It’s hard to read or listen to the news these days and not hear a reference to crypto. I was initially put off by the word’s association with things hidden, shadowy, or with a burial vault. As I heard neighbors and acquaintances discussing crypto, even considering investing in it, I grew more curious.
Does crypto have the potential to lift the economy to new heights? Or, like Wiley J. Coyote, the Looney Tunes cartoon character in perpetual pursuit of Road Runner, will the financial markets go off a cliff and not realize until too late that the only thing between them and the bottom of a yawning canyon is thin air? The history of capitalism is replete with Wiley J. Coyote moments.
Crypto took a giant step out of the shadows with the techno prodigy and financial wizard Samuel Bankman-Fried. An MIT graduate barely out of his twenties, he was styled by some as cryptocurrency’s “poster boy.” Bankman-Fried’s wild-haired, disheveled appearance evoked a young Einstein. If his explanations of crypto were sometimes, well, cryptic, he seemed a shrewd operator. To avoid the regulatory scrutiny that is part of U.S. financial markets, he set up shop in the Bahamas.
In 2022, Bankman-Fried’s Futures Exchange (FTX) financed an ad that ran during the Super Bowl. It starred Larry David, who had previously described crypto as a means of exchange best suited for Nazis and criminals. With its supersized audience of 112 million viewers, the Super Bowl allowed crypto to tap into the American love of underdogs beating the odds and confounding the establishment. Devoid of explanations or details, the ad hyped crypto as “the next big thing” and “FTX was a safe, easy way to get in.”
The subsequent collapse of FTX not only curbed David’s enthusiasm but left him the target of a class-action lawsuit that also involved celebrity backers like NFL quarterback Tom Brady. David issued a mea culpa, explaining that he hadn’t really understood what he was getting involved in.
The failure of FTX in 2022 turned out to be a minor setback in the rise of crypto. By the 2024 elections, support has become bipartisan. The recently elected Arizona senator Ruben Gallego, a Democrat, enjoyed the crypto industry’s generosity. During last year’s tight senate race, a super PAC financed by three large crypto companies provided $10 million in support of his candidacy.
The list of supporters keeps growing. Project Progress spent $10 million backing Democrat Elissa Slotkin in her race for a Michigan senate seat. Defend America gave $40 million to the campaign of car-dealership owner and crypto entrepreneur Bernie Moreno in his successful attempt to unseat Ohio’s senior senator Sherrod Brown, a crypto skeptic and critic.
Silicon Valley has spoken. Twitter founder Jack Dorsey, who sold his company for $44 billion to Elon Musk; Marc Andreessen, founder of Netscape and influential venture capitalist; Peter Thiel, founder of PayPal and patron of Vice President J. D. Vance—these powerful men are all true believers, vocal boosters, and investors.
In 2021, Thiel brought Vance along to Mar-a-Lago to apologize to Donald Trump for acerbic comments Vance had made about him (e.g., “I go back and forth between thinking Trump is a cynical asshole like Nixon…or that he’s America’s Hitler”).
The hatchet was interred. Trump endorsed Vance in his race for an Ohio senate seat. Urged on by Thiel and his son Donald Jr.—a crypto entrepreneur, investor, and cheerleader—Trump chose Vance as his 2024 vice-presidential running mate. Trump and Vance were quickly embraced by crypto supporters as the industry’s “dream ticket.”
A frontpage story in The New York Times (published online as “The ‘Trump Pump’: How Crypto Lobbying Won Over a President,” July 9, 2025) reported on a June 2024 meeting at Mar-a-Lago between Trump and a group of Bitcoin mining executives faced with challenges to the industry’s massive consumption of energy. They came away from the meeting with assurances that Trump would take good care of them if he was re-elected.
A Doubting Don, who once dismissed crypto as a “scam,” was now a fervent and foremost disciple of the crypto industry. Trump’s “authoritarian instincts clash with economic logic,” writes John Cassidy in The New Yorker. Logic has never been Trump’s forte. His tergiversations on things like tariffs seem more whimsical than logical. His penchant for flip flops was reflected in a post on Truth Social, his social-media platform, repeating a word-for-word message proposed by the executives: “We want all the remaining Bitcoin to be MADE IN THE USA!!! IT WILL HELP US BE ENERGY DOMINANT!!!” Trump was all in. He’d become the industry’s “salesman-in-chief,” said James Thurber, an American University professor emeritus and expert on political corruption.
If Trump’s involvement deepened his appreciation of crypto’s potential, his understanding of the industry’s inner workings remained thin. As so often with Trump, command of the facts was beside the point. Cashing in was what counted.
Trump’s track record as a business magnate can’t inspire confidence in his role as the Music Man of crypto’s big parade. The hope is that he’ll do better with crypto than with Trump University—for which he paid a $22 million fine (the judge, he explained, was Mexican, although he was born in Indiana)—or his other boondoggles: Trump Steaks, Trump Magazine, GoTrump.com, Trump the Game, Trump Vodka, and, of course, the casinos that he drove into the ground. (Trump is one of the few people in history to lose shirt, socks, and underwear operating a business where the house always wins.) Trump was rescued from failure not by daringly astute investments but by a so-called reality-TV show, The Apprentice, which fabulized him as a business visionary and fueled his ascent to the presidency.
Shortly before Trump launched his 2024 presidential campaign, his sons Eric and Don Jr. launched a cryptocurrency venture called Liberty World Financial. Initially valued at $2.7 million, it soared to over $2 billion post-election. Unidentified foreign investments, from corporations as well as individuals, poured in.
Once re-elected, Trump chose a pro-crypto venture capitalist to head the Securities and Exchange Commission (SEC). He issued an executive order promoting the potential of digital assets and directing his administration to be supportive of the industry. His administration has taken steps to establish both a Strategic Bitcoin Reserve and a U.S. Digital Asset Stockpile. He appointed a venture capitalist as “crypto czar.”
In May, Trump hosted a private dinner at his golf club in Northern Virginia for approximately two hundred top investors in his $TRUMP meme coin. Their names were not released. Reports indicate they paid an average of $1.5 million to secure a seat at the table. Trump’s press secretary claimed he was there in a personal capacity as an investor, not as president. The next day—whether as president or private investor is unclear—he escorted a group of dinner attendees on a tour of the White House.
Government watchdog groups cried that this was obviously an instance of a public official—in this case, the country’s chief executive—mixing personal profit with public office, with an eye to selling access and influence. In effect, the Trumps created their own mint. The line between presidential power and personal profit was obscured, if not erased. The Oval Office was being monetized. Even by Washington standards, The New York Times wrote, the melding of a president’s personal enrichment with tactics long familiar to the city’s lobbyists “is striking.” Forbes magazine estimates the president’s crypto ventures now account for “a majority of his fortune.”
The more criticism the president received for his grift, the less attention the public seemed to pay. In a sense, this is part of Trump’s genius. His chutzpah is overt, his involvement out in the open, celebrated rather than closeted. Today, there is no mention of Watergate-style hearings, no attempt to examine presidential conflicts of interest, no talk of a third impeachment. “Is it still a scandal,” asked Susan Glasser in The New Yorker, “if there is no possibility that the accused will face any meaningful consequences?”
Following the president’s lead, Congress designated the week of July 14 as “Crypto Week.” As a first piece of business, it took up the “Guiding and Establishing National Innovation for U.S. Stablecoin Act” (a tortured attempt to render the acronym GENIUS). The GENIUS Act, which Trump joked was named after him, established rules for a form of cryptocurrency known as stablecoin. Supporters on both sides of the aisle hailed it as the first successful attempt to regulate the crypto industry.
Sen. Elizabeth Warren, who led the opposition, thought otherwise. Warren claimed the GENIUS Act was more smokescreen than safeguard. It reminded her, she said, of the feeble efforts in the early 2000s to rein in the financial industry. Once again, the regulations were being dictated by the people they were intended to regulate. The seeds of another catastrophe were being sown. Warren was joined by Republican senator Josh Hawley. One of only two Republicans to vote against the bill, Hawley charged it was “a huge giveaway to Big Tech” that allowed companies to issue their own currency free of effective controls. President Trump signed the bill as soon as it reached his desk.
For its part, the House of Representatives passed the CLARITY Act, which clarified that the power of the SEC to police crypto was being taken away and handed to the Commodity Futures Trading Commission, a body far friendlier to the crypto industry. Veteran crypto reporter David Yaffe-Bellany saw the legislation as “furthering the slow creep of crypto into everyday life…. [T]he fact that crypto legislation is getting passed makes it way more likely that people and businesses are going to want to experiment with this stuff. And with many crypto skeptics thinking it could all come crashing down at any moment, that creates new dangers.”
Crypto Week had to be abruptly cut short, however, when, in a blatant attempt to shield Trump from any embarrassment, Speaker Mike Johnson shut down the House of Representatives “to avoid political games,” blocking any votes on the release of the Jeffrey Epstein files.
Writing in The Atlantic, Will Gottsegen summed up the convergence of private speculation and public policy: “As Trump’s second term has gone on, the distinctions between what’s pro-Trump and what’s pro-crypto have blurred together, approaching something like a singularity. In MAGA cosmetology crypto, Trump, and America now exist in perfect alignment—what’s good for one is good for the others.” Trump’s brazen use of his office to promote his investments in crypto, warns New York Times technology columnist Kevin Roose, could become part of the playbook for corrupt politicians who want to enrich themselves.
The chronicles of corruption and self-dealing around crypto call to mind The Chapters of Erie by the brothers Charles and Henry Adams, a classic saga of the struggle among corrupt politicians, unscrupulous speculators, and unregulated businesses to gain control over a railroad. In the process, the Adams brothers wrote, came a disrespect for “law, custom, decency, and every restraint known to society, without scruple.”
Former George W. Bush speechwriter and conservative columnist David Frum casts a cold eye on today’s digital opportunists and monopolists. His conclusion is as bleak as that of the Adams brothers: “Politicians are under the sway of crooks and con artists, whose idea of capitalism is unregulated permission to bilk and defraud.” Who can refute the cynical observers of the American political system, Frum asks, “when the government of the world’s largest capitalist democracy is in the hands of organized robbers?”
The primary challenge for crypto newcomers is figuring out exactly what crypto is. Larry David isn’t the only one unsure what he was getting involved in. What’s behind words like Bitcoin, Ethereum, crypto-mining, hashing, meme coins, stablecoins, blockchains, et al.? Is crypto a giant fraud or a giant opportunity? To those outside the industry, it can often seem the financial equivalent of dark matter—that ubiquitous but mysterious force that permeates the universe.
The originator of Bitcoin is known only by his pseudonym, Satoshi Nakamoto. His true identity has never been established. Bitcoin has no physical coins; it exists only on computers. Trades are anonymous. Coming to grips with crypto can be especially difficult for those raised (as I was) in the pre-digital era of piggy banks, passbook savings accounts, and checkbooks. For those trying to sort out for themselves the intricacies and possibilities of crypto, a good place to start is a 2022 New York Times article by Kevin Roose titled “The Latecomer’s Guide to Crypto.” Roose’s purpose isn’t to convince or discourage but to demystify the arcane terminology for newcomers and those still on the sidelines.
Out of caution or cowardice, I continue to keep my distance. I’m at an age where the craving for certainty outweighs the temptation of risk-taking. Wary of those frenzied gold rushes set off at Sutter’s Mill and repeated throughout American history, I’m swayed by my memories of the recent past. The first quarter of this century contained two major financial crises. The first, the dot-com implosion, was a classic Wiley J. Coyote moment. Investors were swayed by the hype of interactive media. The excitement was contagious. No matter that they showed no profits, anything with “dot com” at the end of its name was sought and bought on the basis of its anticipated future value. Fear of missing out (FOMO)—the motive at the heart of every financial bubble—was in full force. Investors piled in until it dawned on some that, as Gertrude Stein famously said of Oakland, “there was no there there.” The rush to get in turned into a stampede to get out.
My experience of the dot-com implosion was up-close and personal. I spent most of my career at TimeWarner. The merger in 2000 of TimeWarner and AOL was hailed as an epoch-making combination of digital and traditional media. Old rules didn’t apply. Employees were assured that the merger couldn’t fail. The combination of technology, demographics, and globalization would drive the company’s stock ever higher. The Kool-Aid was served in champagne flutes. The bitter hangover was worthless options and deflated stock.
The subprime-mortgage crisis struck in 2008, less than a decade after the dot-com bubble. Shortly before the crash, the economy basked in what was called “The Great Moderation.” Ben Bernacke, the Federal Reserve chairman, predicted “lower volatility…more stable employment…and a reduction in the extent of economic uncertainty confronting households and firms…closely associated with the fact that recessions have become less frequent and less severe.”
The debacle began with a group of brokers who figured out how to create a new financial instrument by bundling mortgages and hawking them to investors. More and more of the mortgages were subprime, also known as “junk mortgages.” One observer described it as taking a poisoned clam and making clam chowder out of it.
The subprime-mortgage crisis was FOMO on steroids. “As long as the music is playing, you’ve got to get up and dance,” said Charles Prince, the CEO of Citibank. It soon turned out to be a Danse Macabre. Citi, the country’s largest bank, became a ward of the state. The entire financial system teetered on the brink before the federal government stepped in with a trillion-dollar rescue package.
Today, when I hear “sure bet,’’ “can’t fail,” or “don’t miss out,” bells the size of Notre Dame Cathedral’s Marie and Gabriel sound in my head. “The next big thing” might turn out to be a financial meltdown.
It remains to be seen what’s ahead for crypto. Integrating a novel form of financial exchange like cryptocurrency with traditional markets and fiduciary institutions is unprecedented. Certainly, there’s a large degree of FOMO at play. From the White House on down, the happy talk is endless. The number of crypto investors keeps expanding. FTX notwithstanding, the crypto industry continues to grow.
Author and crypto advocate Knut Svanholm describes cryptocurrency as a matter of mathematics. Perhaps it is. It’s worth recalling, though, that many of the people who engineered the exotic financial assets that helped cause the 2008 financial crisis were trained as mathematicians and physicists; Wall Street calls such people “quants”—short for “quantitative analysts.” But for me, history, not math, is the key to understanding our species’ soaring aspirations, unreal expectations, Brobdingnagian ambitions, willing blindness, and abject failures. The names change; human nature stays the same.
I recently picked up a copy of Charles Mackay’s 1841 classic, Extraordinary Popular Delusions and the Madness of Crowds. It’s a book I skimmed through in the only economics course I took in college. Although I didn’t remember many particulars, it left an impression. This time I gave its opening chapters a closer read.
Mackay provides an enlightening perspective on the tulip mania that gripped seventeenth-century Holland. Belief in the value of the tulip bulb drove its value to dizzying heights, until people stood back and began to question why it was so valuable. Reflecting on the tulip craze and other follies, Mackay observes:
In reading the history of nations, we find that like individuals, they have their whims and their particularities; their seasons of excitement and recklessness, when they care not what they do…whole communities suddenly fix their minds upon one object and go mad in its pursuit; that millions of people, simultaneously impressed with one delusion, run after it, till their attention is caught by some new folly more captivating than the first.
In November of 2020, I took a father-son car trip to the Gettysburg battlefield. In a casual discussion of the economy, my son Daniel mentioned crypto. A recent graduate of Fordham University, where he majored in film studies, Daniel—like many in his generation—has a more sophisticated grasp of economics than I did at his age. Daniel told me that he and some friends were thinking of buying Bitcoin. I replied that crypto struck me as more menacing than promising. To one degree or another, financial crises involve unregulated or underregulated markets. Besides, I would never consider investing in businesses whose fundamentals I was ignorant of.
In November 2020, when Daniel and I had that conversation, one bitcoin was valued at $14,833.75. At last glance, its value was $106,824.
Is it different this time, or will crypto have its own day of reckoning—and if so, how soon? Only time will tell. Meanwhile, I keep Mackay’s book by my bedside.
