The Economist: Crypto Assets have become the ultimate "swamp assets".

If you can't beat them, join them.

If you can't drain the swamp, become the swamp.

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

Once, the protagonist of the crypto world was Satoshi Nakamoto; today, the main character is the U.S. President who claims "no one understands better than I do." Trump once asserted that cryptocurrencies are "extremely volatile and have no support"; now he has transformed to say that the crypto community is "full of the spirit of the founding era, and it's exciting."

Behind this dramatic turn of events lies not just a change in personal attitudes, but also reflects that cryptocurrency—once the "dragon-slaying youth" embodying subversion and ideals—has gradually become "marsh-like," even being transformed into an "alchemical stone" that turns stone into gold in the hands of certain power players.

We are at a paradoxical moment in time: a technology that claims to be "decentralized" and to break free from power control is now flirting with the highest levels of political power, even becoming deeply entangled. This is not only a betrayal of its original intention but may also lead to an existential crisis that goes beyond the financial realm.

The cover article of the latest issue of The Economist states that cryptocurrencies have become the ultimate "swamp asset." In a sense, is this a victory of the revolution?

Today, let's discuss why the authoritarian president has fallen in love with cryptocurrency, along with the reversals, the game of monetary power, and the crises behind it.

1. Trump’s "Cryptocurrency Feast": A Carefully Orchestrated "Gilded Game"

The climax of the story was undoubtedly the planned dinner on May 22, 2025. A few weeks earlier, the meme coin released personally by Trump - $TRUMP, was on the verge of going to zero and almost became a joke in the cryptocurrency world.

However, the president's personal "endorsement" is like a shot of adrenaline, instantly giving it a certain "real value." The founding team of $TRUMP coin has issued a "pilgrimage" invitation: holders of coins ranked in the top 220 by value can enjoy the "honor" of dining with Trump. Among them, the top 25 large holders can participate in a VIP reception and have "intimate contact" with the president.

As soon as the news broke, the crypto world went crazy, and a buying frenzy ensued. The final list of "lucky ones" formed a bizarre array of individuals: there were wealthy crypto tycoons, fervent supporters of MAGA (Make America Great Again), and pure speculators.

A person who 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 person, a Trump supporter from New York, who once splurged on cryptocurrency to purchase a Trump-branded watch; and even a mysterious figure who wears a mask and presents himself as a "cyber detective" specializing in tracking stolen digital assets. Blockchain data ruthlessly reveals that among the VIP seats, the presence of foreigners is not uncommon.

This seemingly star-studded gala is undoubtedly fraught with controversy. Oversight organizations of the U.S. government have condemned it, pointing out that it may violate federal regulations prohibiting officials from accepting gifts. Furthermore, if any individuals with ties to foreign governments are present, the dinner could even violate the solemn Emoluments Clause in the U.S. Constitution, which forbids federal officials from accepting any gifts from foreign governments. A former special advisor on ethics and government reform in the Obama administration remarked bluntly: "This is a moral nightmare."

Just four months into Trump's second term, his family is driving the expansion of private business interests at an unprecedented speed and scale. The Meme coin dinner is just the tip of the iceberg. Their involvement in the crypto space goes far beyond this: a Bitcoin mining company, as well as a project launched by his son called "World Liberty Financial," clearly bear the mark of the Trump family.

Critics sharply pointed out that, against the backdrop of Trump significantly relaxing regulations on cryptocurrencies, these actions constitute a serious conflict of interest. The White House spokesperson responded dismissively, stating that the understanding king always prioritizes the interests of the American people, and that the Meme coin dinner is a "private business activity" unrelated to the official White House. If you believe all this, one can only say that Americans are naive.

This is not just a dinner; it feels more like a meticulously orchestrated "gold-plated game." The transaction fees of $TRUMP coin, as well as the tokens reportedly still held by allies worth about $10 billion, indicate the true winners of this game.

Data from the blockchain analysis company Chainalysis shows that while 58 investors made profits exceeding $10 million from this coin, approximately 764,000 wallets incurred losses, most of which are likely the retail investors lured by the myth of "getting rich overnight." As the powerful divide the profits amidst the clinking of glasses, the dreams of countless ordinary investors may turn to dust.

II. The "Swamping" of Cryptocurrency: From "Dragon Slayer Youth" to "The Evil Dragon Itself"

(I) A Fractured Utopia: The Fading of Ideals and the Departure from Original Intent

Looking back at the origins of cryptocurrency, how many exciting declarations have we heard? In 2009, Bitcoin emerged, giving rise to a movement filled with utopian colors, shining with the light of anti-authoritarianism. Early cryptocurrency believers held lofty and even great goals: they longed to completely disrupt the existing financial system, protect personal property from the erosion of inflation and unjust expropriation. They dreamed of taking power away from large financial institutions and putting it in the hands of every ordinary investor.

In their eyes, cryptocurrency is not just an asset, but a liberating technology, a tool that can bring about a fairer and more transparent world. Cryptocurrency evangelist Andreas Antonopoulos once passionately declared, "Bitcoin is a disruption. The impact it brings is something that most people still find hard to imagine... a complete disruption. A fully decentralized currency, with no borders... Bitcoin is born for the six billion unbanked people around the globe."

At that time in the crypto world, there was a kind of "techie" idealism. It tried to play multiple roles at the same time: a value storage tool, a high-return investment, and a financial technology that allowed people to make peer-to-peer transfers without going through government and bank-controlled channels. It promised to provide a certain degree of anonymity and privacy protection, so that people would not always feel like "Uncle Sam" was watching them from behind. It fundamentally offered a choice to break out of the traditional system, as early supporters were filled with extreme distrust of the existing financial system.

However, over the course of more than a decade, reality has gradually moved further away from the initial ideals. It is evident that the ideals of cryptocurrency are continuously "shrinking". Unless you are a die-hard believer in crypto, you probably no longer think that cryptocurrency can replace the global financial system, end the dominance of the US dollar, euro, and yen, or make the banking system completely disappear.

(2) The Reality of Mud and Sand: The Birth of "Swamp Assets"

Today's cryptocurrencies often present a different picture. They have become a highly speculative tool, where people buy and hold, expecting prices to rise; or short-sell, expecting prices to fall; or invest in certain crypto companies, hoping they can outperform the market.

It has also been heavily criticized for playing a fundamental role in black market transactions, being widely used in illegal activities such as human trafficking, drug trade, and terrorism financing. Many crypto activities choose to operate outside of the United States jurisdiction precisely because related companies are unwilling or unable to comply with U.S. securities and banking regulations.

"Swamp Assets" - a concept put forward by The Economist, aptly summarizes the current awkward situation of cryptocurrencies. An industry that once dreamed of being "politically detached" has now become synonymous with "abuse of power," developing a "corrupt relationship" with the U.S. government that far exceeds that of Wall Street or any other industry. This is undoubtedly a huge irony.

The giants of the cryptocurrency industry are pouring billions of dollars into political lobbying to maintain friendly legislators and ruthlessly attack opponents who attempt to regulate them. The president's sons are selling their crypto projects around the world, while the president himself engages in exchanges of interests with the biggest investors through events like crypto dinners.

The cryptocurrency held by the First Family of the United States is now worth billions of dollars, and it could even become the family's largest single source of wealth.

This trend of "swamping" stands in stark contrast to other major economies in the world.

In recent years, countries and regions such as the European Union, Japan, Singapore, Switzerland, and the United Arab Emirates have successfully provided new regulatory clarity for digital assets without the rampant conflicts of interest. In developing countries where government expropriation is common, inflation is high, and the risk of currency devaluation is a real concern, cryptocurrencies still play a role to some extent that early idealists envisioned.

Ironically, all of this is happening against the backdrop of the underlying technology of digital assets maturing. Speculative behavior remains prevalent, but mainstream financial firms and tech giants are starting to take cryptocurrencies more seriously. The process of "tokenization" of real-world assets is accelerating, with traditional financial institutions like BlackRock and Franklin Templeton becoming major issuers of tokenized money market funds. Applications in the payment sector also show great potential, with companies like Mastercard and Stripe embracing stablecoins.

However, in the United States, a country that is supposed to lead innovation, the cryptocurrency industry seems to have chosen a shortcut to dance with power. They argue that during the Biden administration, they had no choice but to "fight by any means" due to the tough stance and frequent enforcement actions of SEC Chairman Gary Gensler. Banks are afraid to offer services to cryptocurrency companies for fear of regulatory pressure, nor do they dare to get involved in the space easily.

There is some truth to this statement, as clarifying the legal status of cryptocurrencies through the courts rather than Congress is indeed inefficient and not entirely fair. However, now, with Trump's rise to power, the pendulum of regulation seems to be swinging violently to the other extreme, and most cases against cryptocurrency companies have been dropped. Is this a victory for the industry, or is it laying the groundwork for a larger crisis?

3. Why Trump Fell in Love with Crypto: Sugar-Coated Bombshell or Pandora's Box?

Trump's 180-degree turn on cryptocurrency is one of the most striking phenomena in American politics in recent years. From once saying, "I don't like Bitcoin and other cryptocurrencies; they are not money, their value is extremely volatile, and they have no substantial basis," to now claiming that he wants to make the United States the "global crypto capital" and an "undisputed Bitcoin superpower," what lies behind this is a thoughtful policy shift or a carefully calculated marriage of politics and business?

(1) "Under the Sugar Coat": Why Did Trump Embrace Crypto?

Trump's "crypto preference" is certainly not unfounded; the driving forces behind it are complex yet direct:

1. Naked Economic Interests: This is the most direct and unabashed motive. Trump and his family members have deeply involved themselves in the investment and operation of cryptocurrencies. Whether it's the $TRUMP meme coin that allows him and his partners to make a fortune, or the Bitcoin mining company invested in by his two sons, as well as their majority stake in World Liberty Financial, it all clearly points to the growth of personal wealth. The president and his family are directly profiting from this emerging industry.

2.Realistic Political Considerations: The crypto community has been described by Trump as "full of the spirit of the founding, exciting." Behind this is a covetousness for the political energy of this group. Cryptocurrency supporters are often young, passionate, and have a certain economic strength. Securing their votes and campaign donations is extremely tempting for any political figure. Trump's promise to introduce favorable legislation for crypto and his portrayal of the Biden administration as the "executioner" stifling emerging industries is precisely to cater to the demands of this group.

3.A Consistent Anti-Regulation Stance: One of the core policies of the Trump administration was deregulation. The cryptocurrency industry's challenge to the existing financial regulatory framework and its desire for a more lenient environment align with Trump's governance philosophy. Liberating cryptocurrencies from the "constraints" of agencies like the SEC fits into his overall strategy of weakening the power of regulatory bodies.

4. Self-Reinforcement of the "Disruptor" Image: The anti-establishment and traditional-challenging nature inherent in cryptocurrency somewhat aligns with the "outsider" and "disruptor" image that Trump has always tried to cultivate. Embracing this field, which is seen as an "outlier" by the mainstream financial community, may further strengthen his appeal among certain voter groups.

(2) "Shells" and "Magic Boxes": Potential Huge Risks

However, beneath the sugarcoating of Trump's "crypto favoritism" may lie a "bomb" capable of blowing up the entire financial system, or it could unleash countless disasters from a "Pandora's box". The risks are multidimensional and deep-seated:

1. Systemic risks in the financial system:

Volatility Contagion: The nature of cryptocurrency's 'extreme volatility and narrative support' has not changed. In the absence of regulation, if it becomes deeply integrated into the mainstream financial system, its inherent instability may be transmitted to traditional financial markets through various channels, triggering a systemic crisis. Insiders warn that Bitcoin could become today's credit default swaps (CDS) or subprime mortgage-backed securities (MBS) — complex and poorly regulated financial instruments that triggered the 2008 financial crisis.

Regulatory arbitrage rampant: Financial institutions inherently have the impulse to evade regulation. If the crypto space becomes a new "no man's land", Wall Street firms are likely to leverage this wave of "crypto-friendly policies" to "reshape" their businesses into crypto operations, thereby circumventing the existing regulatory framework aimed at protecting financial stability.

The Absurdity and Danger of "Strategic Bitcoin Reserves": The Trump administration's proposal to establish a so-called "strategic bitcoin reserve" plans to use up to $100 billion of public funds to purchase cryptocurrencies such as Bitcoin and Ethereum, which experts have denounced as "meaningless and even downright foolish."

Unlike oil or pharmaceutical reserves that have actual strategic value, Bitcoin reserves have almost no strategic significance other than delivering huge profits to the crypto industry. This essentially puts taxpayers' money into highly speculative assets, with the risks fully socialized.

Reenactment of the 2008 Crisis: Once these risks explode, their impact will far exceed that of "speculators in cryptocurrencies"; it will affect all ordinary Americans who have mortgages, retirement accounts, or hope to start a business through loans. Because the entire financial system is built on the foundation of "trust", when opaque risks are quietly embedded and regulation is deliberately weakened, the collapse of trust is just a matter of time. Even more frightening is that the "firewalls" such as the Dodd-Frank Act, which were introduced to respond to the crisis, are now being gradually dismantled by the Trump administration.

2. **Ordinary Investor Risk: Just escaped the fire pit, and then entered the swamp

Scams Run Rampant, Losing Everything: The cryptocurrency space is filled with various scams and Ponzi schemes. Many companies spring up overnight, targeting those who are less knowledgeable about finance and technology with extravagant promises. Once scammed, due to the anonymity and difficulty of tracking cryptocurrencies, losses are almost impossible to recover.

Compared to the layered risk warnings and anti-fraud mechanisms in traditional banking systems, the world of cryptocurrency is like a "dark jungle." Elderly people, veterans, startup owners, and even those just looking for partners on dating apps can fall victim to scams, with losses amounting to hundreds of billions of dollars.

The Illusion of "Democratization" and the Lament of Retail Investors: Events like the $TRUMP dinner may appear to provide ordinary people with the opportunity to access top-level power, but behind the scenes, they often result in the wealth accumulation of a few insiders and significant losses for many retail investors. The frenzy surrounding meme coins is particularly evident, as their volatile nature leads most latecomers to become "bag holders".

3. NationalLevelCorruptionandCrisis:

Trump once used "Drain the Swamp" as one of his core campaign promises, meaning to eliminate political corruption and special interest groups in Washington. However, on the issue of cryptocurrency, he seems to be digging a new, more covert, and potentially more dangerous "digital swamp" himself.

This unicorn, which once embodied the ideals of liberalism, is now being transformed into a "swamp beast" entrenched in the center of power.

Unprecedented Conflict of Interest: The President and his family are directly profiting from an industry they are actively promoting deregulation for, a blatant conflict of interest that is extremely rare in the history of modern American politics. This is no longer just a matter of "opening a Trump hotel next to the White House"; it is a "supersized version of corruption" that privatizes public power, even evoking the governance dysfunction of a "banana republic".

Institutionalization of the “Bribery Channel”: Actions such as the $TRUMP banquet and equity negotiations with certain crypto giants with criminal records essentially put a price tag on political influence, providing interest groups with a channel to "bribe" the core of power. This severely erodes the integrity of politics and the fairness of decision-making.

Hotbed of Terrorist Financing and Cyber Theft: Due to its anonymity and ease of cross-border transactions, cryptocurrency systems have become ideal tools for state-sponsored hacking groups (such as North Korea's "Lazarus Group") and terrorist organizations to engage in fund theft and terrorist financing.

Conclusion: A Reflection on the Era of "I, I, Meme"

"I, I, Meme (Me, me, meme)" — This pun mimicking "Me, me, me" accurately captures the selfish nature of the current intersection of cryptocurrency and political power.

A technology that once claimed to empower the masses now seems more inclined to serve a privileged few. Cryptocurrency has gained an unprecedented role at the policymaking table, but its reputation and fate are now closely tied to the rise and fall of its political patrons.

Trump's "preference" for cryptocurrency may bring enormous economic benefits to him and his family in the short term, and it could also secure a more lenient regulatory environment for the crypto industry. However, as The Economist warns, the benefits of this deal may ultimately flow in only one direction. When the political winds shift, or when risks accumulate to a critical point and finally explode, the once "honeymoon" could instantly turn into a "nightmare."

The technology of cryptocurrency itself is not an original sin; it still shows positive innovative potential in areas such as payments and asset tokenization. However, when this potential is hijacked by political speculation and bottomless pursuit of interests, and when "innovation" becomes a guise for "rent-seeking," the consequences can be disastrous.

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