
  • Ethereum co-founder Vitalik Buterin took to his personal blog to warn against the increasing politicization of crypto and the temptation for people in the industry to become single-issue voters based strictly on candidates' policies around regulating token markets.
  • Despite the Republican support among some high-profile CEOs, the rank and file of Silicon Valley still leans heavily toward Democrats. A recent poll by the tech-industry news site The Information, taken before Biden dropped out, found that respondents favored Biden over Trump by a margin of 59% to 27%.
  • Decrypt found time to have a bit of fun with some non-presidential news as well this week. Their headline on a story about the criminal trial of a Demoratic legislator from New Jersey: "Bitcoin Critic Senator Menendez Convicted of Taking Bribes in Gold"

Odds & Ends

  • The romcom When Harry Met Sally just celebrated its 35th anniversary. Salon's critic Melanie McFarland reflects on questions the classic film poses for modern viewers in an era when dating apps and other technology have transformed people's offline relationships radically.
  • Breakdancing will make its debut as an Olympic sport when the Paris games open July 26. One competitor to watch: Afghanistan's Manizha Talash, whose family fled to Pakistan and then Spain because the repressive Taliban government, which forbids all dancing, was searching for her breaking crew. In Paris, she will compete for the multinational Refugee Olympic Team, composed of displaced athletes. (Washington Post)

That's it for now. Thanks for reading the newsletter today! Again, if you want to receive #w3w in your inbox every Sunday, subscribe here.

Best wishes for a healthy and productive week ahead.