El Salvador's crypto experiment ends in failure

And we in the US about to embark on a similar crypto adventure with the EO for the Strategic Bitcoin Reserve [0].

This is what happens when top leadership at A16Z like Marc Andressen [1], Ben Horowitz [1], Scott Kupor [2] (first VC at A16Z and now head of OPM - the agency that gives DOGE it's teeth), and Brian Quintenz [3] (head of policy (ie. Lobbying) at A16Z as Head of the CFTC) become major backers of the current administration.

A16Z has been lobbying for deregulating the Crypto industry and defanging the CFPB for half a decade now [4][5] as they have $4.5B dedicated in crypto investments alone [6], which were largely underwater [7]

People keep talking about the Dark Enlightenment Tech Bro schpeil, and while significant, is basically a bunch of blowhards. The primary reasons you saw significant VC support for the Trump administration are

1. the proposed tax on unrealized capital gains tax for those with a net worth above $100M (heavily hits VCs like A16Z, Founders Fund, and YC)

2. the SPAC crackdown (shut down a major venue to unlock capital from zombie investments)

3. Crypto deregulation (as explained above)

[0] - https://www.reuters.com/technology/trump-signs-order-establi...

[1] - https://techcrunch.com/2024/07/16/andreessen-horowitz-co-fou...

[2] - https://www.whitehouse.gov/presidential-actions/2025/01/sub-...

[3] - https://www.reuters.com/world/us/trump-plans-pick-brian-quin...

[4] - https://www.nytimes.com/2021/10/29/us/politics/andreessen-ho...

[5] - https://www.forbes.com/sites/davidjeans/2022/10/17/andreesse...

[6] - https://www.axios.com/2022/05/25/andreessen-horowitz-raises-...

[7] - https://www.wsj.com/articles/andreessen-horowitz-went-all-in...

That’s just grift to transfer wealth from the taxpayer to the Don’s favoured henchmen.

Worth noting that adopting a currency as legal tender and keeping reserves of that currency are two different things. El Salvador has abandoned the former, your government wants to do the latter.

Other way around.

Trump had no shot until the proposed tax changes in early 2023 and competition with Sequoia lead much of A16Z's leadership (and other VCs) to invest in Trump's campaign.

Before that, A16Z, other VCs, and tech leadership tended to donate equally to both parties.

As I've mentioned multiple times before, Dem leadership screwed the pooch by alienating tech leadership who coalesced around Obama while overinvesting in failed outreach to legacy unions like the UAW and ILU.

Musk has always been an unsavory character, but he only really flipped to Trump after the Biden admin alienated him to try and get UAW support [0] - and now the UAW who Biden and the Dems tried to poach are now fully behind Trump and the GOP [1]

[0] - https://www.wsj.com/politics/elections/how-elon-musk-broke-w...

[1] - https://www.axios.com/2025/03/04/uaw-trump-tariffs-united-au...

It's de facto the former as Crypto-first payments are increasingly accepted in the US AND the admin is considering giving crypto tax-free status exempt from capital gains.

With the recent surge in memecoins support, I'm really curious how the SEC and the crypto industry can coexist moving forward.

Crypto Regulation largely falls under the CFTC (now headed by A16Z's head of lobbying) and CFPB (now disbanded by Kupor's OPM).

SEC manages regulations such as SPACs, public listings, and publicly traded securities - another thing A16Z has been lobbying to deregulate, but not directly related to crypto.

It was FTX and Coinbase that paved the way, but it's A16Z that's taking full advantage.

Okay, but still, for the average person, the recent support for memecoins seems like a complete contradiction to the basic principles of consumer and investor protections.

Crypto is legally a commodity due to 2022-23 era lobbying, not a security. As such, it falls to the CFTC to regulate it, not the SEC.

The CFTC has been defanged in both administrations, but it was Sequoia and Dustin Moskovitz backing the last admin via FTX and A16Z backing the current admin.

It's hard not to see the "crypto reserve" as a step towards "you can pay your taxes in crypto". Which isn't quite the same as legal tender but it's infinitesimally close.