What are the similarities between the crypto movement and populism? Sam Gilbert shares his insight on how both respond to economic inequality, feature charismatic leaders, and advocate direct democracy as a solution to society's problems.
Of course, as populism is a contested term, they may not mean exactly the same thing. Political scientists disagree about whether populism is an ideology or a strategy, and on the normative question of whether it is antidemocratic. Outside academia, “populist” is used as a pejorative for politicians who invoke “the will of the people” while departing from liberal-democratic norms. It is also used more favourably to describe citizens directly engaging in politics through social movements and street protests.
Luckily, my aim is not to settle this debate. Instead, I want to sketch three similarities between the crypto movement and populism – understood broadly as “the sum of the things that are considered populist these days”.
Left behinds vs elites
The first similarity is a common diagnostic of the problems of contemporary society. The crypto movement and populism are both responses to economic inequality, which they attribute to failures of political leadership. They share a distrust of elites, a conviction that institutions are at best ineffective and at worst corrupt, and an intuition that the economic system is a “rigged game”.
In the crypto movement, this diagnostic manifests in a critique of government, banks, and dominant tech platforms. Bitcoin was conceived in the wake of the 2008 financial crisis as a means of disintermediating the banking system, which many crypto advocates regard as illegitimate. Coded into Bitcoin’s genesis block is the front page headline from The Times on 3rd January 2009— “Chancellor on brink of second bailout for banks”. The implication is that Bitcoin’s pseudonymous creator, Satoshi Nakamoto, believes that financial elites serve their own interests rather than those of ordinary people, and that the power of politicians like Alastair Darling over public finances is intolerable.
During the 2010s, the same interpretation of the bailouts underpinned the electoral successes of right-populists such as Nigel Farage, Doug Ford, and Donald Trump. Bridging between Satoshi and these figures is the political strategist Steve Bannon, who described crypto in 2018 as a “disruptive populism [which] takes control back from central authorities”.
More recently, arguments in favour of web3 have been predicated on claims that tech giants such as Apple, Google, and Spotify abuse their market position as “gatekeepers”, extracting rents from digital creators. The same analysis informs antitrust populism, which seeks to dispense with defining monopoly solely in terms of consumer welfare, in order to justify breaking up big tech.
Charismatic leadership 2.0
The second similarity between the crypto movement and populism relates to leadership communication strategies.
Crypto influencers – typically founders of high-profile crypto projects, major crypto investors, or crypto-owning celebrities – rely on the same social media platforms as populist leaders to communicate directly with followers and mobilize them against critics. They may even claim to be enacting the collective will (see “Technopopulism” below). Usually they invoke “the community”, as Do Kwon did when announcing his (unsuccessful) rescue plan for the cryptocurrency Terra-Luna, but from time to time there are overtly populist appeals to “the people”. For example, Elon Musk has described the cryptocurrency he inspired, Dogecoin, as “the people’s crypto” and argued that content moderation on social media is “contrary to the will of the people”. Musk is referred to as “daddy” by a section of his 100 million Twitter followers, recalling populist authoritarian father-figures.
Of concern to regulators is a tendency for influencers like Musk to make excessively bullish predictions on social media about the future performance of crypto assets, which are then amplified by their followers. This seems to have been what the US Senate Banking Committee chairman was getting at when he referred to crypto’s “phony populist marketing”. The practice echoes the tendency of populist leaders to over-promise when it comes to jobs, growth, prosperity, and so on.
The president of El Salvador, Nayib Bukele, combines the roles of populist political leader and crypto influencer. Having won a supermajority in the legislature in 2021, he moved to consolidate his power by attacking judges and journalists before making Bitcoin legal tender, rolling out a network of 1,500 cryptocurrency ATMs, and announcing plans to construct the world’s first Bitcoin city. The IMF has urged him to reverse his decision on Bitcoin because of the negative impact on El Salvador’s sovereign credit rating, but – with a characteristically populist disregard for institutional expertise – he has ignored their advice. Elsewhere, crypto-friendly policies are proving electorally successful in city politics.
Third, there is an extent to which crypto advocates and populists agree about the way solutions to society’s problems should be generated.
Here it is useful to draw on recent work by Chris Bickerton and Carlo Invernizzi Accetti on “technopopulism”. Populism has often been understood as inherently hostile to expertise, but Bickerton and Accetti show that there are several configurations in which populism and technocracy can happily co-exist. One of the varieties of technopopulism they identify is a “bottom-up” version, of which Italy’s Five Star Movement (M4S) is the exemplar. M4S crowdsources its policies online, with the rationale that the collective intelligence of the people is greater than the intelligence of the supposed experts in parties, the civil service, and government.
The crypto movement shares with bottom-up technopopulists the belief that direct democracy is technically (and perhaps morally) superior to representative democracy. The key organizational innovation in crypto is a digital version of the cooperative called the Distributed Autonomous Organization (DAO). DAOs obviate the need for trusted central authorities by programming rules into blockchain-based smart contracts and putting matters that are outside the scope of the rules to a majority vote by “the community”. In a manner that would surely resonate with M4S, DAO decisions are collective and expertise is emergent.
In this context, Elon Musk’s seemingly eccentric perspectives on political decision-making begin to make more sense. Musk has polled Twitter users on whether he should sell Tesla stock, suggested that under his leadership Twitter itself will be partly governed by Twitter-poll plebiscites, and proposed party-less “direct democracy” as the basis of governance for colonies on Mars. These are the technopopulist solutions of a crypto influencer.
This is obviously not an exhaustive account of crypto’s relationship to populism. There is more to be said about the way the construction of “the community” in crypto sometimes parallels the populist construction of “the people”, delegitimating “NoCoiners” in the way that populism delegitimates minorities. David Golumbia has shown that while the 2008 financial crisis might be the proximate cause of the crypto movement, its ideological roots are to be found in the long history of libertarianism. In the context of crypto discourse, the libertarian ideas of thinkers like Murray Rothbard interact with populism in intriguing ways that deserve to be explored by researchers.
Finally, crypto populism warrants policymakers’ attention. An estimated 2.3 million UK citizens have invested in crypto – following the crypto crash, most will have seen the value of their holdings collapse in recent months. It is now generally accepted that crypto implies a need for stronger financial regulation. What its affinity with populism brings into focus is whether and how that need can accommodate the libertarian and bottom-up instincts of the crypto world.