The digital takeover: exploring crypto’s influence on American society

It started with an invitation that felt almost too exclusive to be real. Back in May, hundreds gathered at President Trump’s private country club in Virginia for a swanky evening. Among the esteemed guests was Justin Sun, a crypto billionaire who, notably, was under federal investigation for suspected financial crimes at the time. Their golden ticket to this gala? Being the top purchasers of $TRUMP memecoin, a cryptocurrency designed to benefit the Trump family.

“There is a lot of common sense in crypto,” Trump declared to the room, as attendees enjoyed a meal paired with Trump-branded wine and water. “And we’re honored to be working on helping everybody here.” Sun, visibly grateful, even received an 18-karat-gold Trump Victory Tourbillon watch. In that singular moment, crypto, it seemed, had somehow erased its murky past and ascended right to the very pinnacle of American power.

Cryptocurrency, which once saw itself as a rebel, now finds its champion in Donald Trump. And in this rather astonishing turn of events, its most influential advocate has starkly revealed the deep irony at the heart of this “new money” revolution. Crypto was initially pitched as a way to liberate us from government overreach. What “freedom” really means is becoming more obvious: it’s about removing all the protections that keep the wealthy from doing whatever they want, free from laws, supervision, and any notion of social responsibility—even if it leads to autocracy. Trump, with his insatiable appetite for money and power, has simultaneously exposed and embraced the inherent corruption within digital currencies, a corruption that, perhaps ironically, stems from the very libertarian ideals that birthed them.

The libertarian dream and its unlikely offspring

Libertarianism, that long-standing American political movement, has always been all about individual freedom and totally free markets. For a big part of our history, it was a hard idea to get people on board with. Rooted in a blend of 1950s radical free-market thinking and 1960s hedonism, it mostly existed on the fringes, managing to offend just about everyone by advocating for the abolition of things like public schools, environmental protections, the police, the age of consent, the U.S. military, and even the Federal Reserve. The Libertarian Party itself often felt like a sideshow, with delegates debating against laws banning child labor or mandating seatbelts.

The movement attracted a colorful cast of characters: anti-war and anti-police activists, gun enthusiasts, anti-tax business folks, contrarian thinkers, and conspiracy theorists. Remember Ron Paul, with his friendly grandpa demeanor, his obsession with the gold standard, and investment newsletters often laced with racist and homophobic undertones? Or Karl Hess, who largely avoided taxes by living through barter? Or Murray Rothbard, who, despite being Jewish, bizarrely tried to forge libertarian alliances by supporting Holocaust deniers? What they all shared was an almost religious devotion to severely limiting—or outright abolishing—state power, replacing it entirely with the power of the market.

Mainstream Republicans would sometimes flirt with libertarian ideas to push for free-market policies, but they’d carefully pick and choose: yes to tax cuts, no to legalizing drugs or shutting down the Pentagon. The true believers were always kept at arm’s length.

Libertarianism was, at its core, an elitist movement. The idea was that individual liberty, coupled with the state’s destruction, would usher in a new elite to govern everyone else. Ayn Rand, the libertarians’ favorite novelist, perfectly captured this: her rich, brilliant supermen scorn everyone else, seeing their victory as the freedom to rule without rules or laws to curb their self-interest.

Then, in the 1990s, the internet revolution gave birth to a peculiar technology that seemed tailor-made for extremist libertarian fantasies: the blockchain. Initially conceived as a way to authenticate and timestamp digital data, it offered a method for strangers to maintain a shared digital ledger online. With the blockchain, people could prove ownership, transfer assets, and even create contracts without a shred of paperwork, without dealing with auditors, banks, or regulators, and crucially, without paying taxes.

This technology quickly drew a devoted following of libertarians, especially those who had long fantasized about replacing government-regulated banks with a parallel financial system—one built on untaxable, untraceable, borderless online-only cash. They used this new tech to develop cryptocurrencies, with Bitcoin leading the charge.

From intellectuals to criminals to silicon valley

Beyond the eccentric, high-minded libertarian intellectuals, crypto also, almost inevitably, attracted criminals. It seems any tool designed to skirt conventional legality, to challenge existing laws, will draw those looking to exploit it.

The intellectuals had diverse goals: civil liberties activists wanted anonymous payments for political donations or for vulnerable industries like sex work. Ultra-conservative policy wonks dreamed of dismantling America’s central bank. “Anarcho-capitalists” envisioned a bizarre society of “nerd-warlords,” failed states, and corporate mercenaries. The criminals? They just wanted untraceable money to hide their illicit activities.

I met many from these disparate groups at libertarian gatherings in New Hampshire during the 2010s. Some were living a backwoods, prepper lifestyle, complete with raw milk, unvaccinated kids, fluoride-free water, and assault rifles. You’d find “End the Fed” bumper stickers, Ayn Rand novels, and t-shirts proudly declaring “AN ARMED SOCIETY IS A POLITE SOCIETY.” Many were raising money for the legal defense of Ross Ulbricht, the creator of the dark web drug marketplace, Silk Road, who had been arrested by the FBI. Everyone, it seemed, wanted to talk crypto over snacks of paleo granola and homemade deer jerky.

Then, a few big names in Silicon Valley took notice. Peter Thiel, an extreme libertarian with a long-standing belief in the failures of democratic institutions, was an early adopter. He’s almost as famous for his outlandish views—like floating “seastead” tax havens in international waters and lamenting women’s suffrage—as he is for his investment savvy. Thiel had long argued that money creation should be taken from central banks and handed to the private sector. His original vision for PayPal, which he co-founded in the late 90s, was meant to fulfill this goal before it evolved into a more conventional online payment service.

Another early crypto advocate was Marc Andreessen, the Netscape co-founder whose work was pivotal in the internet revolution. Unlike Thiel, Andreessen’s political profile was more standard Silicon Valley, with a history of donating to Democrats and openly supporting Barack Obama and Hillary Clinton. In early 2014, shortly after his firm began investing in crypto, Andreessen promoted a noble vision for crypto: to make the world a better place by bringing the “roughly 175” countries without modern banking systems into the global financial infrastructure.

Whether crypto aimed to replace the local bank or build new banking systems thousands of miles away, the core goal for these men was similar. Thiel and Andreessen had placed huge bets on creating their own financial system, one that could supplant the existing one and deliver colossal returns. Such big-name investment quickly drew countless others, fueling numerous new crypto startups.

Both men focused on crypto’s “legitimate” potential, often downplaying its deep ties to the criminal underworld. In 2013, the Drug Enforcement Administration estimated that up to 90 percent of Bitcoin transactions that year were for illicit activities, including drug sales, blackmail, ransomware, and illegal pornography. Many traditional financial leaders were skeptical, including Donald Trump, who, during his first presidency, dismissed crypto as “highly volatile” and “based on thin air.”

The boom, bust, and political pivot

Then came COVID-19, and with it, the Federal Reserve’s drastic interest rate cuts. Venture capitalists, flush with what was essentially free money, poured it into the “hot new thing.” The more capital that flowed into crypto startups, the more others followed—a classic “fear of missing out” frenzy that turned high-risk investments into a speculative gold rush. This created a vicious cycle of cash, hype, and increasingly unrealistic valuations. Bitcoin, virtually worthless in 2010, briefly hit $69,000 by November 2021.

Valuations soared, and so did the promises. Morgan Stanley’s then-chief global strategist even suggested in 2020 that crypto could replace the U.S. dollar as the global reserve currency. Bitcoin was touted as “digital gold,” a safe haven from future financial crises. Podcaster Joe Rogan expressed his distrust of traditional banks and his belief that Bitcoin would become the universal currency.

In 2021 alone, $33 billion in venture capital flooded into crypto startups—more than all previous years combined. Crypto.com spent $700 million to rename the Staples Center and featured Matt Damon in an ad comparing crypto investors to intrepid explorers.

While criminality continued unabated, millions of Americans found another use for crypto: gambling. As industry researcher Molly White noted, users were rapidly trading various cryptocurrencies, trying to profit from their wild price swings. The pandemic, which fueled an explosion of online speculation, made currencies so volatile they couldn’t possibly fulfill Andreessen’s vision for developing nations. There was also virtually no one to hold anyone accountable for falsified results, Ponzi schemes, money laundering, or “rug pulls”—where a new crypto is hyped to naïve investors, only for the creators to disappear with the cash once enough people buy in.

By the end of 2022, FTX, once a leader in the industry, was bankrupt, and its founder, Sam Bankman-Fried, was arrested, later convicted, and sentenced to prison. Changpeng Zhao, then CEO of rival Binance, also faced prison time, and his firm was fined $4 billion for profiting from countless scams and crimes—like helping ransomware hackers and child abuse sites process payments, and enabling transactions for sanctioned entities like the Islamic State, Al Qaeda, and North Korea.

The Biden administration had begun efforts to rein in the sector, but their approach was, perhaps typically, inconsistent and cautious. “Pause letters” asked firms to halt projects that didn’t even seem to violate any rules, and executives complained about businesses getting bogged down by rapidly shifting federal regulations. Some crypto firms found themselves cut off from banking services—a measure usually reserved for dangerously risky or criminal clients—often without clear explanations.

This regulatory uncertainty led to numerous crypto company bankruptcies and waves of layoffs. Bitcoin’s value plunged. While the wild volatility, speculative fever, criminal activity, and collapse of major exchanges could reasonably explain the industry’s downturn, crypto’s most dedicated investors almost exclusively blamed President Biden. Andreessen, whose firm had about $7.6 billion invested in crypto (roughly 10 percent of its total capital), became convinced the Biden administration was actively trying to kill crypto altogether.

The Trump embrace: power, pardons, and profit

Wealthy crypto investors then turned to the “other guy.” Crypto offered Trump not only the promise of generous political donations at a time when his 2024 campaign fundraising was struggling but also a potential new demographic of young male crypto enthusiasts. Trump, in turn, completely changed his tune on crypto.

He chose Senator J.D. Vance of Ohio—Peter Thiel’s long-time protégé—as his running mate and, two weeks later, headlined the Bitcoin conference in Nashville. “The rules,” Trump announced, “will be written by people who love your industry.” Andreessen, who had previously supported Democratic candidates, threw his weight behind Trump’s campaign. In total, the crypto industry became the dominant corporate donor in 2024, pouring over $130 million into the election, with the vast majority going to the Trump-Vance ticket.

Beyond the money, Trump’s commitment to crypto secured him a new voting bloc with clear interests. Some 50 million people owned crypto in 2024, and polling from Fairleigh Dickinson University showed Trump with a 12-point lead among this group in the months before the election—a lead unconnected to traditional Republican Party membership.

Trump won. Almost immediately after taking office, he ushered crypto’s biggest backers into the highest echelons of power. David Sacks, a close associate of Thiel, was appointed “A.I. and crypto czar,” tasked with designing the new regulatory framework. Associates of Thiel and Andreessen are now scattered throughout the administration.

The administration then began dismantling Biden-era efforts to control crypto. Many regulations, investigations, and enforcement cases against the industry have been rolled back or dropped. The Consumer Financial Protection Bureau, which had sought oversight of crypto payments to address scam and fraud complaints, was ordered to halt its activities. The Securities and Exchange Commission’s Crypto Assets and Cyber unit was rebranded into a smaller, more industry-friendly team.

Trump even pardoned crypto executives and, for the first time ever, a corporation. When he fulfilled a campaign promise and pardoned Ross Ulbricht, the founder of the dark web platform, it was hailed by the Libertarian Party as “an incredible moment in Libertarian history.”

With regulators defanged and oversight gone, Trump and a handful of tech backers have been able to seize power and merge their interests with the country’s resources as they see fit.

Over the past nine months, Trump has transformed crypto into an efficient and powerful cash-generating machine for his family. Remember Justin Sun, the gala attendee? Besides the roughly $15 million he spent on $TRUMP memecoin to get that ticket, he’s spent at least $75 million on tokens and investments tied to World Liberty Financial, a crypto-finance company mostly owned by the Trump family. The SEC’s lawsuit against Sun has since been dropped, and the agency stopped investigating businesses connected to him. And just recently, Trump pardoned Changpeng Zhao, the former Binance chief. Zhao and Binance, much like Sun, have been highly supportive of World Liberty. When the Trumps are willing to cut deals, there’s little stopping crypto’s biggest players from getting whatever they want.

Flush with money from the now-powerful crypto lobby, Congress and the administration have already passed one law allowing private companies to issue their own crypto and are considering another that would permanently prevent the government from issuing its own digital currency. This ensures there will be no free government alternative to the for-profit platforms and tokens controlled by Silicon Valley. The likely outcome? A permanent, private replacement of the existing financial system—the ultimate prize for a crypto venture investor. If price is any indication, confidence in crypto is soaring: a single Bitcoin is now worth almost $110,000.

The true cost of the libertarian experiment

President Trump has always viewed politics as an extension of business, a means to accumulate wealth, status, and power. But it took someone with his particular instincts to fully realize the darkest potential of the libertarian project. Trump seems to have grasped something that eluded generations of libertarian politicians and philosophers: instead of completely dissolving the power of the state, he could do so selectively. He could place himself and his allies above the law, while simultaneously using the full force of the state to punish his adversaries. He could promote crypto while still insisting he be in charge of the Fed. He could pardon allies while having his enemies charged.

For Silicon Valley’s crypto backers, there was never a paradox. “I no longer believe that freedom and democracy are compatible,” Peter Thiel wrote in 2009. He argues that individual freedom can best thrive in a society controlled by an elite of innovator-entrepreneur monopolists, whose command of money seems to give them command of everything else.

Thiel’s co-founded data-mining company, Palantir, is currently thriving amidst a flood of government contracts—contracts for a system that aids in mass surveillance of U.S. citizens, including facilitating ICE raids. During Trump’s second term, Palantir has already received over $113 million in federal funding and secured a $1.3 billion contract from the Department of Defense.

And while Marc Andreessen may have once eloquently spoken about the democratizing promise of the internet, it was a full year before the 2024 election that he, too, publicly embraced a more authoritarian stance, advocating in his “Techno-Optimist Manifesto” for a society dominated by the “techno-capital machine.” A year later, in an interview conducted a month after Trump’s election, Andreessen referenced the “iron law of oligarchy”—the idea that a small minority always ends up governing society—and declared that “democracy is never actually a thing.”

Trump and his Silicon Valley backers may have taken different paths to their embrace of crypto, but they’ve arrived at the same destination: a world where the government, and the population it serves, exists primarily to advance their businesses, their personal enrichment, and their aggrandizement. So, the trick of libertarianism wasn’t played on them. It was played on us.

For decades, libertarians tried to sell us on extreme ideas like ending public schools, abolishing the police, dismantling environmental protections, and shuttering the Federal Reserve. None of those ideas ever truly gained traction, perhaps because they attacked real-world institutions we understood. It took an obscure technology, fueled by the Silicon Valley hype machine, mountains of questionable money, and a massive gambling craze, to convince millions of voters to embrace an extreme vision of individual freedom and decentralized money—and somehow overlook the authoritarianism and criminality that came along for the ride.

Crypto is, without a doubt, the most successful libertarian project in American history. A technology developed to escape the state is now squarely at the political center of a global superpower. Crypto has become a powerful engine for transferring control and wealth from the many to the few, a “bribery-as-a-service” platform for buying and selling influence among authoritarian oligarchs. It is the perfect technological expression of this “Trump moment”: the crypto era of our country.