Original author: Jack, BlockBeats

The liberal paradise is turning right.

As if overnight, Silicon Valley public opinion began to turn to the Trump camp, and after Harris became the Democratic Party's pre-selected presidential candidate, Silicon Valley became more divided. Public support for Trump was once a taboo in Silicon Valley, but now this blue fortress is shaken by frustration with Biden and the Democratic government.

In the past two years, Silicon Valley's technology giants have begun to participate in politics in a more high-profile way. Just like "software eats the world", these kingmakers are changing the power structure in Washington through capital and influence.

The Great Contrarian and His Super-Trumpism

At the 2016 Vanity Fair New Establishment Summit, Amazon CEO Jeff Bezos was asked what he thought of Peter Thiel's support for Trump. He replied: "You have to remember that Peter Thiel is a contrarian, and contrarians are often wrong." He then said that if it were him, he would not ask Peter Thiel to leave the Amazon board of directors.

Even in Silicon Valley, where many heroes gather, Peter Thiel is a unique existence. His alliance with Zuckerberg is known as one of the most powerful partnerships in the history of Silicon Valley, and the influence of the "Paypal Mafia" has penetrated every corner of the technology industry. However, in the summer of 2016, Thiel fell into the dilemma of "to-be-or-not-to-be". Because of his public and high-profile support for Trump, he offended most of Silicon Valley. In the following four years, his relationship with the Facebook board of directors gradually deteriorated, and he finally left the social networking company in May 2022.

But this is not the end of Thiel. After leaving Facebook, he began to pursue another more hidden and radical power, and as an emerging political force, he expanded his influence from Silicon Valley all the way to Washington. With a series of efforts, he pushed his disciple J.D. Vance to the center of the political stage and became the main promoter of Silicon Valley's "right turn behind the scenes."

「The Contrarian」

In Silicon Valley, Peter Thiel has a more famous nickname - The Contrarian. He almost always has the opposite or at least different opinions from everyone else, and then seizes the opportunity of huge returns in this non-consensus. In addition to founding Paypal, he is also the first external investor in Facebook, the godfather of Bitcoin in Silicon Valley, and one of the first people to invest in companies such as Tesla, SpaceX and Airbnb. These investment targets were often not understood or favored in the early days, but Peter Thiel always appeared in front of them at the first time.

The secret of Peter Thiel's success is not simply "going against the trend". A philosophical thinking throughout his life is: people today no longer have real opinions.

While studying at Stanford, Thiel was angry and frustrated by the many crazy behaviors on campus in pursuit of diversity culture, so he co-wrote a 250-page long treatise "The Diversity Myth: Multiculturalism and the Politics of Intolerance at Stanford" with his friend David O. Sacks. In the book, Thiel criticized Stanford's false diversity culture for diverting students' attention from truly important issues and conveying some dangerous ideas to society through them. He accused the campus culture of seemingly diverse, but in fact everyone's ideas are the same.

Peter Thiel in his youth, source from New York Magazine

In Thiel's view, this is the root cause of the bubble in American society, so when people believe in something without reservation, they should stay away from it as soon as possible. Based on this theory, Thiel sold Paypal on the eve of the bursting of the Internet bubble, and then successfully avoided the 2008 subprime mortgage crisis. Now, he tells people that popular technology trends are overestimated, and entrepreneurs are better off thinking in reverse and staying away from trendy words such as big data and cloud computing, because "fashionable" often means that many people are already doing the same thing.

In venture capital, Thiel opposes the lean entrepreneurial thinking of "small steps and fast running + idea verification", but advocates foreseeing the future through long-term thinking, because in this way you don't have to go through trial and error, and the conclusion you come up with after careful thinking is the trend. He claims that 75% of the value of technology companies invested by Founder's Fund will come from cash flow generated 10 years later.

In 2016, Peter Thiel once again found a rare opportunity against the trend.

For many years, Peter Thiel has been acting as a bridge between Silicon Valley and conservatives. At that time, left-leaning liberals were still the mainstream in Silicon Valley, and the employees of most technology companies were supporters and donors of the Democratic Party. Thiel found that many Silicon Valley practitioners were seriously offended by Trump's MAGA slogan. They felt that "Make America Great Again" was Trump's denial of Silicon Valley's contribution to promoting the development of American society, and Thiel was attracted by this pessimism.

For many years, Thiel has always preferred more pessimistic presidential candidates. He hates and even despises the optimism of traditional politicians, believing that they, like Reagan, portray the United States as a shining city, and "if you are too optimistic, it only shows that you are out of touch with reality." Thiel believes that the era when great people accomplished great things in the government is gone, and the current federal agency is an "aging center-left regime" that is bound by rules and stifles innovation.

In contrast, Trump's America is a fragmented landscape. In Thiel's view, MAGA is the most pessimistic campaign slogan in the United States in a hundred years, because it admits that the United States is no longer a great country, which is completely shocking for a presidential candidate. At that time, Washington was afraid to avoid this "outsider" in politics, but Peter Thiel chose to donate $1.25 million to him and speak at the 2016 Republican National Convention to show his support.

Peter Thiel speaking at the 2016 Republican Convention, source: Quartz

The move put Thiel at odds with Facebook's Democratic board members and liberal employeeson a collision course, with some executives believing that Thiel's political behavior had crossed the line. After the convention, Thiel received an email from board member and Netflix CEO Reed Hastings, calling Thiel's decision a "catastrophic misjudgment."

But in Thiel's view, supporting Trump was almost the "least contrarian" choice he had ever made, after all, it was "approved by half the country." Since then, Thiel has become increasingly alienated from Silicon Valley, and in 2018, he moved both his home and investment company to Los Angeles. It turns out that this great contrarian's judgment on "Trumpism" was extremely prescient, and his bet on Trump has also brought him huge political returns, although this return is not quite what he originally imagined.

Trumpism Beyond Trump

In a media interview last November, Peter Thiel publicly expressed his "buyer's remorse" for the former Trump administration and admitted that supporting Trump was a bad bet. Thiel told The Atlantic that he had imagined that the Trump administration would conduct a "national reckoning" after being elected, and cut regulations and smash the administrative state before rebuilding the country, "but this is crazier and more dangerous than I thought. They (the Trump administration) can't make the most basic government departments work, which is even worse than my low expectations."

Peter Thiel has a special liking for "outsiders". In his cognition, troublemakers and subverters are almost always outsiders, which is also the main reason why Thiel is interested in Trump. However, soon after Trump took office, he realized that this government was not as radical as he expected.

During the 2016-2017 transition period, Peter Thiel had an office in Trump Tower, where he presented Trump with a list of more than 50 cabinet nominees for senior government positions. The purpose of the list was to "disrupt the administrative state", and many of the nominees were either extreme liberals or outright reactionaries, making the list too radical even for the Trump administration.

One example was the position of chief science adviser, where Thiel recommended William Happer, a well-known American climate skeptic who once compared the demonization of fossil fuels to Hitler's treatment of the Jews. In the end, with the exception of his protégé Michael Kratsios, who was named chief technology officer, few of Thiel’s other candidates found jobs in the Trump administration. Not long after, Thiel’s close ally, Steve Bannon (former White House chief strategist), was also kicked out of the White House.

According to Puck, Thiel’s relationship with Trump has been exaggerated by the media and Silicon Valley onlookers, but the fact is that Thiel was not in Trump’s inner circle of business leaders at the time. Thiel has established a good relationship with Trump’s son-in-law Jared Kushner, but he is far less connected to Trump himself than old money forces like longtime Trump allies Tom Barrack or Robert Wood Johnson IV.

So when Trump ran for reelection in 2020, Peter Thiel chose to sit out.

Peter Thiel leaves Trump Tower, source: POLITICO

However, Thiel has not given up on the ideology behind Trump, namely "Trumpism." This anti-establishment idea of social reconstruction through radical subversion is what Thiel believes in, and he is willing to find a way forward and a reliable successor for this ideology, with or without Trump's participation.

The good news is that Thiel's profile in conservative circles has greatly improved in the years since Trump entered the White House, and the death of Sheldon Gary Adelson, a major Republican donor in early 2021, and the arrest of Tom Barrack in the summer of the same year, have further left a vacuum for Thiel to expand his influence within the party.

Throughout 2021 and 2022, Republican politicians clamored to visit Peter Thiel’s home, or at least talk on the phone, according to The New York Times. Republicans saw an obvious way out: Thiel could offer a “bailout” to struggling candidates, giving them enough money to fight off Democratic attacks.

According to Puck, Senate Republican leader Mitch McConnell repeatedly asked Peter Thiel to come out to rescue J.D. Vance and Blake Masters from their disastrous performances in Ohio and Arizona during the 2022 midterm elections, but Thiel always refused. This confused McConnell, who didn't understand why Thiel would spend about $20 million on the two in the primary stage, but abandon his investment in the final election.

Face McConnell, Thiel has his own reasons for taking a tough approach. In early 2022, he and Rebekah Mercer (heir to the Mercer family) and others formed a covert conservative donor alliance called Rockbridge, aiming to "undermine and advance the Republican agenda" and trying to reshape the American right outside the party machine. As the godfather of venture capital, Peter Thiel certainly wants to win, but his goal is not to win another Republican seat, but to seek subversion. He hopes to push the Republican Party further to the right and eliminate establishment moderates. Either go bankrupt or redefine the industry, this is Thiel's investment philosophy.

After learning the lessons of 2016, Peter Thiel's political strategy has changed significantly. He began to treat candidates like startup founders, and put up large sums of money to support potential candidates in the early stages. It is reported that Thiel donated more than $20 million in the midterm elections, supporting 16 Republican candidates. As the godfather of Silicon Valley, Thiel replicated the Paypal mafia rules in Washington. He took in disciples and emphasized loyalty. In the expectation that the Republican Party would win more seats in Congress, Thiel began to focus on inserting loyalists in the party.

In the 2022 mid-term elections, Peter Thiel's two loyal disciples are Masters and Vance. The former is an executive of Thiel's family office and co-authored Silicon Valley's "Startup Bible" "Zero To One" with Thiel. The latter is the author of the best-selling book "Hillbilly Elegy" and a former employee of Peter Thiel's Mithril Capital.

In early 2022, The Washington Post Magazine reported in detail Vance's development from a well-known writer to an extreme right-wing politician in a feature article titled "J.D. Vance's Radicalization Road". From listening to Peter Thiel's "Life-Influencing" speech at Yale, to working for Thiel's Mithril Capital in 2017, to founding Narya Capital with Thiel's funding three years later, Thiel played an influential role in almost every step of Vance's development.

Washington Post Special on J.D. Vance

At the last minute of the campaign, Vance won Trump’s endorsement with the help of Thiel and won the Ohio race with a new $1.5 million infusion from Thiel. By investing “emergency political funds” in inexperienced right-wing protégés like Vance and Masters, Thiel ensured that they would be absolutely loyal to him rather than McConnell, and in a sense, they were extensions of Thiel’s ideology. One example is Facebook. After Thiel's Palantir was investigated by Facebook in 2018 due to the Cambridge Analytica incident, Vance's attack on Facebook was also partly Thiel's effort to push Zuckerberg to the right from the outside. Unlike Musk's high-profile image on Twitter, Peter Thiel is a behind-the-scenes operator. He was once a top ten chess player in the United States, and now he is even more adept at using his influence to deploy political pawns to achieve his goals. Many people underestimated Thiel's will and skills. As a descendant of German descent, his thoughts have a distinct German-Prussian color, cold, iron-blooded and even extreme. Thiel's influence does not only come from money. His decade-long brutal revenge on Gawk News is a serious warning he conveyed to every enemy. In Silicon Valley, no one dares to say that they are not afraid of Peter Thiel. Now, he wants to use this iron-blooded power to change the United States again, even if it means losing his lifelong friend.

In 2022, the Washington Post pointed out in a report that Thiel and Musk heralded the rise of a new generation of tech tycoons, whose strong financial resources and unique ideology are shifting from building companies to reshaping a new generation of right-wing political leaders in the United States and completely changing the Republican Party and Silicon Valley. Two years later, Thiel was "very happy" that Vance became the nominated vice president. Just as people say that Trump has completely changed the Republican Party, Thiel believes that he has reshaped Trumpism. Perhaps in his view, the end point beyond Trumpism is Thielism.

Lord of the Rings addict

Peter Thiel has always loved fantasy parallel worlds. He has read a lot of science fiction and fantasy novels since he was a child, but only "The Lord of the Rings" made him read it no less than 10 times (this is a three-volume masterpiece). Thiel is obsessed with Tolkien's Middle-earth. You could even say that he lives in his own fantasy world: both Palantir, which he founded in 2003, and Narya Capital, which he helped Vance establish in 2020, are named after the novel "The Lord of the Rings."

Vivek Ramaswamy, former CEO of biotech company Roivant Sciences (who founded an anti-ESG investment firm with Thiel's support), once told the media that Peter Thiel believed deeply in the huge opportunities of creating a parallel economy. He believed that serving Americans who were dissatisfied with today's American companies would become the backbone of the next generation of large companies, and few people were seriously pursuing this opportunity.

In Thiel's eyes, these parallel economies are no different from Tolkien's Middle-earth: Middle-earth is an arena for the struggle for ultimate power, where there is no government and extraordinary people rise up one after another to realize their destiny. In addition, there are immortal elves who live in valleys protected by magical powers, away from humans.

Peter Thiel is like a power contender in Middle-earth, eager to get the Supreme Ring that rules the world.

After the 911 incident, the United States comprehensively strengthened security measures, and airport security began to become cumbersome. Thiel believed that it was absurd that the efficiency of the whole society was reduced because of just one terrorist, so he hoped to use PayPal's technology to identify online fraud and locate criminals in advance on the Internet, so he founded the data mining company Palantir. The name and logo of this company are inspired by the "crystal ball of truth" in the hands of the evil wizard Rudolph, which can observe and communicate people and things in any corner of the world.

The image of the crystal ball in the movie "The Lord of the Rings", and the Palantir logo

In its early stages, Palantir received support from CIA investment firm In-Q-Tel, but later lost out to large rivals such as Amazon and Google. But Trump's inauguration turned the situation around for Palantir, and they began to win a large number of government contracts. Thanks to his investment during the campaign, Thiel was able to lobby for his products in the US military. He once again applied PayPal's development model to expand Palantir's customers to governments and secret service organizations around the world.

In a recent speech at Cambridge University, many audience members protested one after another, accusing Palantir of playing the evil role of an Israeli military data contractor in the current Israeli-Palestinian war, and accused Peter Thiel of having "blood on his hands". Thiel responded: "I have a theory that we are always entangled in the justice and evil of technology, but most technology is actually useless. In this sense, useless technology is "bad". Today, some people complain about Palantir, which at least shows that Palantir's technology is really useful. In a world where most technology is useless and false, even if you are evil, you are not useless. In a completely incompetent world, you are even "good"."

Peter Thiel's recent speech at Cambridge University was interrupted by protests

Thiel has never minded being seen as a villain. When he supported Trump in 2016, he said: "Silicon Valley wants a villain, and the Republican Party wants a hero." Obviously, he feels that this role suits him very well. When talking about The Lord of the Rings, he believed that the essence of elves is immortal humans, and then asked, "Why can't we be elves?" In the pursuit of immortality, Thiel is often called a vampire by public opinion. Peter Thiel believes that behind every successful company there is a "secret that is right in front of us but no one realizes it." He pursues "non-consensus", subversion and development. He believes that the United States today is stuck in innovation stagnation, and attributes the root cause of the problem to the pursuit of diversity in American society over the past few decades. He said: "We wanted flying cars, but we got 140 characters."

However, Thiel is not a visionary like Jobs, and he cannot give a clear direction for future development.

Many people who know Peter Thiel will say that he himself does not know what he wants. Putting aside his philosophical thoughts, Thiel is indeed a super contradiction: he is a homosexual, but he founded a right-wing newspaper while at Stanford to criticize multiculturalism and feminism; he advocates the company's monopoly model and monarchy in "Zero to One", but publicly opposes the monopoly of large technology companies; he advocates technological liberalism, but believes that democracy and freedom are incompatible.

Peter Thiel is more like an igniter. He will try his best to change the development trajectory of a person, a company or even a society, but he will not be responsible for the consequences of where the ship turns. Before Silicon Valley Bank fell into crisis, Founder's Fund was the first institution to withdraw. In New Zealand, where the movie "Lord of the Rings" was filmed, Thiel spent millions of dollars to buy a 500-mile estate. In a 2016 interview, OpenAI CEO Sam Altman revealed that if a global disaster occurred, he and Thiel would fly here to take refuge. Yes, if Peter Thiel really sets the world on fire, you may have nowhere to go, and he has already prepared a way out.

Woke, the rich tax, Lina Khan, the "Biden totalitarianism" that made Silicon Valley turn against the party

In September 2021, the Washington Times published an article titled "The overreach of Democratic totalitarianism is threatening the livelihoods of Americans", accusing the radical Democrats of deliberately suppressing the voices of minorities in public opinion, and forcing school policies under the guise of science, weakening parental rights, and ignoring the harm caused to young children by masks and gender identity education.

The term totalitarianism comes from the Western description of the similarities between Nazi Germany, fascist countries, and the Soviet Union during the Cold War. Totalitarians suppressed opposition parties and controlled the public and private lives of citizens through state propaganda machines and mass media. In the early days of Biden's presidency, this term only occasionally appeared in conservative media such as the Washington Times and some far-right forums, believing that political correctness, content censorship and big government are the "new totalitarianism" in the United States.

But in a podcast updated last week, Ben Horrowitz, the founding partner of A16Z, also began to use the term "totalitarian" to describe Biden's Democratic government. He believes that there has been an extreme left force in the Democratic Party in the past four years. Under Biden's appointment, it has seized the vacuum of regulatory power and fiercely exerted hostility on Silicon Valley and its invested startups. This caused A16Z, a former supporter of the Democratic Party, to side with Trump in this election.

At the Axios Technology Conference at the beginning of the year, Peter Thiel’s friend and founder of Craft Ventures David Sacks also said that he “has more disagreements with Biden than with Trump”, and soon invited Trump to participate in the well-known podcast "All In Podcast" co-hosted by him.

Peter Thiel’s personal influence is certainly important, but Silicon Valley has never lacked kingmakers. Behind these powerful individuals’ successive defections is the efficiency wear and tear of Silicon Valley under the influence of Woke culture, and the huge conflict between Biden’s big government policy and the rich economy.

“No, Mr. President, they are not your children”

“My son is dead,” Elon Musk said in a live interview this week. “He was killed by the Woke-Mind virus (referring to Dead Naming)”. In the interview, Musk talked openly about the fact that his eldest son was transgender. During the epidemic, Musk’s eldest son Xavier suffered from gender dysphoria. In the end, Musk signed the documents for his son’s sex reassignment surgery under the condition of incomplete information and concerns that Xavier might commit suicide. Later, Musk blamed the education of gender identity in American schools.

A year ago, the White House official X account released a voice video, in which Biden said: "These (LGBTQ+ minors) are our children, our neighbors, not other people's children." The next day, Musk replied: "You are the government. They are not your children." The voice in the video came from the Biden administration's remarks at the "White House Pride Month" event held that month. During the event, transgender model Rose Montoya's topless behavior in the White House triggered a public opinion storm in major media.

"White House Pride Month" on-site photos and official tweets

In the past two years, whether gender identity should be taught in elementary and middle schools, and whether schools have an obligation to notify parents when students want to change their gender identity, has become one of the most controversial topics in American society.

During the 2022 midterm elections, Virginia Democratic gubernatorial candidate Terry McAuliffe threatened that parents should not be involved in K-12 public education, saying that he "would not let parents into schools, and parents should not tell schools what they should teach." Conservatives frequently legislate in opposition. In March, Florida Governor Ron DeSantis signed a parental education rights law that prohibits public schools in the state from teaching about gender identity in kindergarten to third grade, and allows parents to decide when to teach their children about such topics.

And polling data shows that most Americans, regardless of political affiliation, support the bill of rights. In multiple federal court lawsuits, Florida parents have accused schools of following "gender support" plans that allow students to choose pronouns or different gender identities without parental consent and help students deceive parents or refuse to comply with their wishes.

In April of the same year, Biden said at the annual teachers' event: "They are not someone else's children. When they are in the classroom, they are like your children." Then at the teachers' event the following year, he reiterated: "There is no concept of 'other people's children'. The children of our country are all our children." Biden's remarks were seen as an attack on conservatives and the opposition movement by students' parents, with right-wing media criticizing him for "replacing the parent-child bond with loyalty to the 'Woke cause' in order to achieve the goal of controlling the younger generation."

Starting with the MeToo movement, "woke culture" began to develop widely in the United States and reached its climax during the Black Life Matters movement. After Biden came to power, Woke culture began to develop to the extreme, and with the help of mainstream media such as CNN and social media platforms such as Twitter, it became a super sensitive topic of public opinion. The subsequent "cancel culture" was even seen as a tool for the extreme left to attack other social groups. During the epidemic, CNN and MSNBC and other media reports on riots in black communities were ridiculed by many American netizens. These reporters stood in front of the fire scene and described it as "a protest that was on fire but mostly peaceful."

Media coverage during the Black Life Matters period

On Wall Street, Woke culture has also caused dissatisfaction among some traditional leftists. In an interview earlier this year, “Little Stock God” Bill Ackman expressed his disappointment with the changes in the Democratic Party over the past few years. “If you say something offensive to others today, you may lose your job directly. You may be ‘canceled’... I am a ‘Clinton-style Democrat,’ and I don’t want to be associated with today’s Democratic Party at all.” That month, New York Magazine published an in-depth article titled "Bill Ackman's War with Harvard, MIT, and D.E.I.", reporting on Bill's "big reckoning" with the MIT president and his wife for using their public office for personal gain through D.E.I.

Under the leadership of the Biden administration, Woke culture has impacted American companies and startups in the form of the D.E.I movement (Diversity, Equity, and Inclusion), and the aversion to D.E.I has gradually become an open secret in Silicon Valley. Many Silicon Valley entrepreneurs and executives believe that the D.E.I program prevents companies from making the best decisions in recruitment and business cooperation, ultimately leading to a decline in corporate profitability. Some technology companies have even tried to abolish the D.E.I recruitment program. Last month, Alexandr Wang, founder of Scale AI, spoke at Xpublished an article, replacing the D.E.I recruitment plan with the concept of M.E.I (Merit, Excellence and Intelligence), winning the support of technology giants such as Musk.

Peter Thiel has always been very high-profile in the "anti-D.E.I cause", and he has publicly stated many times that "D.E.I is Communist". In his speech at Cambridge University this month, Thiel once again quoted his college book "The Diversity Puzzle", pointing out that the D.E.I movement diverts people's attention from important issues such as economic development and technological innovation, resulting in low social efficiency.

According to the Washington Post, Thiel has been looking to change American culture since 2021 and has provided funding for "anti-Woke" causes, including right-wing film festivals and conservative dating apps. Musk called Woke culture the "Woke-Mind virus" and tried to maintain the neutrality of public opinion by acquiring Twitter, an act that Thiel "spiritually supported." Musk was deeply moved by his eldest son's transgender, and he subsequently began to fiercely criticize California's transgender medical policy for minors. The AB-1955 bill signed by California Governor Gavin Newsom is considered to be the direct trigger for Musk's announcement to move the X and SpaceX headquarters out of California.

Big government gamble, tax stick swung at Silicon Valley tycoons

After Biden took office, the U.S. federal government launched a "consumption spree", passing a $1.9 trillion economic rescue plan in his first year in office. The Washington Post wrote in an article titled "Biden is betting on bigger government, and the epidemic is helping him" points out that Biden is becoming an extremely ambitious president, and the federal government is experiencing the largest expansion in half a century.

Due to the economic shutdown and social unrest, millions of Americans have lost their jobs, and public resistance to big government expansion has gradually softened. In a late February poll, the stimulus plan won about 65% of the public support. Biden is trying to quickly advance his big government agenda by using the current public sentiment as an opportunity for major expansion.

After entering the White House, Biden was described by the media as the vehicle for the second attempt at the Great Society program in American history. In the early 1960s, President Johnson's Great Society program was seen as the last attempt at expansion of the federal government, but it eventually triggered a strong opposition movement under the pressure of the Vietnam War. After Reagan took office in the 1980s, his distinctive anti-Washington sentiment laid the political tone for anti-government expansion in the United States for decades to come. However, Biden is betting that the epidemic can help him rewrite the script of history and allow him to achieve what other Democratic presidents have not been able to do.

Biden signs $1.9 trillion stimulus plan, source from CNBC

The following year, the Biden administration launched a $2 trillion large-scale infrastructure plan to support the "Build Back Better" agenda, further expanding the role of state funds in the social economy. In addition to social spending, Biden also significantly increased the defense budget during his term, raising defense spending to $800 billion in early 2023, an increase of 3.2% from the previous fiscal year, which was called one of the largest annual defense budgets in peacetime in U.S. history by the media. At the same time, federal government employees also saw a 5.2% salary increase, the largest salary increase for U.S. civil servants in 43 years since the 9.1% salary increase in 1980.

High spending means high taxes, and the funding source for the $2 trillion massive infrastructure plan cannot rely solely on government debt. Biden decided to take action on American companies and the wealthy class. Corporate taxes are seen as the main source of funding for the White House's infrastructure plan, with tax rates raised from 21% to 28%, federal subsidies for fossil fuel companies being terminated, the global minimum tax hike from 13% to 21%, and multinational corporations being forced to pay US tax rates. This is the first major increase in federal tax rates by the US federal government since 1993, directly reversing the trend of drastic corporate tax cuts promoted by the Trump administration since 2017.

In addition, the wealthy class and investors have also become the targets of increased revenue to fund social priorities in the infrastructure plan. When Biden announced the 2023 budget, he proposed a new tax plan for the wealthy group, imposing a 25% minimum income tax on citizens with a net worth of more than $100 million, including standard taxable taxes and annual gains on the total value of "tradable assets" (including stocks, bonds, mutual funds and other securities). The plan is called the "Billionaire Minimum Income Tax" by the White House, marking the first time that the Biden administration has explicitly called for a wealth tax (Wealth Tax), and is expected to bring $360 billion in revenue to the federal government in the next 10 years.

According to a report released by ProPublica in 2021, Biden's rich tax will cause technology giants such as Bezos and Musk to pay $35 billion to $50 billion in taxes. That year, the news that "Musk will pay a $11 billion tax bill" became a hot topic, which was the highest single tax bill paid by an individual in US history.

After raising the fiscal year 2025 budget to $7.3 trillion, Biden once again proposed a proposal to tax unrealized gains, and plans to tax unrealized gains of trusts, companies and other non-corporate entities that have not had a recognition event in the past 90 years. Due to the complexity of asset valuation and liquidity issues and the huge challenges of specific implementation, this conceptual measure has almost never been used in the past tax framework of the United States. If Biden's proposal is signed into law, the highest marginal rate of long-term earnings and dividends in the United States will be increased to a staggering 44.6%, reaching the highest level in US history.

Under the new rules, the US capital gains tax will reach a record high, source from the US Treasury

Taxing unrealized gains means that when the value of tradable assets such as stocks and bonds held by individuals or companies (with a net worth of more than $100 million) increases, they need to pay a minimum income tax of 25%, even if these assets have not been sold. For the venture capital circle that regards valuation growth as the underlying logic of everything, this is a declaration of war.

Bill Ackman said when talking about the tax plan that the Democratic Party should not implement a tax policy that "will destroy the US economy". "If someone invests in your startup at a valuation of $1 billion and you own 50% of the company, you will immediately incur a tax of $100 million... All American startups will go bankrupt, and no one will be willing to start a business in the United States anymore." In the latest episode of the podcast, the two founding partners of A16Z also expressed the same view.

David Sacks said at a technology conference earlier this year that this tax could stifle the start-up industry's system of offering stock options to founders and employees, and said "this is an important reason for Silicon Valley to seriously consider who it should vote for." The investment community believes that this tax policy will greatly distort the investment behavior of American investors, especially when it comes to small-cap stocks and start-ups. These companies are often engines of economic growth and innovation, but they rely on investors who are willing to take risks for future returns. But when unrealized gains are also included in the tax scope, investors will no longer prefer growth-oriented companies because their valuations tend to fluctuate more than larger and more mature companies.

The unrealized earnings tax faces opposition not only from the wealthy class. A poll data shows that more than two-thirds of American citizens (including 76% of independent voters) reject such tax policies and believe that the federal government should not interfere with private property. Some mainstream media believe that the current severely divided Congress can hardly muster the votes needed to approve this policy.

Regulatory mafia: Hitting big tech and strangling small tech

In 2007, Obama and a group of Silicon Valley CEOs held a private dinner in Woodside, California. During the dinner, Steve Jobs, then CEO of Apple, secretly showed Obama the prototype of the first iPhone. The former Democratic president joked on the spot: "If it were legal, I would buy a boatload of Apple stock. This is going to be a big deal."

Over the past decade, the Silicon Valley technology industry has always had close ties with the Democrats. For example, former Democratic Vice President Al Gore joined the venture capital firm Kleiner Perkins in 2007, and later Apple, Google, and Airbnb Many technology companies, including , have hired a large number of former members of the Obama administration. Obama held a private dinner with Silicon Valley giants such as Jobs, Zuckerberg, and Schmidt in Woodside, California. The picture comes from the New York Times. However, under Biden, the ambiguous relationship between Silicon Valley and the White House has suddenly cooled, and the government's attitude towards big technology has become very tough. Many venture capital practitioners believe that the Democratic Party under the Biden administration has further turned to the left and "demonized" successful entrepreneurial tycoons, leading to a more alienated relationship with the technology industry because "no one likes to be told over and over again that they are evil." In May of this year, Sequoia Capital partner Shaun Maguire publicly accused Biden of "double standards" in his career on X.

To Silicon Valley's disappointment, Biden's pick for Federal Trade Commission (FTC) Chairman Lina Khan has been actively blocking mergers and acquisitions by large companies. After 2022, the start-up industry fell into a downturn, high interest rates caused capital to flee high-risk areas, and the poor environment of the IPO market made mergers and acquisitions one of the few exit opportunities for the venture capital industry. In addition, the hostility of Gary Gensler, Biden's choice as chairman of the Securities and Exchange Commission (SEC), towards cryptocurrency companies has also made many Silicon Valley venture capital forces dissatisfied.

After Biden took office, combating the monopoly of large technology companies has become an important issue. From Apple, Amazon to Google, almost no Silicon Valley giant has been spared. In July 2021, when he signed the Corporate Competition Act, he said that "capitalism without competition is not capitalism", and directly or indirectly appointed Lina Khan, Gary Gensler, and Jonathan Kanter as spearheads.

In Silicon Valley, Lina Khan has become the only super villain that can unite everyone. According to Puck Report, although executives are divided on the factions they support, anger at Lina Khan is a common topic for everyone. In their view, Lina does not need to be aggressive to kill mergers and reduce the competitiveness of American companies.

Lina Khan is a graduate of Yale Law School and the first South Asian descendant to lead the Federal Trade Commission. At only 35 years old, she is also the youngest chairman in the history of the FTC. In 2017, Lina published an article titled "Amazon Antitrust Paradox" in the Yale Law Journal, pointing out that Amazon is a monopoly organization and explaining why she believes that the US regulation of large companies is failing. The article attracted great attention in both academia and politics, and directly pushed Lina Khan to the center of the US commercial antitrust struggle.

After Biden took office, he appointed the young Lina Khan as the chairman of the FTC. In September of the following year, the FTC joined more than a dozen states to sue Amazon, accusing it of engaging in illegal business practices that enabled it to exercise monopoly power. A few months later, the FTC filed a series of lawsuits against Google and Meta, hoping to remove its ownership of Instagram and Whatsapp in the Meta case. In March of this year, the FTC once again launched an attack on big technology, suing Apple for abusing its monopoly over the iPhone. In a subsequent public statement, Apple said that the FTC's lawsuit "threatens who we are" and, if successful, would "set a dangerous precedent that would give the government more say in the design of general-purpose technology."

After being sued by the FTC in 2022, Nvidia abandoned its $40 billion acquisition of chip design company Arm Holdings, which was originally what SoftBank President Masayoshi Son wanted to see most. However, this "antitrust pioneer" has also lost several battles in the war with giants, including preventing Microsoft from acquiring Activision Blizzard and preventing Meta from acquiring virtual reality startup Within.

In any case, aggressive antitrust policy has become one of the defining characteristics of the Biden administration, and Biden and Lina Khan's larger agenda is to recalibrate the federal government's stance on corporate competition in a way not seen in decades. Everyone knows that if Biden is re-elected, regulatory pressure will undoubtedly continue.

FTC Chairman Lina Khan and SEC Chairman Gary Gensler testify at a House hearing, source from CNN

In the cryptocurrency field, where Marc Andreessen's A16Z and Peter Tilde's Founder's Fund have invested heavily, hostility from the SEC has also become a headache. Between 2020 and 2022, the SEC sued Ripple, Coinbase, BlockFi, Kraken and other crypto companies for unregistered securities, and demanded a settlement fee of $30 million to $100 million. In the Binance case, the fee was a staggering $4.3 billion. After FTX collapsed in November 2022, Gensler regarded it as a case of killing the chicken to scare the monkey, and filed multiple charges against SBF, which was called a "witch trial" by the media.

Around 2023, the SEC shifted its regulatory anchor to crypto staking services. In March, it issued a Wells Notice to Coinbase, and in a lawsuit in June, it stated that Coinbase's staking service plan was unregistered and was a security. In the same month, the SEC again sued Ethereum staking protocols Lido and Rocket Pool for this reason. Since the beginning of this year, the SEC's hostility towards cryptocurrencies has become more obvious. From April to May, it sent Wells notices to Uniswap, ConsenSys, and Robinhood, three crypto and crypto-related companies, which was called a "nuclear bombing" of the industry by Ben Horowitz, founding partner of A16Z.

In addition, the Biden administration seems to have blocked the funding channel between banks and crypto companies through an inter-agency coordination plan called "Operation Choke Point 2.0" by the industry.

From December 2022 to January 2023, crypto-friendly banks including Signature, Silvergate, Custodia, and Metropolitan Commercial successively reduced or closed crypto-related businesses, and were rejected by the Federal Reserve for "safety and soundness" to join its federal system. The National Economic Council (NEC) of the United States issued a policy statement strongly advising banks not to trade directly with cryptocurrency assets or maintain exposure to cryptocurrency depositors.

In March, Silicon Valley Bank (SVB) collapsed, implicated several banks in bankruptcy and liquidation, mainly crypto-friendly banks such as Signature and Silvergate. According to Barron's Weekly, about 20% of Signature's deposits come from crypto companies. After the bank goes bankrupt, it will be difficult for crypto companies to find alternative liquidity providers, and the entire industry will face huge difficulties in deposits and withdrawals. Barney Frank, a former member of the Signature Bank board of directors, once publicly stated that Signature was liquidated because the regulator "wanted to convey a very strong anti-crypto message."

Soon after, the SEC issued the SAB121 (Staff Accounting Bulletin No. 121) bill, requiring entities that perform crypto asset custody activities to record asset value fluctuations in their balance sheets. This means that if the price of Bitcoin falls, banks will be responsible for users' losses, forcing banks to stay away from crypto custody business. In April of this year, the anti-SAB121 bill passed the Senate and the House of Representatives with bipartisan efforts, but was ultimately vetoed by Biden.

Gary Gensler testified before the U.S. Senate Committee, source from CNBC

Last February, after the SEC adjusted the regulatory rules on investment advisor protection, A16Z accused in an open letter that the new regulations would prevent RIA (registered investment advisors) from holding and trading crypto assets for clients. Ben Horowitz said in a recent podcast that more than 30 companies invested by A16Z in the past two years have received Wells notices from the SEC. One of the microfinance startups was suddenly sued by the FDIC after the epidemic ended, and was unwilling to disclose the reason to the team and A16Z. "I have never seen this in my career. Startups simply don't have the money to fight the government," Horowitz said in the podcast. From the $2 trillion infrastructure plan to the establishment of 31 state innovation centers to the antitrust competition law, each of Biden's initiatives looks very grand, but in actual interests, it is in serious conflict with the "campaign donors", and in some "private" government actions, it has even forged personal grudges with Silicon Valley giants. At a meeting of corporate leaders at the White House in 2022, Biden did not invite Musk to attend, and called General Motors, which produces 26 electric vehicles a year, "the leader in the new energy field", and has since had a personal grudge with Musk. According to Puck, in April this year, Musk and well-known investors such as Thiel and Sacks hosted an "anti-Biden" dinner in Hollywood, where participants discussed ways to raise funds and oppose the Democratic Party.

Silicon Valley and the Biden administration have been increasingly hostile, and Biden received a noticeably less welcome during his Silicon Valley tour this year. In every way, his big government gamble seems to have failed.

SBF to A16Z, the tide reversal starts with cryptocurrency

Last month, Trump held a fundraising event at the home of David Sachs, a friend of Peter Thiel, in the wealthy district of San Francisco. During the event, Trump branded himself as the "cryptocurrency president", slammed the Democrats' regulatory hostility to the industry, and said he would stop Gensler's crackdown on the crypto industry "within an hour of taking office." At the meeting, Sachs and the Winklevoss brothers (Tyler & Cameron Winklevoss) and others discussed their cryptocurrency investments with Trump, and Trump eventually raised $12 million from the event.

Trump is not a fan of cryptocurrency, at least until 2023. He has always emphasized the threat posed by Bitcoin to the US dollar. In 2019, he tweeted as president that he did not like the "air value" of Bitcoin. After leaving office, he told the media in 2021 that Bitcoin "may be a scam." But at the Bitcoin conference over the weekend, he said that it was no longer Bitcoin that threatened the US dollar, but the central bank. It took only 2 years for Trump to change his political stance from "dollar fighter" to "Bitcoin president."

Now, Trump is fully embracing cryptocurrency and frequently courting this group. In addition to his own campaign team, he has also led most of the Republican Party. At the just-concluded 2024Bitcoin Nashville Conference, in addition to Trump, several Republican senators gave speeches in support of the crypto industry. It is clear that the Republican Party is tying donations and votes from the crypto community to itself by promising a more relaxed regulatory environment.

This strategy has begun to show results. After Trump made his pro-crypto policy public, he immediately received support from A16Z, whose two founding partners said that the SEC and FTC under Trump will usher in new faces. Even SBF, who has a deep blue background, joined in the fun. Earlier this year, SBF, who was still in prison, publicly stated that he might "switch to the Republican Party." In 2022, he embezzled more than $80 million in assets from the FTX platform to donate to the election, becoming the second largest donor to the Democratic Party at the time. When the election dust settled, one-third of the members of Congress received funds related to FTX.

For most of its history, Bitcoin and cryptocurrency were a nonpartisan topic, as neither Republicans nor Democrats understood or cared about this fringe group, but now it is becoming a growing political force, influencing the stances of both parties in the campaign. Many people interpret politicians' overtures to cryptocurrency as a fundraising strategy, and well-known investor Mark Cuban has called it a "a growing political force. href="https://x.com/mcuban/status/1813591281970348264?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1813591281970348264%7Ctwgr%5Eed2e19bfca4e6684e3d1408db57 8d3a015aeb581%7Ctwcon%5Es1_&ref_url=https%3A%2F%2Fwww.coindesk.com%2Fbusiness%2F2024%2F07%2F17%2Fits-a-bitcoin-play-mark-cuban-says-silicon-valleys-embrace-of-trump-revolves-around-crypto%2F" target="">Bitcoin Games".

But for Trump, obtaining campaign funds may be only one side of the coin. He keenly discovered that cryptocurrency is a "wedge issue" between Silicon Valley, the encryption industry, liberal groups and the Democratic Party, which can help him unite the voter base on multiple fronts and open up new campaign situations.

Kingmakers want a “Bitcoin government”

“Andreessen and I are back,” Andreessen founding partner Ben Horowitz wrote in a blog post last December. Between 2014 and 2016, A16Z faded out of Washington’s sight and began what Marc Andreessen called a “spiritual hike” of political reflection. Nearly a decade later, the two decided to end this spiritual journey and return to the world of political fundraising. “We believe that advancing technology is critical to the future of humanity, so for the first time, we will participate in politics by supporting candidates who align with our technical vision and values,” Horowitz wrote.

The content of this blog echoes Mark Anderson's comments two months ago. In October, he published an article titled "The Techno-Optimist Manifesto", criticizing government regulation as the "anti-technology, anti-life" E.S.G. and D.E.I. cultural restrictions of the Democratic radicals, which caused a strong reaction in Silicon Valley. This manifesto was used by Anderson as a benchmark for political judgment. He will support all politicians with the same vision and oppose anyone who disagrees with it.

In the crypto space, if we talk about absolute influence, it must be Marc Andreessen. After investing more than $7 billion in the crypto space, A16Z has become the biggest "crypto bull" in Silicon Valley. After the launch of Ethereum in 2014, A16Z shifted its attention away from traditional investments and launched a dedicated crypto fund. The scale of financing soared from $300 million in the first phase to $4.5 billion in the third phase. Among them, the first phase of the fund's income increased by 10 times, making it the best performing fund in A16Z's history.

Mark Anderson and his girlfriend met with Zuckerberg in 2015, source from Yahoo Finance

However, during the market downturn, A16Z's billions of dollars in paper gains were wiped out, and the value of the fund fell by about 40% in half a year. On the one hand, companies in the portfolio such as Ripple, Coinbase, and Uniswap were sued, and on the other hand, regulation significantly slowed the pace of crypto investment (the third phase of undeployed cash set a record). A16Z also tried to sit down with Gensler's SEC, but after more than ten attempts, Gensler still refused to meet with him. The same situation happened to Bitcoin mining companies. Marathon Digital tried to contact the Biden administration many times, but its request was never accepted.

The inability to make progress with regulators, or even to communicate effectively with the authorities, has frustrated crypto investors and companies like A16Z, and it was in this context that Trump emerged with his pro-crypto policies. He first expressed support for U.S. mining companies at the Bitcoin Miners Presidential Roundtable, and then gave a broader pro-crypto stance, saying that he would stop the Biden administration's crackdown and create the future of cryptocurrency in the United States.

Less regulation has always been a political goal pursued by the crypto industry, so Trump's friendly attitude quickly won support, which was even more obvious after Kamala Harris became the presumptive Democratic candidate. Many people worry that if Harris wins the election in November, she will continue to push forward Biden's strict financial regulatory agenda, which is a big problem for Wall Street and cryptocurrencies. Harris, who is backed by senior Democratic Senator Elizabeth Warren, became famous for her tough stance against banks during her tenure as California Attorney General. Many people believe that she is even more left-wing than Biden.

Marc Andreessen, who just finished his "spiritual hike", has become an unabashed right-winger in Silicon Valley, just like his close friend Peter Thiel, appearing on various conservative podcasts and making friends with anti-D.E.I. and populists. And his A16Z also learned an important point from SBF: if you want your startup to survive, you must attract all the attention of Washington. Therefore, this top Silicon Valley venture capital firm has already started to act long before Trump appeared.

Earlier this year, Andreessen and Horowitz quietly hosted a fundraiser for Republican Congressman Thomas Earl Emmer at the A16Z Menlo Park office, and then held another large fundraiser for Republican Senator Cynthia Lummis of Wyoming with top crypto investment firm Paradigm. OpenSecretsdata shows that Andreessen and Horowitz ranked seventh on the list of donors in this election, and this ranking will continue to move forward after the two made new donation commitments.

Of course, Andreessen’s “political awakening” could not stop at personal donations and fundraising activities. Shortly after he published the “Technology Optimist Manifesto”, he and Horowitz announced the establishment of Fairshake. This super political action committee (Super PAC) for the crypto field aims to “make the United States a home for innovators building the next generation of the Internet”. In the past few months, it has frequently appeared in the news of political donations.

According to the Federal Election Commission (FEC) documents, Fairshake has currently raised $200 million and spent more than $83 million, and still has $120 million in cash on the account, making Fairshake surpass MAGA Super PAC to become the third largest PAC in the United States. Judging from the list of donors, A16Z and its investment portfolio constitute the main source of funding for Fairshake, including A16Z's own $47 million, Ripple's $50 million, and Coinbase's $23.5 million. In addition, mainstream crypto platforms such as Circle, Kraken, Tether, and the Winklevoss brothers' Gemini, as well as first-tier crypto funds such as Jump Crypto, Electric, Multicoin, and Paradigm have all participated, forming a very powerful "crypto alliance."

While many donors tend to support the Republican Party, Fairshake's strategy is to focus on areas that strongly lean toward a single party and support pro-crypto candidates in primaries, regardless of party, so that the primary winner has a better chance of winning the general election. This is basically similar to the strategy used by the SBF-funded GMI PAC during 2022, when GMI's strategist Michael Carcaise currently serves in the same position at Fairshake. According to Public Citizen statistics, in the six primaries that Fairshake has intervened in this year, only one candidate has lost, with a winning rate of over 80%.

Unlike traditional PACs, super PACs are not allowed to donate directly to campaigns, but by purchasing ads supporting or opposing candidates, Fairshake can expand its influence on campaign results without limit. This has become a nightmare for anti-crypto politicians in many elections this year.

In March of this year, Democratic radical star Katie Porter raised more than $30 million in her campaign and had a good chance of winning a California Senate seat. But Porter follows Elizabeth Warren's political line and played an important role in Harris's fight against banks, so she was identified by Fairshake as a potential "anti-crypto ally" of Warren.

Katie Porter is giving a campaign speech, source from CNBC

During the California primary, Fairshake invested more than $10 million to weaken Porter's young voter base. Banners hanging over Hollywood and vans on the Walk of Fame were full of sharp comments about Porter, promoting her misleading voters to accept bills that benefit big business. In the end, about a third of Porter's team's campaign funds were hedged by Fairshake, causing her to fall behind Democratic colleague Adam Schiff and fail to enter the general election in the fall.

When judging the candidates' crypto stance, two pro-crypto bills, FIT21 and anti-SAB121, became the main touchstones. Jamaal Bowman, a Democratic congressman from Westchester County, New York, was defeated by $2.1 million in negative ads from Fairshake because he voted against SAB121 twice. Another opposite example is in Alabama, where Shomari Figures won the primary after receiving an additional $2.4 million in advertising from Fairshake, even though he raised almost the same amount as several other candidates.

Crypto supporters are well aware that there is little chance of toppling "public enemy number one" Warren, but using the example of Porter and others losing the election, the crypto industry can put pressure on other anti-crypto politicians. Fairshake's signal is clear: if you call for crypto regulation, we will not only make you lose money, but also make you lose voters.

Cryptocurrency has become a barbarian at the gate of Washington, and Fairshake is regarded as one of the biggest money forces in this round of presidential elections, which is the "rapid development of money politics." Its spokesman Josh Vlasto recently said href="https://www.google.com/url?sa=t&source=web&rct=j&opi=89978449&url=https://www.nytimes.com/2024/03/08/us/politics/crypto-super-pac-senate-oh-mt.html&ved=2ahUKEwiz5Yyv2suHAxWKhlYBHd03Mo8QFnoECBcQAQ&usg=AOvVaw22djgsUnZndBY76nwtc8yg" target="">said that Fairshake has enough resources to influence the composition of campaigns and institutions at all levels. This is indeed the case, but this barbarian has already broken through the door. In addition to Trump and a group of congressmen, they now have a crypto-friendly "disciple vice president."

Left or right? The demise of the crypto-Austrian school

After rejecting Trump’s donation request in September last year, Peter Thiel’s attitude changed after learning that Vance was on the vice presidential candidate list. According to Axios, Thiel, Musk, Sachs and others were still lobbying for Vance until the day before Trump announced his vice presidential candidate. The best-selling author has a special relationship with Silicon Valley. His venture capital firm Narya Capital, in addition to funding from Peter Thiel, has also received support from Marc Andreessen and former Google CEO Eric Schmidt. Vance's position on the political stage is more like an extension of the ideology of the Silicon Valley right wing, which was the case before he became the vice presidential nominee. Vance's 2021 cryptocurrency statement is clearly a matter of great concern to right-wing tech libertarians. After the sexual harassment scandal of FDIC Chairman Martin Gruenberg, Vance was the first to fire at him and promote legislation to weaken the FDIC's regulatory power over banks. Now, from Trump to Vance to Congress, the entire Republican Party seems to be affected by this "ideological extension." Poll data shows that currently 28% of Republicans hold or have purchased cryptocurrencies, and 60% of Republicans prefer Congress to clarify crypto regulations. Congress passed the FIT21 pro-crypto bill in May this year, which was also led and promoted by the Republicans.

Of course, the high-profile pro-crypto stance is not just about "making money", and the marriage between the crypto industry and the Republican Party also has ideological factors.

In November 2023, Trump hosted a luxurious dinner for VIP holders of the Trump Card at his Mar-a-Lago estate. Anyone who purchased at least 47 digital cards could buy a ticket to attend. Trump Card is a series of NFT digital trading cards issued by CIC Digital, consisting of various Trump portraits such as Superman and Cowboys. Each card costs $99. The NFT was at the end of the market hype when it was launched at the end of 2022, so its rise was completely timid not long after.

But this did not hinder the enthusiasm of Trump fans to make a pilgrimage. They flew all the way to Florida to meet their idol president. Trump unexpectedly discovered that the NFT card, which was originally just another brand experiment of his, actually effectively gathered a "crypto MAGA" community, where young people not only understand encryption technologies such as NFT, but also have a high degree of identification with MAGA culture.

At the VIPdinner in May this year, Trump's friendly attitude towards the US encryption industry was warmly welcomed by a large number of populist supporters. David Bailey, CEO of Bitcoin Magazine, was also very surprised by this. He recently revealed in a podcast that he had been providing professional advice in the field of encryption to the Trump team in the past few months, but he did not expect such a strong response.

The Trump team immediately captured this voter sentiment and began its own political transformation project. At the Libertarian Party's National Convention at the end of May, the team's judgment was verified. Trump's speech was repeatedly interrupted by boos and ridicule, but when he promised to pardon Ross Ulbricht (Bitcoin Silk Road developer), the mood in the venue suddenly reversed, ushering in uninterrupted cheers and applause. Shortly after the convention ended, Trump completely completed his transformation of his political stance.

Trump attends the Libertarian Party National Convention, source from Reason

In the 2016 book "Bitcoin Politics: Software as Right-Wing Extremism", author David Golumbia pointed out that supporters of Bitcoin and blockchain identify with a form of "cyberliberalism" that relies heavily on far-right political ideas. Glenbia has previously explained the source of this political thought in many papers: on the one hand, it is the widespread adoption of Bitcoin by liberal (Libertarian, generally conservative on economic issues, right-wing) and anti-state political groups after the "PayPal blocking WikiLeaks" incident, and on the other hand, it comes from the public propaganda of anti-central bank ideas by the extreme right in the United States.

This phenomenon of "technical right-wing" can be traced back to the early Internet era in the early 2000s. During his presidential campaign in 2007, Ron Paul found that in addition to the militia group (Paul's voter base), there were also a large number of Internet geeks who also strongly agreed with his ideology, namely free market economy, return to the gold standard, distrust of central banks, and personal freedom and privacy. Obviously, these ideologies are also highly consistent with the ideas of the Bitcoin holder group (not Bitcoin itself).

After the birth of Ethereum and the ICO boom, the liberal component of cryptocurrency has increased significantly, but a 2018 Coindesk survey showed that the left-right and right-leaning crypto communities accounted for 45% and 52% respectively, with the right-wing still accounting for the majority (55% of the Ethereum community is left-leaning). After the outbreak of narratives such as DeFi and NFT in 2021, the ideology of cryptocurrency has gradually faded due to the international development of the industry, but the crypto community, especially the crypto community in the United States, has always overlapped with the Republican right wing in terms of ideology.

This potential political tendency was observed by Trump, who took advantage of the ideological overlap to perfectly blend liberalism, populism and Trumpism into his pro-crypto policies.

In the new Republican Party Platform, liberal ideas are reflected in the anti-regulatory level. Trump advocates protecting the rights of citizens to freely transfer and trade assets, and prohibiting central bank digital currencies (CBDCs) that represent the power of the central bank. Populism is mainly reflected in emphasizing the innovation and development of the cryptocurrency and mining industries in the United States, while promoting the revival of the energy industry and bringing more crypto job opportunities back to the United States.

This set of guidelines has been highly recognized by Marc Anderson and others. The small detail of putting cryptocurrency before AI also impressed Peter Thiel. In a debate with LinkedIn founder Reid Hoffman in 2018, he said that "cryptocurrency is liberalism, while AI is communism."

The sudden return of the right-wing trend has even stirred up a storm of speech in the industry. For example, Ryan Selkis, a long-time Trump supporter and CEO of Messari, said in a debate on X that he hopes to "send all American immigrants back home." Shortly after the incident, Ethereum founder Vitalik Buterin published an article calling on the crypto industry not to blindly vote for pro-crypto politicians with impure motives and to try to remain ideologically neutral.

However, this is almost impossible. In addition to the political agenda, the influence of Silicon Valley Kingmakers on cryptocurrency ideology is beyond imagination. In the past one or two years, in the field of cryptography, especially in the Ethereum ecosystem, the narratives and explorations about network states, longevity, and decentralized science (DeSci) can almost be traced back to Peter Thiel, who pinned his imagination and pursuit of the future.

Around 2010, Peter Thiel began to explore the seasteading business. Its concept is to create autonomous micro-states in international waters. Thiel believes that this is a realistic path to liberalism in a short period of time. To this end, he provided a large amount of funds to establish the Seasteading Institute, saying that "the question of whether it is feasible is irrelevant because it is absolutely necessary." However, due to slow progress after six years of exploration, Thiel eventually cut off funding for the Seasteading Institute in 2015. Subsequently, this concept evolved into a network state and moved to the crypto field for further exploration.

Longevity is also a research field that Thiel believes has been neglected for a long time. Prolonging life and blocking the footsteps of death have always been Thiel's grand vision. He believes that most people passively accept aging, but he doesn't want to be like that. He plans to live to at least 120 years old and takes human growth hormone every day. He has donated more than $6 million to multiple foundations engaged in longevity research and signed a "freezing agreement" with cryogenic technology company Alcor, and his body will be frozen immediately upon death. In addition, in his reflection on the slowdown in technological development, Thiel believes that the current corruption of science is the root cause. These ideas have promoted the exploration of the crypto industry in the fields of Longevity and DeSci.

Recently, Thiel and Vitalik co-invested in the political prediction platform Polymarket. Despite regulatory pressure, this encrypted gambling platform has become a political prediction tool that is more valued than polling data in this year's election. In the circle, it is regarded as the first real killer application in the encryption industry. However, in Thiel's eyes, the value logic of Polymarket may be roughly the same as that of Palantir, creating a spillover effect by providing more reliable predictions of public sentiment output that are more accurate than polls. When economic interests are added to the equation, people's behavior tends to become more real. Today’s on-chain world is full of such data, but they are ignored like the cookies that Google left in the corner in the early 2000s.

Similarly, as Silicon Valley’s most well-known “media investment company”, A16Z also has a strong ideological influence on its crypto portfolio. In an article titled “Money, Power, Politics and the Next Battleground of the Internet” in March this year, Marc Andreessen, Horowitz and senior partner Chris Dixon discussed the political issues of cryptocurrency.

From A16Z's perspective, Bitcoin is a political movement, and "Web3" (a concept proposed by A16Z) is a technological movement that has evolved from a political movement. As more resources and time of the younger generation are transferred to the Internet, cryptocurrency will become a solution to the Internet's political and governance structure. This view is reflected in Farcaster, a decentralized social network in which it recently invested hundreds of millions of dollars.

Cryptocurrency, sandwiched between Silicon Valley and Washington, is inevitably politicized. People invest not only language and emotions here, but also their own economic interests. When a technology can directly influence ideology through the economy, or ideology influences the economy, its influence on society will be unprecedented in both depth and breadth.

Perhaps, cryptocurrency will replace social media and become the ultimate technological platform for the next generation of political ideological confrontation.

References:
《The Contrarian: Peter Thiel and Silicon Valley's Pursuit of Power》
《Peter Thiel helped build big tech. Now he wants to tear it all down.》
《Peter Thiel is taking a break from democracy》
《The Republicans Have a Peter Thiel Problem》
《The Black Box of Peter Thiel』s Beliefs》
《Some of Silicon Valley』s Most Prominent Investors Are Turning Against Biden》
《Why the Biden Administration Is Suing Apple and Investigating Big Grocers》
《Marc Andreessen Eats Washington》
《Bitcoin as Politics: Distributed Right-Wing Extremism》

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