Ah, the sweet irony of great expectations. A digital currency born out of rebellion—created by an anonymous entity right after the 2008 financial crisis that America gifted the world—is now being paraded around by the very institutions it was designed to overthrow.
Bitcoin was meant to challenge financial systems under sovereign control. By offering an escape hatch from the state-controlled printing of fiat money and reckless monetary expansion, it was invented to decentralize currency management. Yet, here we are, watching the US government embrace it.
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For years, crypto cultists screamed about the tyranny of central banks, the evils of government oversight and the need for a currency free of state control.
The idea was to create a medium of exchange and store of value that wasn’t subject to government manipulation. And now? The very people who chanted “HODL”—short for ‘Hold On for Dear Life,’ urging us to invest in crypto for the long term—in defiance of regulators wrote campaign cheques to ensure their favoured politicians pass crypto-friendly laws. This qualifies as the greatest bait-and-switch of our time.
America’s so-called Crypto Strategic Reserve is a glorified slush fund for billionaire backers who have presumably converted the world’s most powerful person to their cause by talking money (any kind of it). This looks like regulatory capture at its most blatant. Those who challenge the industry face well-funded smear campaigns and social media attacks.
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‘Crypto bros’ have been painting themselves as rebellious pioneers, out to tear down the old financial order in the name of decentralization and financial freedom. In reality, many of them are players in a casino where the house always wins and hapless retail investors are left footing the bill.
Their utopian vision conveniently ignores the real-world complexities that keep financial systems functional: regulatory oversight, consumer protection and economic stability. Instead of democratizing finance, they create closed circles of hype and speculation, where the loudest voices pump up unregulated assets before quietly cashing out, leaving the typical investor to watch her savings vanish.
The very regulations they sneer at exist to prevent the kind of disasters that crypto markets undergo with alarming regularity. FTX, Celsius, Terra-LUNA—each was hailed as ‘the future’ and each is now a cautionary tale.
Meanwhile, the US regulatory system is riddled with contradictions. For years, the Securities and Exchange Commission (SEC) was cracking down on crypto firms, warning about fraud, money laundering and volatility, only to suddenly change its tune on a presidential diktat. Trump, who once called Bitcoin a scam, has happily given it a form of official recognition.
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This is a real threat for global economies, where regulation is crucial for stability. When wealth moves into digital blackholes, governments lose control over taxation, economic planning and financial security.
Meanwhile, the ‘crypto bro’ dream of a regulation-free economy based on blockchain financial transfers is a haven for cybercriminals, money launderers and rogue states. Terror financing? Sanction evasion? Dark web marketplaces? All thrive. But when regulators try to rein in the chaos, the crypto elite cry foul, wrapping themselves in libertarian rhetoric.
What happened to the crypto dream of dismantling financial oligarchies? Turns out, it was never about liberation; it was about creating a new elite. The cypherpunk fantasy of ‘banking without banks’ has morphed into a corporate coup where the new overlords wear hoodies instead of suits, but their power grab is no less ruthless.
For years, the crypto elite have fantasized replacing governments with their own blockchain fiefdoms. Brian Armstrong, CEO of Coinbase, spent years lobbying for a world where ‘network states’ replace nation-states—a world where governance isn’t determined by democratic institutions, but by crypto token holders.
A world where taxation is voluntary, regulations are dictated by private entities and citizenship is a matter of buying into the right blockchain. In this dystopia, the rule-makers wouldn’t be accountable to voters, but to venture capitalists.
Let’s not pretend this is an inconsequential American absurdity.
And the US government seems ready to hand them the keys. The same country that tanked the global economy in 2008 with its subprime mortgage crisis, one that has run fiscal deficits in 77 of the last 90 years and racked up $34 trillion in national debt, now wants to grant crypto legitimacy? While its crypto reserve isn’t going to use public funds to buy tokens, as declared, its very creation signals acceptance of the idea.
Let’s not pretend this is an inconsequential American absurdity. Washington’s embrace of crypto could pressure other countries to follow suit. America has a knack for exporting its financial messes—ask any country that lived through the aftershocks of its past economic crises.
If there’s one thing that history has made painfully clear, it’s that when the US sneezes, the rest of the world ends up in the ICU. This time, let’s shore up our immunity before America sends us yet another financial pandemic.
The authors are, respectively, a corporate advisor, independent director on boards and author of ‘Family and Dhanda’; and co-founder, DeepStrat.
