Economist: Cryptocurrency has become the ultimate "swamp assets"

Author: Rust, who doesn 't understand the scriptures, does not understand the scriptures

"Drain the Swamp" is Trump's core campaign promise, which means to eliminate political corruption and special interest groups in Washington. However, on the issue of cryptocurrency, he seems to be digging for a new, more hidden, and possibly more dangerous “digital swamp”.

Once upon a time, the protagonist of the crypto world was Satoshi Nakamoto, but now, the protagonist is the US president who "no one understands better than me." Trump once asserted that cryptocurrencies are "extremely volatile and unsupported"; now they have transformed, saying that the crypto community is "full of the spirit of the founding era and is exciting."

Behind this dramatic turn is not only a change in personal attitude, but also a reflection of cryptocurrency - this "dragon slaying boy" who once carried subversion and ideals has gradually become a "swamp" and even alienated into a "alchemy stone" that turns stones into gold in the hands of some power players.

We are at a paradoxical node of the times: a technology that claims to "decentralize" and get rid of power control is now connected with the top political power, even deeply tied to. This is not only a betrayal of its original intention, but also an existential crisis beyond the financial level.

The cover article of the latest issue of the Economist magazine, cryptocurrency has become the ultimate "swamp asset". In a sense, is this a victory for the revolution?

Today, we will talk about why the domineering president fell in love with encryption, the reversal, the game of gold power and the crisis behind it.

1. Trump's "crypto feast": a carefully arranged "gilded game"

The climax of the story is the planned dinner on May 22, 2025. A few weeks ago, the Meme meme coin released by Trump himself, $TRUMP, was on the verge of returning to zero and almost became a joke in the currency circle.

However, the president's personal "blessing" is like a shot of a heart-wrenching shot, which instantly gives it a certain "real value". The founding team of $ TRUMP coin launched a "pilgrimage" invitation: the top 220 coin holders can receive the "great" of having dinner with Trump, among which the top 25 major players can participate in VIP receptions and "close contact" with the president.

As soon as the news came out, the currency circle was crazy about it, and a wave of buying was coming. The final list of "lucky people" forms a bizarre image of sentient beings: there are both wealthy crypto celebrities, fanatical MAGA (making America great again), and pure speculators.

One plans to fly from Asia to the United States, hoping to attract investment for his blockchain project that “promotes the next generation of Meme culture”; another Trump supporter from New York, who once threw cryptocurrency to buy Trump-branded watches; there is even a mysterious figure wearing a mask and showing himself as a "network detective" to track stolen digital assets. Blockchain data ruthlessly reveals that foreigners are not uncommon in VIP seats.

This feast that seems to be gathering in celebrities is undoubtedly full of controversy. The U.S. government oversight organizations have condemned it, pointing out that it may violate federal regulations prohibiting officials from accepting gifts. What's more, if a person involved in a foreign government appears during the meal, the dinner may even violate the solemn salary clause of the U.S. Constitution, which strictly prohibits federal officials from accepting any gifts from foreign governments. The former special adviser to the White House moral and government reform of the Obama administration even pointedly commented: "This is a moral nightmare."

With just four months of re-election, his family has promoted the expansion of private business interests at an unprecedented speed and breadth. Meme coin dinner is just the tip of the iceberg. Their layout in the cryptocurrency field is much more than that: a Bitcoin mining company and a project called World Liberty Financial launched by his son are clearly marked by the Trump family.

Some critics pointed out sharply that these behaviors constitute a serious conflict of interest amid the backdrop of Trump's sharp relaxation of regulation of cryptocurrency. A White House spokesperson responded lightly, saying that the King of Understanding has always put the interests of the American people first, and that the Meme currency dinner is a "private business event" and has nothing to do with the White House official. If you can believe this, you can only say that Americans are naive.

It 's not just a dinner party, it's more like a carefully choreographed "gilded game". The transaction fee for the $TRUMP coin, as well as the tokens worth about $10 billion that are allegedly still held by the cronies, illustrates the real winner of the game.

Data from on-chain analysis company Chainalysis shows that although 58 investors made more than US$10 million from this coin, about 764,000 wallets lost money as a result, most of which are probably those retail investors attracted by the myth of "get rich overnight". When the powerful and powerful divide their interests while drinking and chatting, the dreams of countless ordinary investors may become vague.

2. The "swampy" of cryptocurrencies: from "dragon slaying boy" to "the

evil dragon itself"

(I) Broken Utopia: The dislocation of ideals and original intentions

Looking back at the origins of cryptocurrencies, we have heard so many exciting declarations. Bitcoin emerged in 2009, and a movement full of utopian colors shining with anti-authoritarianism followed. Early cryptocurrency believers had lofty and even great goals: they were eager to completely overturn the existing financial system and protect personal property from inflation and unjust requisitions. They dream of taking power back from large financial institutions and handing it over to every ordinary investor.

In their eyes, cryptocurrency is not just an asset, but also a liberating technology, a tool that can bring about a fairer and more transparent world. Crypto evangelist Andreas Antonopoulos once passionately declared: "Bitcoin is subversion. The impact it brings is so great that most people can still imagine... a complete subversion. A completely decentralized currency without borders... Bitcoin was born for the world's six billion unbanked population."

The crypto world at that time was filled with an idealism of "technical home". It attempts to play multiple roles simultaneously: a store of value tool, a high-return investment product, a financial technology that allows people to transfer money peer-to-peer without going through government and bank control channels. It promises to provide some degree of anonymity and privacy so that people don’t have to feel “Uncle Sam” staring behind their backs all the time. It fundamentally provides an option to break out of the traditional system, as early supporters were filled with extreme distrust of the existing financial system.

However, more than ten years have passed, but reality is gradually drifting away from the original ideal. It is obvious that the ideal of cryptocurrency is constantly "shrinking". Unless you are the kind of loyal crypto believer, you probably no longer think that cryptocurrencies can replace the global financial system, end the dominance of the US dollar, the euro, and the yen, or make the banking system completely disappear.

(II) The reality of mud and sand: the birth of "swamp assets"

Today's cryptocurrencies often present a different picture. It has become a highly speculative tool. People buy and hold, expect it to rise; or short, expect it to fall; or invest in certain crypto companies, hoping it to outperform the market.

There are also many critics that it plays a fundamental role in black market trading and is widely used in illegal activities such as human trafficking, drug trading, terrorist financing. Many crypto activities are chosen to be conducted in jurisdictions outside the United States because the companies involved are unwilling or unable to comply with U.S. securities and banking regulations.

"Swamp Assets" - a concept proposed by The Economist, accurately summarizes the current embarrassing situation of cryptocurrencies. An industry that once dreamed of "staying away from politics" has now become synonymous with "using power for personal gain", and has developed a "dirty relationship" with the US government administration far exceeds Wall Street or any other industry. This is undoubtedly a huge irony.

Cryptocurrency industry giants are investing hundreds of millions of dollars in political lobbying to uphold lawmakers who are friendly to them and ruthlessly crack down on opponents who are trying to regulate them. The president’s sons are selling their crypto projects around the world, while the president himself uses the form of a crypto dinner to exchange interests with the biggest investors.

The cryptocurrency held by the first American family is now worth billions of dollars, which may even become the family's largest single source of wealth.

This trend of "swamping" is in sharp contrast with other major economies in the world.

In recent years, countries and regions such as the EU, Japan, Singapore, Switzerland and the UAE have successfully provided new regulatory clarity for digital assets without similar rampant conflicts of interest. In developing countries where government requisitions are common, inflation is high, and currency depreciation risks are real, cryptocurrencies still play the role expected by early idealists to some extent.

Ironically, it all happened against the backdrop of the growing maturity of underlying technologies in digital assets. Speculation is still prevalent, but mainstream financial companies and tech giants are also starting to take cryptocurrencies more seriously. The "tokenization" process of real-world assets is accelerating, and traditional financial institutions such as BlackRock and Franklin Templeton have also become large issuers of tokenized money market funds. Applications in the payment field have also shown great potential, with companies such as Mastercard and Stripe embracing stablecoins.

However, in the United States, a country that should have led innovation, the cryptocurrency industry seems to have chosen a shortcut to dance with power. They argued that during the Biden administration, they had no choice but to "fight by any means" due to SEC Chairman Gary Gensler's tough stance and frequent law enforcement actions. Banks are afraid of regulatory pressures and dare not provide services to cryptocurrency companies, nor are they willing to easily enter the field.

This statement has some truth to it. It is indeed inefficient and unfair to clarify the legal status of cryptocurrencies through the court rather than Congress. But now, with Trump coming to power, the pendulum of regulation seems to be swaying violently to the other extreme, with most cases against cryptocurrency companies being dropped. Is this the industry's victory or the foundation for a bigger crisis?

3. Why did Trump fall in love with encryption: sugar-coated shells or

Pandora's box?

Trump's 180-degree turn towards cryptocurrencies is one of the most eye-catching phenomena in the American political arena in recent years. From the past "I don't like Bitcoin and other cryptocurrencies, they are not currencies, with extremely fluctuating values ​​and no substantial basis", to the current claim to make the United States a "global crypto capital" and an "undisputed Bitcoin superpower", is behind this a well-thought-out policy shift, or a carefully calculated political and commercial marriage?

(1) Under the "sugar coat": Why does Trump embrace encryption?

Trump’s “crypto preference” is by no means groundless, and its driving force behind it is complex and direct:

1. Naked economic interests: This is the most direct and unconcealed motivation. Trump and his family members have deeply intervened in the investment and operation of cryptocurrencies. Whether it is the $TRUMP meme coins that allowed him and his partners to make a fortune, the Bitcoin mining company that his two sons invested in, and World Liberty Financial, which they hold a majority stake, they all point to the growth of personal wealth. The president and his family are making direct profits from this emerging industry.

2. Realistic political considerations: The crypto community is described by Trump as "full of the founding spirit, exciting." Behind this is the covetousness of this group's political energy. Advocates of cryptocurrencies are usually young, passionate, and have some financial strength. Fighting for their votes and campaign donations is extremely tempting for any politician. Trump promised to introduce legislation that favors cryptocurrency and portrayed the Biden administration as the "executioner" who killed emerging industries, in order to cater to this group's demands.

3. Consistent anti-regulatory stance: One of the core policies of the Trump administration is to deregulate. The cryptocurrency industry’s challenges to the existing financial regulatory system and its desire for a more relaxed environment coincide with Trump’s governance philosophy. Liberating cryptocurrencies from the “shackles” of institutions such as the SEC is in line with his overall strategy to weaken the power of regulators.

4. Self-reinforcement of the image of "subversive": the anti-establishment and traditional colors that cryptocurrency itself also conforms to the image of "outsider" and "subversive" that Trump has been trying to shape. Embracing this field, which is regarded as an "outlier" by the mainstream financial community, may further consolidate its appeal among specific voter groups.

(II) "Canda shells" and "magic box": potential huge risks

However, under the sugar coat wrapped in Trump's "crypto preference", there may be "bombs" that are enough to blow up the entire financial system, or the "Pandora's box" that releases countless disasters. The risks are multidimensional and deep:

1. Systemic risks of the financial system :

Volatility Contagion: The essence of cryptocurrencies' "extreme volatility, narrative support" has not changed. In the absence of supervision, if you allow deep integration into the mainstream financial system, its inherent instability may be transmitted to traditional financial markets through various channels, causing systemic crises. Some insiders have warned that Bitcoin could become today’s credit default swaps (CDS) or secondary mortgage securities (MBS) — the complex and underregulated financial instruments that triggered the 2008 financial crisis.

Rising regulatory arbitrage: Financial institutions are born with the impulse to evade supervision. If the crypto field becomes a new "outlaw", Wall Street companies are likely to use this wave of "crypto-friendly policies" to "reshape" their own businesses into crypto businesses, thereby bypassing the existing regulatory framework designed to protect financial stability.

The absurdity and danger of "strategic Bitcoin reserves": The Trump administration proposed to establish the so-called "strategic Bitcoin reserves" and plans to use up to $100 billion in public funds to purchase cryptocurrencies such as Bitcoin and Ethereum, which was even denounced by experts as "meaningless and even stupid ideas."

Unlike oil or drug reserves with actual strategic value, Bitcoin reserves have almost no strategic significance except for delivering huge benefits to the crypto industry. This is actually putting taxpayers’ money into highly speculative assets, with the risk being completely socialized.

The 2008 crisis repeats itself: Once these risks break out, their impact will far exceed that of "money speculators", but will affect all ordinary Americans who have mortgages, retirement accounts, or want to start a business through loans. Because the entire financial system is based on "trust", when opaque risks are quietly implanted and supervision is deliberately weakened, it is only a matter of time before trust collapses. What's even more terrifying is that "firewalls" such as the Dodd-Frank Act, which were introduced to respond to the crisis, are now being gradually demolished by the Trump administration.

2. Risk of ordinary investors: Just out of the fire pit, but then into the swamp

Frauds are rampant, and they lose all their money: the cryptocurrency field is full of various frauds and Ponzi schemes. Many companies emerge overnight, using their splashy promises to target those who don’t know much about finance and technology. Once cheated, the losses are almost irreversible due to the anonymity and irresponse of cryptocurrencies.

Compared with the risk warnings and anti-fraud mechanisms that are layered in the traditional banking system, the cryptocurrency world is like a "dark jungle". Elderly people, veterans, startup business owners, and even those who just look for partners on dating software can become victims of scams, with losses of up to tens of billions of dollars.

The illusion of "democratization" and the sad song of retail investors: Events like the $TRUMP dinner seem to provide ordinary people with the opportunity to access top power on the surface, behind them are often the gains of a few insiders and the losses of a large number of retail investors. This is especially true for Meme's fanaticism, which has made most latecomers become "takers".

3. National corruption and crisis:

Trump once used Drain the Swamp as one of his core campaign commitments, meaning to clear away political corruption and special interest groups in Washington. However, on the issue of cryptocurrency, he seems to be digging for a new, more hidden, and possibly more dangerous “digital swamp”.

This "unicorn" that once carried the ideals of liberalism is alienated into a "swamp beast" entrenched in the center of power.

Unprecedented conflicts of interest: The president and his family directly gain huge economic benefits from an industry they are actively promoting deregulation, a naked conflict of interest, in the extent and scope of the modern American political history. This is no longer just a problem of "opening a Trump hotel next to the White House", but a "large-sized corrupt version" that privatizes state public services, which even reminds people of the "Banana Republic"-style governance disability.

The institutionalization of the "bribery channel": $TRUMP dinner and equity negotiations with certain crypto giants with criminal records are essentially priced to clearly mark political influence, providing interest groups with a channel to "buy" the core of power. This seriously erodes political integrity and decision-making fairness.

A hotbed of terrorist financing and cyber theft: cryptosystems have become an ideal tool for national hacker organizations (such as North Korea's "Lazarus Group") and terrorist organizations to carry out fund theft and terrorist financing due to their anonymity and convenience of cross-border mobility.

Conclusion: Reflection of the "I, I, Meme" era

"Me, me, Me me ( Me, me )" - This pun that imitates "Me, me, me" accurately captures the selfish nature of the current combination of cryptocurrency and political power.

A technology that once claimed to empower the public now seems to be more keen on serving the powerful and powerful. Cryptocurrencies have gained an unprecedented role on the policy-making table, but their reputation and destiny are closely linked to the ups and downs of their political benefactors.

Trump's "preference" for cryptocurrencies may bring huge economic benefits to him and his family in the short term, and it can also gain a loose regulatory environment for the crypto industry. But as the Economist warns, the benefits of this deal may end up being only one-way. When the political winds change, or when risks accumulate to a critical point and eventually break out, the once "honeymoon" may instantly turn into a "nightmare".

The technology of cryptocurrency itself is not the original sin, and it still shows positive innovation potential in areas such as payments and asset tokenization. But when this potential is kidnapped by political speculation and bottomless pursuit of interests, when "innovation" becomes the guise of "rental seeking", it can bring disastrous consequences.

What people need is financial innovation that can truly benefit the public and promote social progress, rather than a "swamp carnival" that ultimately pays for ordinary people.