Trump’s Bitcoin Hoard Unlikely to Sway Voters

**Analyzing Trump’s Bitcoin Reserve Plan: A Potential Game Changer for Voters?**

Although I don’t consider myself an expert in American politics, I’m deeply intrigued by the intersection of politics and fintech, particularly when it comes to cryptocurrency. Donald Trump’s plan to establish a strategic Bitcoin reserve has sparked considerable discussion. Many are asking whether this move will influence voters in the upcoming November election.

The Concept of Reserves Vs. Stashes

Labeling a government’s Bitcoin holdings as a “reserve” may be misleading. Typically, a reserve consists of something with direct utility, like oil. Bitcoin, however, is largely speculative with limited practical use. Compare it to the US government’s massive cheese reserve, which can be distributed to those in need. The utility of cheese is clear, but Bitcoin doesn’t offer the same direct benefits.

(Government cheese has a longstanding place in popular culture, referenced by icons like Jay Z, who sings “After that government cheese, we eating steak,” and Kendrick Lamar, who mentions consuming “cheese from the government.”)

Economists argue a Bitcoin reserve would primarily benefit crypto “whales” who already dominate the market, rather than adding genuine value for taxpayers. For these reasons, perhaps Bitcoin should be seen as a “stash” rather than a reserve.

Bitcoin in the Political Arena

Bitcoin enthusiasts might expect the reserve idea to be a turning point in the upcoming elections. Yet, political analysts suggest that cryptocurrency is not a decisive issue for most voters. Justin Esarey from Wake Forest University mentions that cryptocurrency has never been a significant concern for a large voter bloc.

Conversely, donations from the crypto sector are playing a notable role in the elections. For instance, cryptocurrency PACs pumped $40 million into the Ohio Senate race, backing Bernie Moreno against Senator Sherrod Brown, a critic of cryptocurrency.

But does this influx of crypto money translate to votes? Analysts like Nick Beauchamp at Northeastern University contend that crypto’s influence lies more with donors than voters. “The crypto ‘voting block’ is not voters but donors,” Beauchamp says, indicating that the number of actual votes influenced by cryptocurrency might be overstated.

Laura Shin, in her “Unchained” podcast, explores this very topic with economist George Selgin. Selgin remains skeptical about Trump’s and other politicians’ Bitcoin proposals, suggesting that governments shouldn’t invest in such volatile assets.

Crypto Influence: A Reality Check

Surveys put U.S. adult crypto ownership between 8-12%, which suggests that the actual influence of cryptocurrency on the voter base might be overestimated. Security concerns also shadow the public’s perception. Cryptocurrency-related complaints may represent only 10% of overall fraud complaints, yet they account for half of the total financial losses.

The Financial Times even deems the idea of a significant crypto voting block as “fanciful.” However, the financial contributions from crypto donors can’t be dismissed. Will these donations convert into votes, swaying the election outcome? While it’s uncertain, it’s clear that the strategic use of crypto funds is already impacting political campaigns.

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