I said everything I needed to say about politics in my June post, What Will Save Crypto?

This month, I’ll tell you why the US election will not matter for your crypto portfolio—and, for US readers, suggest what you can do with your presidential vote.

If I ever decide to commit a non-violent crime, I will run for public office first.

That way, when somebody accuses me of wrongdoing, I can say they are making up bogus charges motivated by political partisanship to destroy me because I threaten their power by “standing up for the people.” Instantly, I’ll have at least 40 million people on my side.

A republic, if you can keep it

As Aesop said, they hang the petty thieves and promote the great ones to high office.

You don't believe me? Look around.

I'll give you an old example: Jim Traficant.

(I know better than to call out my contemporaries.)

Traficant was elected to Congress after admitting—in court—to taking bribes while he served as sheriff for his home county.

As a Congressman, he was later indicted for bribery, embezzlement of campaign funds, and other felonies.

After his conviction, it took Congress three months to expel him.

Yes, they let a convict serve for three months. Was there an important bill that somebody needed his vote for? Some fundraiser that they needed him to attend before they gave him the boot?

He ran for another term from prison as a write-in candidate—and still won 15% of the votes. Upon his release from prison, his constituents threw him a party.

He stole their money and sold their votes, but they loved him anyway.

At least he didn’t shoot anybody on 5th Avenue!

Three sides to every story

Alas, I am not petty, great, a thief, or a politician. I am a Bitmoji who writes a cryptocurrency newsletter.

But, having worked in Congress during my 20s, I've seen some things. I've also seen what voters say and think about people I know personally and events I was involved in. There is a massive disconnect between opinion and reality on both ends of the political spectrum.

Next month, the US will hold a presidential election. At that time, we will vote not for a presidential candidate but for an impression of the candidate we see on TV and at campaign events, read about in newspapers and blogs, and hear about from our friends and family.

Like Plato's shadows on the cave wall, our impressions will reflect only whatever somebody chooses to show us. Modern politics overwhelms us with images crafted and cultivated to fit what we want to see rather than the truth. We latch onto the fragment of reality that we perceive.  We never see the full picture.

Outside of a few insiders, nobody has enough information to make an informed decision about anybody they vote for. I certainly don’t.

Who's good? Who's bad?

You may think the answers are obvious. Often, it's not so easy to tell.

For example, Congressman Tom Emmer, one of crypto's most powerful advocates in Congress. He's the guy who yelled at SEC Chairman Gary Gensler for missing the FTX fraud, among other grievances.

Did you know FTX was one of the biggest donors to Tom Emmer's campaign and gave almost $3 million to the GOP’s Congressional Leadership Fund while Emmer was in charge of it?

Did you also know that Emmer was one of several Congresspeople who wrote a letter to Gensler asking him to stop investigating FTX (among other crypto entities)?

Have you ever asked Emmer how he feels about protecting a scam? Taking money from a fraudster? Did he give the money back? Do you not care because Emmer says nice things about crypto and criticizes people you dislike? Because he shares your views on crypto?

That doesn’t let Gensler off the hook. I've said enough about him.

Smooth talk and flattery

Does that mean you shouldn't consider personal character when voting? You should only care about who will get you what you want?

That’s not for me to say. Vote for whomever you want for whatever reason you want.

If that reason includes seeing your crypto portfolio go up, your vote may not matter as much as you think.

We know that for US-based crypto businesses, a lot of people suffered for no good reason because Biden’s regulators took a bizarre, counterproductive approach to crypto. VCs did ok, but even they are running out of people willing to buy overpriced tokens for projects that have atrocious tokenomics and astronomical valuations.

At the same time, some projects benefited from the talent and money fleeing the US (or not going there to begin with). Thousands of new projects have been launched. Hundreds more are waiting for market conditions to improve.

Oddly enough, crypto is bigger under Biden now than it was under Trump and Obama. Since Biden took office, Bitcoin’s price has reached several all-time highs, with weaker drawdowns than previous presidents.

It's fair to question whether that growth came because of Biden or in spite of Biden.

You could argue that crypto would've done even better WITHOUT Biden, though it’s pure speculation. We have no evidence that US presidents or US policies affect crypto prices.

Bottom line: a hostile US administration couldn't keep crypto down.

Can’t change how markets work

When Trump takes office, he can pump crypto all he wants. Somebody will sell when prices go up.

In crypto, those sellers are the same people who laid the groundwork for that pump. The HODLers. The accumulators. The diehards. The dollar cost averagers.

They’re the first to sell when that pump happens.

As soon as Bitcoin's price goes high enough for long enough that you think it will keep going up, they will sell again. We see this repeatedly through many metrics, plenty of charts, and from all angles of the market, since crypto’s creation.

The phenomenon gets oversimplified into charts like the 1-year HODL wave.

That chart won’t help you plan or analyze the market. For that, I post market updates and special reports that look at the market from multiple dimensions. With those updates and my plan, you know what to expect, how to prepare, and what to do.

The HODL chart expresses a key behavior. “Diamond hands” turn to paper when the price is right.

You may think that’s great because your “bags” will pump.

Maybe, maybe not.

Once the pumps start, you may wait for higher prices before selling. Those higher prices may never come.

Or, you may sell after a small gain—for example, 50% or 100% on an altcoin, a trivial amount for crypto—only to watch that token go up another 5x or 10x higher.

This is not a formula for success. It is a formula for giving insiders a way to make a quick buck at the expense of long-term growth and wealth-building opportunities.

What do you get out of it?

Trump says nice things about crypto. That’s certainly better than calling us criminals and tax cheats, as other candidates have.

So far, he's made a lot of money and votes for himself. What's that do for you? How does that make your life better?

His crypto agenda has three planks: give crypto to the banks and Wall Street, block the government from creating digital dollars, and hold Bitcoin in the US’s financial reserves.

The first two planks don't do anything for your portfolio. The third sounds fine, but once Bitcoin's price goes up, the US government might sell, like they do with oil. Or, the next president may decide to trim those reserves and tank the market.

Either way, they can't change market forces and the investor behaviors mentioned above.

The devil's in the details. Since we have no details, let's not get ahead of ourselves.

Speaking of “no details,” Harris’s crypto agenda barely exists.

Nobody knows what Harris wants to do about crypto. We know some elements of the Democratic Party hate crypto. We just don't know how widely held that opinion is or whether Harris cares.

She may continue Biden's approach. That would suck for US crypto businesses and developers.

Fear not!

If history is our guide, neither candidate will do what they say. They might accomplish bits and pieces, at best. Voters love absolutes, but the US political process forces people to compromise.

Credit where credit is due

Maybe that's why market performance always seems disconnected from politics.

The crypto market crashed more than 50% several times under Biden. It crashed more than 70% several times under Trump.

Obama was even worse – multiple crashes of 80% or more.

On the flip side, it went up 100% after Biden took office, 2,500% after Trump took office, and 5,500% after Obama took office.

Seems fishy.

People make a big deal about the economy under one party or the other, but the economy seems to do whatever it wants regardless of who's in office.

Look at the stock market performance under Republicans and Democrats, adjusted for GDP. Red is Republican, blue is Democrat.

Can you see any trend? Neither can I.

You can extend this to the wider economy. Let’s do GDP. I counted the number of negative half-years in white:

What about inflation? Same.

What about employment? Same.

What about budget deficits? For statistical consistency, we’ll calculate it as a percentage of GDP. Same.

What about oil prices? Same.

From a purely investing perspective, you get no advantage or disadvantage under Democrats and Republicans. On the whole, the US economy performs as well or as poorly under one as the other.

You can take these charts and move the boxes one or two years forward to account for the lag between a change of party and the results of their actions. You'll get the same result.

Blame not, lest ye be blamed

You might say, “This time is different!”

How do you know? What insight or knowledge do you have? The brightest minds on earth have not figured out how to break this pattern. What makes you think you know better than they do?

Your mind may be playing tricks on you.

In August 2022, Congress passed the Inflation Reduction Act.

If you ask the Republicans, it was a total failure. Not a single one voted for it. They’d tell you that inflation skyrocketed after its passage.

That is patently untrue. See for yourself:

After that bill went into law, inflation went straight down.

You don’t have to believe the bill caused a drop in inflation. Inflation has many causes and solutions. Even economists disagree about how it happens and what to do about it.

You can say a lot of things about the bill, but you can't say inflation got worse after Biden signed it.

Likewise for the inflation that came before it. Democrats blame Trump, but Trump wasn't in office when Democrats pushed through a $2 trillion stimulus package in March 2021 with no Republican support.

When Trump left office, inflation was about 2%.

Soon after, we had a run-up of inflation that was more extreme than anything we had seen for 50 years.

You don't have to believe that extra stimulus caused inflation, but you can't say high inflation started under Trump.

The US printed $3 trillion in Trump’s final year, potentially more when you consider other stimulus and interventions. Inflation barely budged.

If you believe the $3 trillion stimulus took a full year to cause inflation, why wouldn’t an extra $2 trillion make it worse? And what about the $8 trillion we printed from 2008 to 2020 that gave us 0-2% inflation?

For the 90% of voters who don’t matter . . .

Do you want to know the craziest part of presidential elections in the US?

Your vote will probably not change the outcome.

For the Senate, Congress, and state and local offices, your vote is vital. Not so for the presidential contest.

Thanks to the Electoral College, your vote for president matters in only seven states: Nevada, Arizona, Wisconsin, Michigan, Pennsylvania, North Carolina, and Georgia. Roughly 10% of the US population lives in those states, and that 10% will decide who wins the presidency.

What about the 90% of Americans, like me, who live in one of the 43 states that are not listed above?

Our states are so tilted towards one party or the other that the outcome is not in doubt. You already know which party will win the most votes within your state. That party will get all your votes for president.

If you live in one of those 43 states painted red or blue in the image above, you can vote for any presidential candidate you want without consequences. Partisanship has already made your decision irrelevant.

Vote Bitcoin for president if you’d like. It won’t change the results of the election, but it will send a message to policymakers in DC.

Know what matters

Am I saying presidential elections don’t matter?

No. They matter a lot.

Every election carries high stakes for your business, employment opportunities, living standards, moral or religious beliefs, mental health, and many aspects of your life.

But presidents can't fix your marriage, get you to lose that extra 10 pounds, or help your crypto portfolio grow.

The crypto market doesn’t care who’s president. Crypto is a global asset. Prices come from buyers, sellers, and circumstances beyond any president’s control.

For that reason, vote your conscience. Vote your principles. Don't worry about the impact on your crypto portfolio.

If neither candidate fits what you’re looking for in a public official, write in your vote. Can you imagine what would happen if a few million people voted for ”Bitcoin” instead of a major party candidate? That would turn heads. That would send a signal.

You have more power than you think, but when you give that power to a political party for reasons other than a genuine belief or desire to see those values and principles applied to government, you’re probably not going to get the desired result. You make it too easy for politicians to take your vote for granted.

They know they only need “50% plus one” votes (often, less than that). They can pay lip service, overpromise, and underdeliver because they know you won't vote for “the other guy/girl.”

(If they don't know it, their campaign consultants will remind them.)

Force politicians to compete for your vote. Use that vote to check the special interests that hold so much sway over our political parties.

Unless you live in one of these seven states above, vote for somebody you truly want to be president, even if they are not on the ballot. You can write in somebody’s name.

If you can't think of anybody worthy of your vote, write in “Bitcoin.” Make your vote matter.

Leave your crypto portfolio out of it.

Relax and enjoy the ride!