The current spectacle of the cryptocurrency market buffeted by the pronouncements of an unpredictable industrialist and courted by the hand of the modern State offers a timeless lesson on the nature of money, freedom, and the pervasive temptation of government to control that which it ought not.
It is in this context that we must view the rise of Bitcoin, or any genuine digital alternative. When an entrepreneur such as Mr. Elon Musk observes that a digital asset is superior to fiat currency because its value is rooted in a resource that is impossible to fake, that is, energy, he is merely articulating an age-old truth. He recognizes that any currency, to be sound, must be costly to produce and cannot be expanded at the mere stroke of a politician’s pen. This is the ultimate, elegant indictment of the modern central bank. The State’s reaction to this digital challenge, however, is what demands our gravest attention.
The current administration’s actions are a study in institutional self-interest and fundamental contradiction. On the one hand, the Administration announces itself a champion of digital financial technology, issuing an Executive Order to support the crypto industry, even moving to establish a Strategic Bitcoin Reserve. On the other hand, the President and his family are simultaneously and deeply entrenched in their own array of crypto ventures, from World Liberty Financial to a personal Memecoin.
We must be clear: It is not the pursuit of profit that is objectionable; that is the lifeblood of a free economy. What is repugnant is the unprecedented conflation of private enrichment with public policy. When one family stands to benefit tremendously from the very industry its administration is charged with regulating, the line between public servant and private rent-seeker vanishes entirely.
Moreover, the State’s alleged support for competition is instantly betrayed by its explicit prohibition of a Central Bank Digital Currency (CBDC). While a CBDC raises its own considerable concerns regarding privacy and the surveillance state, concerns that a true libertarian must never dismiss, the State’s reluctance to introduce a competing digital currency is a naked admission that the only competition it will tolerate is that which it can ultimately manipulate or, failing that, benefit from. The free market of ideas and currencies is not a threat to a free society, but the only sure guarantee of its survival.
Perhaps the most telling and pernicious policy is the deliberate dismantling of regulatory and enforcement mechanisms. The disbanding of the Department of Justice’s National Cryptocurrency Enforcement Team (NCET) and the sudden cessation of investigations by the SEC do not represent a genuine move toward deregulation. They represent the creation of a regulatory void—a calculated effort to ensure that the President’s allies and family are free to operate without the inconvenience of legal scrutiny.
Critics call this the creation of a playground for scams, and they are correct. When the rule of law is selectively suspended, when the State announces that it will not pursue prosecution against those who commit what are deemed regulatory violations, it ceases to be a government of laws and becomes a government of men. Such an environment is not a free market; it is a lawless frontier that eventually crushes honest enterprise in favor of political favoritism and corruption.
Finally, we return to the root cause: the State’s addiction to spending. A True Dope fiend Move. When economists warn that the Administration’s fiscal and tariff policies are weakening the long-term standing of the U.S. dollar, they are simply stating that the inevitable consequence of profligacy is a loss of faith in the currency. In a world of unsound money, assets with perceived scarcity, be they gold, silver, or Bitcoin, will rise in value.
The ultimate tragedy here is the self-destruction of the State’s monetary monopoly. By continuously eroding the value of the dollar, the government unintentionally validates the very digital alternatives it once scorned. This rise of crypto is less a triumph of technology than it is a vote of no confidence in the political class.
The promise of cryptocurrency is one of choice, transparency, and the separation of money and state. The present danger is that a new form of money, born of liberty, will be subverted by the same corrosive forces of political and financial self-interest that ruined the old. The people must demand not preferential treatment, but a true hands-off policy—a free market for currency, judged not by political decree, but by the voluntary exchange of free individuals. There is no such thing as a free lunch, and there is certainly no such thing as a free crypto policy.