Unpopular Opinions

The team thought a note from me regarding the election might be interesting. I’ll let you be the judge of that.

Three bits of context first though, since this full post will make many people (right and left) a little mad or uncomfortable.

For starters, I had one condition in drafting an election post-mortem: I will only publish my thoughts if Joe Biden wins. Opining on the election results as a white male tech bro with candid thoughts vs. PC spin would be a suicide mission if Trump were to have won reelection. Too much shrapnel to dodge. I added a second publication condition after seeing how close the election was and witnessing Trump’s behavior this week: absolutely no one would pre-review, much less edit, this post. It’s for their/our protection and for the integrity of the thoughts below.

My second bit of context is that my bet, hope, and political persuasions are evident in this tweet from Election Day, in which I predicted, hoped, and voted for a divided government with a Biden presidency and Republican-held Senate. I am pretty sure my father-in-law thinks I’m a Marxist and my brother-in-law thinks I’m an Authoritarian sympathizer, which actually makes me feel good because it’s in line with my true “radical centrist” position. I think Trump’s handling of COVID and general leadership style this year were disqualifying, but I’m terrified of an extreme Democratic counter-reaction to Trump in a "Blue Sweep."

Third (and most importantly since this is a crypto newsletter and you justifiably may not want to listen to my political opinions), it is literally impossible to talk about the impact of the election on the U.S. crypto scene without rolling up my sleeves and actually talking about politics a little bit. At least, it is impossible for me to do so while still explaining the “why” underpinning most of my conclusions. For those who don’t want the “why" and just the “what" that is understandable, and I’ve made it easy for you to do so.

My tl;dr:
+ President Biden will be an excellent transitional leader that quells social unrest and makes some progress towards uniting people. He and the opposition party have more pressing priorities than strangling a hypergrowth sector of the American economy (crypto).
+ Money printer will go brrrr, but not brrrrrrrrrrrrrrr. That’s good for America and the U.S. dollar. It’s at worst net neutral for crypto.
+ This result is a net positive for encryption and privacy, which is the real political battlefront of our era. Near-term partisan gridlock will give us the only win we can realistically hope for on that front: more time.
+ We’ve maybe just witnessed the permanent destruction of the fourth estate. Good. The future of speech belongs to citizen journalists, and crypto-powered platforms.
+ Slightly bigger government and slightly higher taxes are not going to slow down the crypto freight train.

Now, if you’re still reading:

In consideration of the context and warnings above, you hereby fully and completely release, acquit and forever discharge Messari, its affiliates and related entities, and each of their respective current and former employees, officers, directors, shareholders, partners, members, managers, agents, employee benefit plans and fiduciaries, insurers, trustees, attorneys, joint venture partners, transferees, successors and assigns (each a “Released Party” and collectively, the “Released Parties”), collectively, separately, and severally, of and from any and all claims, demands, damages, causes of action, debts, liabilities, controversies, judgments, and suits of every kind and nature whatsoever, foreseen, unforeseen, known or unknown, that arise out of your hurt feelings, anger or disappointment related to the thoughts below.

Let’s get on with it, then, shall we?

0. Let’s heal the divide, and kill extremistan. Political science is voodoo science, but some of us were closer to the truth than others. (Ahem.) I don’t know the exact odds, but my prediction of a decisive Biden victory and narrow GOP control of the Senate (plus gains in the House) was contrarian and correct. My sense was that “silent Trump voters” were underrepresented in polling. That’s because for many people, vocal (if begrudging) support for the President was genuinely dangerous this cycle. I believed the pollsters “fixed” their models to address 2016 discrepancies, but didn’t account for four years of incremental media attacks and extreme negative rhetoric towards Trump supporters that forced them into the shadows of “shame." Perhaps, it’s time to have some difficult conversations about race out in the open - calmly - instead of shouting down and de facto criminalizing dissent or even questions. Trump’s gains vs. 2016 among black-, hispanic-, indigenous-, and asian-american voters drown out ad hominems that Trump voters are racist. Kill cancel culture. Kill it with fire, and let’s work in good faith towards healing some of the very real divides in this country.

1. President Trump just won more popular votes than any President in the history of the country. It just so happens that President-elect Joe Biden won even more. The tightness of the election, The GOP’s ongoing control of the Senate, and this month's coming legal chaos all but guarantee that a President Biden will usher in a mini-era of moderation. This exercise in restraint and bridge building will in and of itself will be a full-time job. Confirming a cabinet alone will take time. Stimulus packages that prop up the still reeling post-COVID economy will be the next priority. I doubt many leaders will have time to focus on strangling a hyper-growth sector of the economy, particularly one in which the U.S. is the current global leader.

2. We’ll get stimulus and higher taxes, but not UBI and socialism. You can despise Senate Majority Leader Mitch McConnell, but he is a ruthlessly effective politician. He will likely go down as one of the strongest Congressional opposition leaders in history. And no, the Senate is not going to sacrifice the country on the alter of its 2022 and 2024 election prospects. It makes zero sense politically, anyway, as the GOP is a party in transition and need of an identity overhaul post-Trump. If you’re a cynic, that means they sex up Trumpism (and ignite the same base) without Trump. Same populism, new figureheads. My guess is they will fight on taxes, fight on immigration, fight on energy policy, but relent on spending. Money printer will go brrrr, and yet the dollar will strengthen because MMT will remain theory and not policy. Strong dollar + big spending + political “stability” = moon.

3. Encryption makes gains while hiding in plain sight. The current Justice Department and its Attorney General Bill Barr are no friends of encryption or privacy. Here’s hoping that a political transition in the executive branch impedes openly hostile policy towards encrypted money technologies. The recent Barr memo on crypto was particularly alarming with its language on anonymity-enhancing cryptocurrencies (“AECs”). Note this suggestion that “companies that choose to offer AEC products should consider the increased risks of money laundering and financing of criminal activity, and should evaluate whether it is possible to adopt appropriate AML/CFT measures to address such risks.” There's some strong "nice business you've got there...be a real shame if something happened to it" vibes in the memo. And there's also a great deal of sophistication in law enforcement with respect to emerging privacy technologies. So we’ve got major philosophical agreements on the legality of private money. I think we’re in a race against the clock in the encryption battle, so every delay is a good delay. An executive shakeup buys time.

4. The mainstream media must be destroyed. If you think that the media has been getting progressively worse and more overtly political over the past twenty years, wait until you see what happens when the ratings drop. I hate to tell you, but the defeat of Trump and the subsequent ratings destruction for the MSM is not going to lead to more feel-good news stories about puppies. The focus will shift to climate fear-mongering, the woke revolution, and the radical demonization of the McConnell-led opposition in the Senate. The main-stream media is a mess of toxic waste and poorly processed information…look no further than their inability to conduct polls or even to process real-time four function math during the election reporting. On the other hand, social media is a mess of selective censorship, Black Mirror-esque “unpersoning”, and algorithmic radicalization. (I'm too lazy to link to corroborating support pieces, but you know what I'm talking about.) A united future starts with the absolute unequivocal destruction of the current fourth estate. The solutions are not easy or obvious, but Balaji has my proxy vote for how best to usher in an era of citizen journalism. I genuinely believe the future of censor-resistant speech (like censor-resistant finance) will be built using crypto protocols and incentive schemes.

5. Bitcoin is inevitable. Crypto is inevitable. But the wheels of progress turn slowly. I’ll say again that slightly bigger government and slightly higher taxes are not going to slow down the crypto freight train. If anything, it might curb hot money excesses, where higher ordinary tax rates and clearer crypto policy will lead to more HODLing, less rampant market manipulation, and common sense enforcement actions. Brad Sherman (House), Elizabeth Warren (Senate), and Lael Brainard (Fed) are the most likely people to receive elevated status in Congressional committees and Cabinet roles that would impact crypto. None appear to be fans of bitcoin and frens, but their worst case instincts may be blocked by an obstructionist Senate.

Joe Biden has won the election and is President-elect, even if it takes a few weeks to become official.

We should trust that we will have a peaceful transition of power in America, just as we have in every other U.S. election to date. That’s what actually makes and keeps America great.

So let’s move forward, keep our eye on the prize, and stay optimistic for the future of a country that should embrace the tools we’re building to protect and enhance its foundational principles: individual liberty and the pursuit of happiness...without government permission or interference.

Trump is out. Long live President-elect Biden.

And long live bitcoin!

-TBI