What The Hell America!

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In 2019, President Donald Trump asserted that cryptocurrency was “highly volatile and based on thin air.” The description is still highly accurate—but Trump seems to no longer believe it. These days, he praises the crypto community as brimming with “the kind of spirit that built our country and is exciting to watch.”

What happened between Trump’s first and second terms is fairly predictable. Crypto advocates flattered him, and then he and his family personally invested in various crypto-related ventures. Just before his inauguration in 2025, he launched a $TRUMP meme coin, which reportedly has made his family and their partners a lot of money. Trump’s oldest sons recently invested in a bitcoin-mining operation. And they hold majority stakes in World Liberty Financial, making them major dealers in the crypto world. That might help explain why the president has declared that he wants the United States to be the “crypto capital of the world.”

What’s less predictable is how the president’s change of opinion could destabilize the American financial system. In this episode of Radio Atlantic, we talk with the Atlantic staff writer Annie Lowrey, who covers the economy and politics, about Trump’s plans to integrate crypto into the government and mainstream banking. What happens when Trump weakens regulation on a notoriously unstable currency? Who benefits? Who is likely to get duped? And when the crypto-induced financial crisis comes, how will it surprise us?

The following is a transcript of the episode:

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Hanna Rosin: Cryptocurrencies like bitcoin have been around for a while now. And headlines about crypto always have a boom-and-bust quality: overnight billionaires and tech entrepreneurs, scams and collapses on absurd scales.

It wasn’t clear which way the crypto story was headed, because Trump opposed it in his first term, but now he’s made a big turnaround. Trump has become very pro-crypto, pushing to change regulations and create a world where crypto plays a much bigger role in Wall Street and in Washington—all while he and his family stand to profit from crypto investments of their own.

I’m Hanna Rosin. And this week on Radio Atlantic: crypto in the new Trump era.

With so many high-stakes changes coming from the administration, it’s easy to push the crypto story aside.

Rosin: That’s Atlantic staff writer Annie Lowrey, who writes about the economy and politics, and she’s here to tell us why we shouldn’t lose sight of this one, because what Trump is proposing could have real risks for all of us. And the people who are paying the most attention are the ones pushing for it to happen.

Rosin: So let me just start basic: What was the initial idea of cryptocurrency, and how did it evolve over time?

Lowrey: Cryptocurrency initially started as basically a way to create a financial structure outside of governments and outside of the banking system.

Lowrey: It was really, really outsidery. It was kind of utopian.

Lowrey: It was very, very techy. And from the very outset, it was simultaneously a currency, so supposed to be a store of value, an investment—perhaps something that you could put money in and get more money back later—and also a financial technology that would allow people to transfer money between each other without having to go through the kind of financial conduits that are controlled by governments and banks.

Lowrey: So a certain level of anonymity and privacy—that you wouldn’t necessarily have, you know, Uncle Sam looking over your shoulder—and again, just something that was outside the aegis of the system that a lot of early crypto adopters really felt was suspect, something that could be, you know, universal, global.

Lowrey: There were some other kind of kookier ideas out there too, right: that this would come to supplant the dollar; that, you know, this would be a way to rebuild the entire globe’s financial architecture. I think none of that is true at this point. But it was a very heady idea, and I feel like the idea of crypto has in some ways gotten smaller and smaller and smaller.

Rosin: So what evolved? What’s going on with crypto these days?

Lowrey: When I say that the idea has gotten smaller, I think that unless you are a die-hard crypto booster in Silicon Valley or elsewhere, you no longer think, probably, that this is going to supplant the global financial ecosystem, that this is going to lead to the demise of the dollar and the euro and the yen, that this is going to eliminate banking and radically change how we use money.

This is a speculative instrument, right? So I’m going to buy and hold with the hope that it’s going to go up in price. Or, you know, I’m going to bet against it and hope that it’s going to go down. Or I’m going to invest in these crypto companies, and I think this one is going to make a lot more money than that one.

And I would note that I feel like people somehow underrate the degree to which crypto remains a foundational part of black markets, even today, right? It’s been a big part of our regulatory skepticism and legal skepticism of it—is that it is used for human trafficking. It is used for drug trafficking. It is used for terrorism, state sponsored and not state sponsored. And a lot of crypto activity happens outside of the United States precisely because companies cannot or do not want to comply with American securities and banking laws.

Rosin: You said, “speculative instrument.” What does that mean exactly?

Lowrey: I mean, so for a lot of people, it’s a very, very lucrative investment, particularly if you bought early, right?

Lowrey: But we say it’s a speculative asset. You know, it’s a price that is unusual in the sense that it’s completely untethered. So when we think about investments in general—so a stock, right? You know, if I’m going to buy a share of a stock, I’m not just getting the value of the stock itself; I’m getting the money that that company is going to remit to shareholders. The value of the stock and the amount of money that’s going to get remitted to shareholders is based on the company’s core financials, what they’re buying and selling.

Bitcoin is different in the sense that there’s nothing underneath at all. There’s no way in which it’s generating and throwing off cash over time, and there’s literally nothing there.

It’s like a lottery ticket. Even something like gold, which is a really speculative asset in the same way—gold itself does have, like, industrial uses. There are things you can do with gold. You know, there’s really almost nothing like it. You know, even Beanie Babies or tulip bulbs, right? You have the Beanie Baby. You have the tulip bulb.

Here, it’s, like, nothing. It’s a bunch of numbers. That’s it.

Rosin: Right, right. And what’s the significance of that? Like, I know it sounds weird and alarming and virtual, but why is that an important thing to think about? Because money is also nothing. It’s just, like, a thing that we’ve all agreed is worth a certain thing that can be traded for other things.

So why does it matter that there is no there there with bitcoin?

Lowrey: It means that the price is purely speculative and completely and only based—literally only solely based—on interest in the asset.

So imagine that everybody decides, No more bitcoin. We’re all moving to ether or another cryptocurrency. There’s nothing underlying the value of bitcoin. If bitcoin had some beating heart of an investment, right—like, it was an apartment building where you could rent the apartments out, it was a farm where you could eat or sell the apples, any of a million other things I could think of—there would still be some base value to it. And the thing with crypto is that there’s nothing.

And so you’ll see these, you know, smaller cryptocurrencies just completely crash and burn. And so it means that they’re much more volatile, and it also means that they’re harder to assess the value of, because there’s no underlying value. It’s just literally a bet on who’s going to want it at what price.

Rosin: Okay. I think I’m starting to understand, in your voice—you haven’t said this yet—but I think what I’m starting to understand is it’s: The volatility probably makes everything more risky, and people involved in it more vulnerable, and makes it more vulnerable to manipulation.

Lowrey: Absolutely. And so if we were talking about somebody that we wanted to advise to have investments but to have pretty safe investments, usually we talk about, like, a bond, right? And bonds are low risk because they come with these kind of steady income streams—even, like, a government bond, you’re going to need the government to decide not to pay the bondholder in order for that to be a bad investment in some cases. And there’s sort of—I’m simplifying a lot here, right? And with crypto, you might be pretty confident that the price is going somewhere, but there’s no guarantees about anything, and it’s like you’re in a room in which you’re trying to suss out what everybody else is trying to do.

Rosin: Is the riskiness theoretical? How volatile has it actually been?

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Lowrey: I mean, it has boomed and busted and boomed and busted and boomed and busted, and it’s boomingish right now but kind of busting a little bit at the moment.

If you remember back to just a few years ago, crypto had this big mainstream advertising push. The Staples Center was renamed the Crypto.com Arena. You started to see ads on television challenging people to embrace risk and invest in crypto.

Lowrey: In the 2022 Super Bowl, there were these ads with LeBron James and Larry David that were hawking crypto.

Lowrey: And just months later, FTX, which was Sam Bankman-Fried’s crypto mega-exchange, it collapsed. And that fed a giant blowup in the crypto market, this enormous collapse in prices.

Lowrey: One thing that I’ve also written about is that, you know, in 2021 and 2022, you had a lot of targeted advertising in Black communities, which were slow to adopt crypto—kind of late to get in. But there was a ton of advertisement basically, you know, kind of making this argument to Black folks who might have been kind of skeptical investors that this was their chance outside of, you know, these stodgy U.S. financial companies that had redlined them and hadn’t treated them fairly—that this was their big opportunity.

And because there’s such great racial wealth disparities in this country, I think that this was a very kind of attractive case, and a lot of Black folks bought in when the bubble was about to burst, right—when the bubble was getting blown up. And then, you know, they bought in when crypto was really expensive, and then they saw the price of their investment crater.

Rosin: So into this boom-bust world of incredible volatility walks Donald Trump. What does his return to office mean for crypto?

Lowrey: So Donald Trump had been a crypto hater for a long time. He was like, I don’t like it.

Lowrey: He’s a real-estate guy, right? These are real assets.

Rosin: Tangible, touchable assets, yeah.

Lowrey: Tangible, touchable assets. But he’s also, you know, part of the scam economy, right? His Trump Steaks and his Trump shoes and his Trump Bibles and his Trump University.

And my sense of what happened by talking to people in this industry is that crypto folks began flattering Donald Trump, and they started sending him a ton of money, and they started setting up business ventures with his family members—with his sons—and all of a sudden, he became wildly pro-crypto, probably more than any but just a couple handful of members of Congress.

Lowrey: And so he said he was going to make, you know, the United States the crypto capital of the world. He was promising pro-crypto legislation. He said that the Biden administration had basically been strangling this nascent industry and punishing it by attempting to get it to comply with United States securities laws and banking laws. And that’s where we are right now.

Rosin: All right, so Trump is into crypto now, and I get that that’s risky. You’ve said that. But what if I never want to buy crypto or I never even want to think about it? Why do I care? What does it matter to me?

Lowrey: Right now, you or I or anybody can go buy crypto assets, right? We can go get bitcoin. We can go get any number of crypto assets. And that risk is ours. We can lose all our money on crypto if we want to. Crypto is not really knitted in with the American financial system, although that is changing slowly and is about to change quickly.

And so when these really volatile assets crash, you can have a lot of kind of personal pain. A lot of people could personally get scammed. They can lose a lot of money. But there isn’t broad public risk. Donald Trump is planning on doing a few things.

So first, he’s planning on cutting financial regulations for all financial businesses, so deregulating. He’s reducing financial regulatory enforcement through the SEC and the other alphabet-soup agencies that do that in the United States. He’s thinking about creating a crypto reserve, so using public assets to purchase bitcoin, ether, probably some other currencies. And then he’s promised to sign a bill that would change the regulatory status of crypto, among other things.

At the same time, it’s also worth noting that his family and he are kind of in the crypto business now. They’re staked in a company called World Liberty Financial, which sells tokens. His older sons recently invested in a [bitcoin]-mining operation. And before the inauguration, they launched a $TRUMP meme coin, which cratered in value but appears to have made his family and their partners a lot of money, just from skimming from the transactions.

And so all of these things are happening at once. And the thing that I fear is that you could end up with less price volatility because you have this kind of stable government investment and this government interest—now a public interest—in stable crypto prices.

But you’re socializing risk. It could be the taxpayer that’s called on to bail out crypto businesses, the taxpayer that’s putting, you know, public resources on the line. And I worry that Donald Trump is taking risk away from crypto investors—particularly big crypto magnates—and is putting it on the American taxpayer, on the citizen, in a way that, you know, I don’t know that the taxpayer, the citizen is going to have those benefits redound to them.

Rosin: Okay, that was a lot. Let me make sure I understand that. So before, crypto was in a separate world, and whoever invested in it just took on the risk themselves. It wasn’t integrated in the American economy in any particular way. And was it heavily regulated? Is that one of the things Trump is changing?

Lowrey: So crypto was interesting. And this is all really technical. Basically, there had been an argument from the crypto industry that crypto assets were different than the assets that were regulated by financial regulators like the CFTC and the SEC—basically that crypto needed its own legislation.

American financial regulators, by and large, rejected this argument. And so Gary Gensler, the former head of the SEC, basically said, Almost all crypto assets are securities, and securities are regulated by me here at the Securities and Exchange Commission, and we don’t need new legislation. We need all of you to comply with securities laws, which are quite strict.

Lowrey: And I think to give the crypto industry some benefit of the doubt on this, there were some questions about, like, Okay, is this a commodity or a security? Who should regulate? How does this rule exactly apply for a bunch of really technical reasons? But that was the world that we’re in.

And from my perspective, it worked fine, right? You know, there were lots of crypto companies in the United States. You know, the financial system was mostly protected from this quite scammy, quite volatile industry. But the industry didn’t like it, in part because Main Street and Wall Street banks declined to do a lot of business with crypto firms, because of questions about how they would be regulated.

If they did that, would it be safe for them? Would they get into trouble with their regulators? And that’s really one of the things that’s changing now that we’re on the precipice of pro-crypto legislation coming out that, I think, is going to dramatically increase risk in the American financial system.

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Rosin: When we’re back: What does a crypto-doomsday scenario look like? And how worried do we really need to be?

[Break]

Rosin: Okay, one thing you said that isn’t so clear to me: You mentioned a bitcoin reserve. Like, I understand what an oil reserve is. I can visualize it. I can get what it’s for. What is a bitcoin reserve, and why is that interesting to Trump?

Lowrey: I wish I had a great answer for this, because there’s no point. This is a pointless, stupid thing to do, right?

Rosin: Uh-huh. (Laughs.)

Lowrey: Sorry, I don’t know if I should say that.

Rosin: No, I mean, maybe I feel better. Maybe that’s why I don’t understand it. Yeah.

Lowrey: This is a pointless, stupid thing to do on a lot of levels. So the plan, you know—and again, we don’t know yet—but the plan is to take $100 billion or so and to buy bitcoin and ether and a bunch of other cryptocurrencies.

And the U.S. government owns, depending on the day and the market value, roughly $20 billion of cryptocurrency that it has seized as a civil-asset forfeiture or in criminal cases. So they probably put that in there.

And look—the United States has a bunch of strategic reserves for strategically important goods. So petroleum: They will release that when gas prices spike because of crude-oil shortages. We have strategic stockpiles of kinds of pharmaceuticals, certain minerals that are important in defense, that sort of thing.

But yeah, what’s the strategic point of the United States holding crypto? There is none, right? And this is a huge, huge boon—huge giveaway—to the crypto industry, an enormous one.

Rosin: Okay, so you have inched towards answering my big question, which is: Let’s say I never plan to buy or even think about crypto. I listen to this conversation. We talk about weakened regulations, no more enforcement. What risks do I have? Like, what risks am I holding?

Lowrey: Well, there’s two. The first has to do with public corruption. Donald Trump has, you know, taken a stake in this venture where we’ve had a foreign national with involvement with the American legal system, regulatory system effectively buying him off, right? Investing in these tokens, and then Trump gets a stake of that. He gets money from it.

Members of his family or representatives of his family have reportedly been holding talks to take a stake in the U.S. arm of Binance, which is the world’s biggest crypto exchange. That’s a company that pled guilty to violating American money-laundering laws.

Because of those kinds of laws, it runs a smaller offshoot in the U.S. And so Americans don’t actually access, generally don’t access the big Binance. My favorite fact about Binance is that it will not even name what jurisdiction it is based in.

And the founder of Binance pled guilty to violating money-laundering rules and is reportedly seeking a pardon from Donald Trump.

Rosin: So that’s effectively just another way in which we are becoming a corrupt, banana republic kind of country.

Lowrey: Yes, this is like the Trump Hotel next to the White House on steroids, right?

Rosin: Right, right, right.

Lowrey: So I worry about that. And I worry about President Trump and his agents in office not acting in the public interest in ways that might be opaque.

And so then the second, more material big problem that I’m worried about: So say you don’t have any investment in bitcoin. And so you’re like, Yeah, you know, the government’s getting in on it. But, you know, I’m not personally exposed. The thing that I am worried about is that Wall Street firms, in particular, will take the pro-crypto legislation and they will reformat parts of their business as crypto businesses in order to skirt financial regulations.

You know, this might sound outlandish, right? Maybe you’d say, Oh, wait. But all these Wall Street companies, aren’t they regulated by the CFTC and the SEC and OCC and the Fed and Treasury? And can they really do that? And would they really do that?

And I would say that, yeah, the U.S. financial industry excels in regulatory arbitrage. That’s, like, one of the main things that they do, is figure out how to get out from regulations. And so I worry about them investing in crypto, and crypto showing up on their books. But, you know, volatile crypto prices, I think that that’ll be somewhat self-limiting.

And the thing I really worry about is, you know, a repeat of 2008.

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Lowrey: I worry about bitcoin being today’s credit-default swap, today’s mortgage-backed security. I worry about it being the instrument that—through its lack of regulation, through its opacity—being, you know, the lit match with a lot of kindling around. That’s really what I worry about.

And that could be affecting people who have nothing to do with crypto, who have no idea it exists, who don’t have crypto investments but have a mortgage or have a retirement account or, you know, want to open a business by getting a small-business loan. Because the financial system, it’s based on trust. And, you know, if we increase risk in an opaque way in the financial system and reduce trust in it, I am terrified.

Rosin: Yeah. I mean, it doesn’t sound outlandish to me, and that’s exactly what I was going to say. The reason it doesn’t sound outlandish is because we all lived through the subprime-mortgage crisis, and we understood, eventually, that there were a whole bunch of things happening behind the scenes, like complicated financial arrangements, that weren’t exactly under the radar, but they did turn out to deeply affect the average American, and not just people who are out there speculating.

Lowrey: And that really was a fin-reg problem. And, you know, we had Dodd- Frank in the wake of that, which, you know, really made the system safer and has held up. And now they’re going to gut it.

Rosin: Right. We have a lot of soul searching and response to that, and yet that doesn’t really matter at this moment. Like, we’re not reading the crypto crisis coming in exactly that same way. Why?

Lowrey: I think crypto is seen as this fringy, edgy, hyper-speculative: Oh, it’s boomed and busted before.

Rosin: Ah, okay.

Lowrey: That’s my guess, is part of what is happening here. And I think that history repeats itself and we forget so often.

So one of the things that Dodd-Frank did was it set up this little institution in Washington called the CFPB, the Consumer Financial Protection Bureau, because there was a recognition that the many financial regulators that the United States has—from the Fed to kind of obscure ones like OCC and, you know, important ones like FDIC—they’re not really consumer facing.

And so they set up an organization that was really aimed at consumers, would really talk in plain language, and would not just help consumers who are getting ripped off by financial firms but would also watch for problems.

Rosin: Like, Don’t sign that mortgage paper.

Lowrey: Yeah.

Rosin: Exactly, exactly.

Lowrey: And then could communicate those problems to the Fed and Treasury and other organizations that could maybe do something about it. And that agency’s just gone.

Rosin: Right.

Lowrey: (Laughs.)

Rosin: I knew—as soon as you said that, I was like, Right. Of course. Right. That is gone. So we did set up guardrails that are now just destroyed.

Lowrey: Destroyed or in the process of being destroyed. The issue is still in court, but the Trump administration has functionally closed the CFPB. No work is getting done there right now.

Rosin: So aside from the subprime analogy, are there risks that are unique to crypto, like, different from what we saw unfolding?

Lowrey: The other risk with crypto—and in some ways, I think people underrate this—but it’s really scammy. There are a lot of companies that kind of get set up overnight, and they make a bunch of promises, and they target people who might not have a lot of savvy, not a lot of technical knowledge. And these people get ripped off, and they get ripped off in bitcoin, so it’s really hard to get the money back.

And so, you know, if you or I walked into a bank and we said, I want to send $10,000 to somebody in Southeast Asia, that would trigger a bunch of internal flags, both within the bank and also regulatory flags, right? Like, Why are you doing that? You know, Are you sure? Are you absolutely positive you want to do that? Okay. And probably somebody would sort of say, Okay, are you getting scammed? Did you read this pamphlet? Are you absolutely positive? And, you know, the problem—and ultimately, if you did really want to do that, like, it’s your money. You could send it. But there’s guardrails there.

And, you know, with crypto, we now have all of these, you know, older Americans, veterans, people trying to start businesses, people who are just, like, looking for a boyfriend on Hinge or a girlfriend on Bumble who are getting scammed. And this industry is worth, like, billions and billions of dollars. And there’s the kind of, like, little ticky-tacky personal scams, which, you know, people can lose their entire life savings in—you know, the little texts that come up: Hey. It’s Steve. How are you doing?

But then there’s also businesses that get set up that completely misrepresent what they’re doing and scam larger numbers of people. And, you know, we’ve had several Ponzi schemes in crypto.

And so I really, really worry about that too.

Rosin: At the total other end, what about other state actors?

Lowrey: Ugh.

Rosin: Like, is it vulnerable in that way? Did you say—

Lowrey: Yeah, it’s so bad. So, you know, it was just a couple weeks ago. Probably most people didn’t notice this. But, you know, there was a Dubai-based exchange called Bybit that got hacked. And it seems like the hackers, something called the Lazarus Group, which is run out of North Korea—out of the North Korean military dictatorship.

There’s a tremendous amount of state-sanctioned theft, state-sanctioned terrorism that runs through here. And one thing that I quite worry about is: If the United States government is invested in these crypto businesses, and these crypto businesses are sort of being under-regulated in the American system, you know, what happens if China or North Korea or another adversarial country—or just, you know, an adversarial terrorist group that isn’t state sponsored—comes in and decides to screw with the crypto markets?

So one way in which this could happen is something—I’m not going to get into the details of it, because it’s very detailed—but it’s something called a “51 percent attack,” which is that in a given crypto market, if somebody can take over kind of 51 percent of a blockchain, they can control the whole blockchain and kind of change rules within it. And, you know, we haven’t totally seen this happen, because it would be expensive to do. But I don’t know—maybe if you have state resources, it’s not so expensive to do, and maybe you want to do it now that Washington is going all in.

Rosin: Right.

Lowrey: And, you know, going back to what we were talking about before, about, you know, 2007–08 and the global financial crisis: One thing that I worry about a little bit is, you know, one way or another, Donald Trump is not going to be president four years from now, right?

Rosin: (Laughs.)

Lowrey: And it, well, I—

Rosin: From your mouth to God’s ears, Annie. But yes.

Lowrey: (Laughs.) I’m going to put a small—according to current American law, he shouldn’t be president four years from now.

Rosin: Mm-hmm. Thank you.

Lowrey: And financial crises tend to take a long time to brew.

Rosin: Ah, okay.

Lowrey: It took a long time for the 2007–08 crisis to really kind of sink in and the conditions to come that, you know, it just all started to fall apart.

And I think that especially if, you know, the U.S. doesn’t go into a downturn, the markets are probably going to be fine for a while. It’s going to take a while for Congress to pass legislation. And, you know, I really worry that it might not be the president after Trump, if current law holds, or the president after that or the president after that—that’s one thing that I really worry about.

Rosin: Wait. That you worry about or have hope in? The idea that they’re, you know—if he’s not president forever, people will reinstate some regulations, some rules. They’ll put a block in the slow brewing of collapse.

Lowrey: That’s a good point, but no. I mean, I don’t think they’re going to bother to reinstate rules afterwards, is my guess.

Rosin: Oh, okay. Yeah.

Lowrey: Who is going to prioritize floor time in the House to make sure that they get all the little Dodd-Frank provisions back? And industries, you know, the stronger they get, the stronger they lobby.

And so if you, all of a sudden, have all of these Wall Street, Main Street banks, crypto companies coming in and saying, like, No, no, no, no. Don’t go back to the old regime. Don’t do that.

Rosin: Right. Right. The motivations run in the opposite direction. Like, they’re suddenly making unregulated money through crypto, and why would anyone have the motivation to stop that train?

Lowrey: I mean, I think it’ll take another financial crisis for them to fix it—

Rosin: Mm-hmm.

Lowrey: —is my guess.

Rosin: Well, Annie, thank you for paying attention, and thank you for coming on the show.

Lowrey: Thanks for having me.

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Rosin: This episode of Radio Atlantic was produced by Kevin Townsend and edited by Claudine Ebeid. We had engineering support from Rob Smierciak and fact-checking by Sara Krolewski. Claudine Ebeid is the executive producer of Atlantic audio, and Andrea Valdez is our managing editor.

Listeners, if you like what you hear on Radio Atlantic, remember you can support our work and the work of all Atlantic journalists when you subscribe to The Atlantic at theatlantic.com/podsub. That’s theatlantic.com/podsub.

I’m Hanna Rosin. Thank you for listening.