Financial bubbles are inherently political. John Law’s doomed pumping of Mississippi Co. stock in 18th-century France came with the state’s blessing. Deregulation also helped fuel Japan’s 1980s market boom. More recently, Sam Bankman-Fried, the frizzy-haired mogul jailed for his role in cryptocurrency exchange FTX’s collapse, was accused by prosecutors of using over $100 million in stolen money to fund his lobbying efforts. When the good times roll, politicians rarely want to stand in the way.
Which is why nobody should be surprised or relaxed about crypto’s political comeback after its last boom-and-bust cycle, with Donald Trump leading the charge. With SBF’s sentencing in the rear-view mirror, and with new Bitcoin exchange-traded funds helping propel the digital asset to new highs, Trump has raised more than $4 million in crypto donations and sold almost 200,000 baseball-card-style NFTs depicting him as “America’s Superhero.” At a crypto event on Saturday, under the slogan “Make Bitcoin Great Again,” Trump, the twice-impeached convicted felon, vowed to fire top securities regulator Gary Gensler in favor of a more pro-crypto watchdog.
