Reminder: Crypto Is a Trump Trade
The industry bought a president. Bad investment?
Abandon all hope, ye who enter here
Tired and jet-lagged, so still not ready to do a serious post. But just a note about the interrelationship between markets and politics.
Obviously politics is dominating the news. I have no deep insights, except to echo Josh Marshall: Power is unitary. Trump seems to be collapsing on multiple fronts, with the collapse on each front reinforcing the collapse on others. The Epstein affair is coming to a head even as the public loses all faith in his economic policy, and the whole structure of fear on which his regime rests appears to be evaporating.
He also seems to be unraveling personally. We always knew that President “Piggy” despised women and admired tyrants, seeing nothing wrong with hacking up your critics with a bone saw. But even a few months ago I think he would have been self-controlled enough to be less obvious about it.
I don’t know how this ends, but all of a sudden a rapid implosion looks possible. No, I don’t know what that looks like. But the U.S. political universe looks very different than it did a few weeks ago.
Meanwhile, stuff is happening in the markets. Most dramatically, crypto is crashing:
I’ll probably be ready to write something substantive on this subject soon, but today just a reminder that crypto and the political crisis aren’t independent.
As I wrote last month, crypto has become a Trump trade. An industry that’s still having very little success in finding legal use cases for its products basically bought itself a president. For a while that looked like a great investment. But with Trump’s power evaporating, it’s starting to look like money down the drain. And I believe that the crypto crash in part reflects a realization that the political patronage the industry was relying on may not continue.
OK, that’s about all I can manage right now. Now back to possible-deliverance-from-doom scrolling.
NONMUSICAL CODA
I talked with Hasan Minhaj, a big YouTuber; more bits later. Here’s a short about crypto:
Even more than the patronage the industry bought not continuing, by explicitly tying itself to Trump the crypto industry may well have given Democrats a reason to actively oppose it and regulate (or outright ban) the industry once in power.
I have to think that all the stunts that Big Tech, the AI industry, etc. have pulled to become explicit collaborators with Trump may leave them vulnerable to the next Dem administration as soon as 2029. If you're a Democrat, well, why should SpaceX have federal contracts any more if those federal contracts are going to end up funding the enemy?
Maybe Crypto and Trump are the same thing. Two tulips wilting before winter sets in. Let's hope his cratered poll numbers and the Epstein stink bomb will finally embolden the GOP to act like representatives of the People and not servants of Trump.