This is part of Trump’s Great American Crypto Scam, a series about the catastrophic collision between the second Trump administration and the wild world of cryptocurrency. Read it all here.
If you are a person who reads the news, you are a crypto news consumer, because in this new American moment, the people heading the crypto industry are very powerful and never stop talking. More than that, if you are an index fund investor tracking the whole U.S. stock market, you are now a crypto investor, by way of your fractional holdings of companies that have made crypto essential to their businesses.
These things were true long before Donald Trump returned for a second term, put crypto buddies in government posts, and issued a flurry of executive directives for which the crypto industry had long been frothing at the mouth. If you don’t care about crypto and have been trying to ignore it, I’ve got bad news: It’s time to pay attention.
If you are like me, you may find all of this utterly impossible. I had no trouble comprehending that some people on the internet had developed a coin inspired by a picture of a Shiba Inu, or that it came to be called Doge, or that Dogecoin got popular enough to reach a nominal market capitalization of more than $70 billion. (Now it’s worth a mere $40 billion or so.) It is harder to comprehend that there is now a governmental entity called DOGE, and that it got its acronym because the richest man in the world still has said token on his mind four years after it first took off. I can grasp that there are unelected racist teenagers looting my government, but not that they are flying under the banner of a shit coin that broke containment. How can something so unserious be so mission-critical to living here in 2025?
Just by existing in America’s political and financial systems, we and crypto have taken a substantial interest in each other. Our best hope of surviving the deluge is to master the art of separating the serious crypto things from the unserious ones. Lord knows we’ll have time to practice.
Unserious: A Form of Currency
Less than 1 in 5 Americans has ever directly owned crypto, let alone used it to buy something. In fact, the rate of crypto users among us has barely budged in three years. The predictions of crypto’s true believers—that it would become a common medium for people to buy and sell things, one that could rival fiat currency—remain fantasy. It feels surreal to type out those facts, though, because crypto’s failure to break through as a payment form has not stopped it from becoming culturally inescapable.
Serious: An Electoral Influence Machine
Crypto backers seem to have a pathological inability not only to stop talking but to stay off the rest of our screens and airwaves. Crypto interests accounted for nearly half of the corporate money spent on the 2024 federal elections, according to progressive think tank Public Citizen. Only the defending champion, fossil fuels, outflanks crypto in rich people’s spending to influence politics. “It’s like the corporate money Death Star,” one of the researchers behind that report told Slate last fall.
Both Serious and Unserious: An Investment Vehicle
Bitcoin just passed $100,000 for the first time. This is a bit weird, given that Bitcoin does not represent a share of the future cash flow of anything and has no underlying value aside from our collective confidence that someone else will be there to buy it from us. I find this a bit surreal, but it’s been four years since GameStop, and meme stocks are still chugging along as a class, aided by deepening internet delusion. I wouldn’t put my name on a prediction that all crypto holdings will one day crash.
Serious: Corruption
Donald and Melania Trump each launched their own crypto tokens in January, which will serve as useful bribery mechanisms for those who’d like to declare financial fealty to the new president and lift the paper value of his holdings at the same time. Anyone who would like to boost the Trumps’ net worth for the sake of it is welcome to do so. But that’s not everyone who bought $TRUMP.
Sophisticated traders made a lot of money in a mad dash to own the coin—more on that in a minute—but plenty of traders were out of their depth and lost their shirts. How many are die-hard Trump supporters? We may never know. Meanwhile, the Trump family made something on the order of $100 million in trading fees alone, according to reporting and analysis by crypto experts and a review by the New York Times.
Call it what it is: The president and his family are using regular people as a piggy bank, without any of the altruistic pretense required when Trump or his campaign asks them directly for money. Plenty of market actors will enthusiastically make that deal, and plenty cannot possibly afford it.
Many crypto industry types thought Trump’s meme coin was a betrayal. How dare he take a speculative currency backed by nothing other than other people’s continuing to buy it, then use it to enrich himself? Our president is neither the first nor last person to make this move. (He didn’t even beat “Hawk Tuah” Girl.) But our nation’s anti-corruption laws, not that they’ve had much sway of late, were never meant to contemplate the most powerful person in the country establishing a crypto token in his name.
Unserious: Big Numbers
In January, Trump’s meme coin launch caused some of the most severe crypto whiplash that the American public—and certainly its major news outlets—has ever experienced. Trump and his partners created a billion coins, with 800 million of them in the possession of Trump’s own companies. The price of the coin popped, with some people buying it on Jan. 19 for more than $70. Trump, owning 800 million of those coins, found himself minted a “crypto billionaire” in the pages of Axios. Seventy dollars multiplied by 800 million coins is indeed $56 billion. Trump’s net worth, the outlet reported, had increased several times over.
That assessment was technically accurate but fundamentally unsound. $TRUMP was a popular token that day, with about $20 billion worth of it changing hands. But 80 percent of the coin was never available to the general public, and it was certain that trading would slow down after the first day or two. There was no reason to believe that Trump’s “$56 billion” stake was liquid. If his companies were to actually off-load hundreds of millions of coins in a classic pulling of the rug on his biggest fans, those coins would have sold for much, much less than $56 billion.
A version of this problem exists with all large holdings of any investment, because selling big amounts pushes the price down. But the dynamic is more extreme when the asset at hand just does not trade that frequently. Trump’s holdings in the coin are now nominally worth more like $3 billion, as the price of one $TRUMP has dropped below $15.
This inadequate presentation of crypto value is a common theme, as the crypto journalist Molly White has detailed. Some coins that barely trade at all have nominal values of many millions of dollars, because establishing a market capitalization for a niche piece of crypto, hoping that it’ll go to the moon, is hilariously easy.
For example, Slate could create 1 million SlateCoins, and I, a Slate contributor, could buy one for $10. Slate’s holding of SlateCoins would suddenly have a market capitalization of $10 million—a tremendous but totally fake windfall for our organization. I am exaggerating about how easy it would be, but only a little bit. The collapse of Sam Bankman-Fried’s FTX stemmed from a calculation quite like this made-up one.
You will get enough whiplash from learning that all the Bitcoin in the world is now worth almost $2 trillion, a figure that is more or less accurate, because lots of people are always (for now, anyway) happy to buy Bitcoin. No need to add to your bewilderment by paying too much attention to fugazis.
Serious: Big Companies
There is a company that has long gone by the name MicroStrategy. It opened up shop in 1989, and its Wikipedia page still notes that it is “an American development company that provides business intelligence (BI), mobile software, and cloud-based services.” None of that is why anyone talks about MicroStrategy now, though. In 2020 the business decided to start buying a big pile of Bitcoins. It has spent about $29 billion on Bitcoin, and its big ol’ Bitcoin pile is currently worth about $45 billion. It isn’t quite right to say that buying Bitcoin is the only thing MicroStrategy does these days—its software business turned an $82 million profit in the third quarter of 2024—but I don’t think most people really care about MicroStrategy’s software business. That venture shows up only when you scroll way down the page on the company’s earnings reports.
MicroStrategy owns Bitcoin now. That is what it does. And for owning $45 billion of Bitcoin, the company has a market capitalization of about $90 billion. It helps to be good at marketing and have a charismatic CEO named Michael Saylor who can get people so excited about crypto that they’ll pay roughly twice the value of a company’s crypto holdings (which are pretty much all its holdings) to own the company’s stock.
Maybe you do not have the appetite to buy the stock of a company whose business plan is “We buy Bitcoin.” But you may very well own that stock anyway. MicroStrategy is now 0.1 percent of Vanguard’s big exchange-traded fund that tracks the total stock market. Coinbase and Robinhood Markets, two companies whose businesses hinge on the trading of crypto, are another 0.14 percent. BlackRock, the asset manager that offers a fund that tracks the price of Bitcoin in stock form, is 0.24 percent.
These are not huge numbers, but you can take your own guess about whether they will go up or down. You did not plan to stake your 401(k) on artificial intelligence, but now Nvidia alone is more than 5 percent of your portfolio if you own only funds that track the market. Your retirement will have something to do with the performance of crypto even if you own all the nation’s big companies, not crypto.
Oh. MicroStrategy just changed its name to Strategy and made its logo look like the Bitcoin logo.
Unserious: Decentralization
The defining value proposition for crypto as a serious currency, from its early days, was that nobody was in charge. It was a truly decentral medium, one beyond the reach of bad actors, be they meddling regulators, authoritarian governments, or an abusive spouse who controls the family bank account.
For a while, this was a reasonable point. People had highly personal solutions to hold their Bitcoin. Some kept them in cold storage, on computers or drives disconnected from the internet. Some printed out private keys to access their Bitcoin and stored the paper somewhere safe. (Risky! Don’t lose that paper!) Crypto went from person to person on a blockchain rather than through the banking system, and there was nothing resembling a central repository for regular people to put all their Bitcoin.
“It’s decentralized, so there’s no country or company that controls it,” Brian Armstrong, the CEO of Coinbase and the industry’s most aggressive spokesperson for crypto, told the Hoover Institution in 2024. “It’s a little bit like gold in that sense. There’s no central authority.”
Not exactly. Blockchains are inherently decentralized, but the way regular people use crypto is now extremely centralized. They keep it on exchanges like Coinbase, which has myriad powers over its users and their crypto. Coinbase decides which tokens are listed for sale on its platform, playing a bit of God over which ones get public exposure. Coinbase lives by the same money-laundering and know-your-customer laws that an actual bank does. Coinbase is the custodian of its customers’ holdings, giving it the ability to freeze funds when it believes it has a legal reason (or, in theory, whenever).
Crypto purists have argued these points for years. “Not your keys, not your coins,” they like to say. But these people have lost the war. The functional user experience of crypto is now as centralized as anything in finance. And if you don’t like or trust major crypto exchanges but still want to hold some Bitcoin, good news! You can effectively buy it via an exchange-traded fund offered by BlackRock, the world’s largest asset manager, with more than $11 trillion under management.
You can entertain crypto as part of the world financial system, or you can maintain the pretense that crypto is the countercultural beacon of freedom that its earliest boosters claimed it would be. You cannot do both, but you may be able to buy a lot of TV commercials for a politician who will help you keep up the act.
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