Podcast Summary: Click Here – Episode 187. Mic Drop: Crypto and the Man: Prof. Lamont Black on Donald Trump’s Federal Bitcoin Reserve

Introduction

In Episode 187 of Click Here, titled "Mic Drop: Crypto and the Man: Prof. Lamont Black on Donald Trump’s Federal Bitcoin Reserve," host Dina Temple-Raston engages in an in-depth conversation with Professor Lamont Po, an economist formerly with the Federal Reserve Bank in Washington, D.C., and now a cryptocurrency instructor at DePaul University in Chicago. Released on November 29, 2024, the episode delves into the evolving relationship between cryptocurrency and governmental strategies, particularly focusing on former President Donald Trump’s initiative to establish a federal Bitcoin reserve.

Professor Lamont Po: Bridging Economics and Cryptocurrency

Professor Lamont Po introduces listeners to his academic journey, highlighting his transition from traditional economics at the Federal Reserve to teaching cryptocurrency and blockchain technology at DePaul University. He emphasizes the dynamic nature of the crypto ecosystem:

Professor Lamont Po [00:39]: "Money is really a social phenomenon. Crypto doesn't have value. The dollar does not have intrinsic value. It is only value that we associate with it as a community of people."

His classes encourage hands-on experience, requiring students to invest in cryptocurrency at the start of the quarter to foster a deeper understanding:

Professor Lamont Po [03:16]: "So I now teach crypto and blockchain to graduate and undergraduate students and just finished teaching a group of 40 senior finance majors about crypto and all the amazing things in that ecosystem."

Donald Trump’s Strategic Bitcoin Reserve

A significant portion of the discussion centers on President Donald Trump’s announcement to create a strategic Bitcoin reserve, aiming to position the United States as the "crypto capital of the planet" and a "Bitcoin superpower." Professor Po breaks down the implications of this move:

Donald Trump [01:40]: "United States of America will keep 100% of all the Bitcoin the US government currently holds or acquires. This will serve in effect as the core of the strategic national bitcoin stockpile."

Professor Lamont Po [06:17]: "So it's more like a savings account with a mix of currencies, including Bitcoin."

Po views this initiative as an evolution of traditional reserve practices, akin to holding gold:

Professor Lamont Po [07:30]: "I see this as the evolution of gold reserves. So if you think historically gold was viewed as a hard currency… I think Bitcoin could move into that category."

He acknowledges the potential benefits while cautioning about the volatility of cryptocurrency values:

Professor Lamont Po [07:30]: "I'm not suggesting that the federal government start betting on Bitcoin in the sense of investing it as a speculative asset, even though it will rise and fall in value."

Pennsylvania's Bold Bitcoin Investment

The conversation shifts to state-level initiatives, notably Pennsylvania’s legislative proposal to allocate up to 10% of its general fund to Bitcoin, potentially amounting to $900 million:

Professor Lamont Po [09:15]: "10%'s a large amount… they put that out just to give themselves some flexibility."

Po compares this strategy to diversified investment portfolios, indicating a cautious optimism:

Professor Lamont Po [09:23]: "It's a similar concept, even when you're looking at it from a state government perspective."

Global Perspectives: El Salvador’s Bitcoin Reserve

Drawing parallels, Po references El Salvador’s earlier adoption of Bitcoin as legal tender in 2021, highlighting the initial skepticism and subsequent validation through price cycles:

Professor Lamont Po [10:29]: "El Salvador has had a strategic bitcoin reserve since 2021… there was so much skepticism… now that we've come back into the bitcoin bull cycle, there's certainly reason for them to have the last laugh."

He underscores the global shift towards cryptocurrencies as alternative reserve assets amidst the uncertainty surrounding fiat currencies:

Professor Lamont Po [10:43]: "There's just a lot of questions about where fiat currencies are headed. And so other people are looking at bitcoin now as an alternative."

Cryptocurrency and Government: An Ironic Alliance

The episode explores the inherent irony of cryptocurrency, originally conceived as a decentralized alternative to traditional banking and government control, being integrated into federal reserves:

Professor Lamont Po [12:04]: "Bitcoin has always been seen… as a way to sort of get around the regular banking system… to have a currency that is separate from the man."

Despite this, Po notes the increasing institutional involvement in crypto over recent years:

Professor Lamont Po [12:25]: "Over the last five years in particular, we have seen more and more institutional involvement. So large financial institutions starting to invest in digital assets…"

He also expresses concern over political entanglement potentially undermining cryptocurrency’s foundational ideals:

Professor Lamont Po [14:15]: "Crypto ideally is apolitical. It is not government. For some people, it's even anti government or anarchist… the idea that this now becomes part of government, I think many of my students would be very skeptical."

The Satoshi Nakamoto Mystery

The episode touches on the enduring mystery of Bitcoin’s creator, Satoshi Nakamoto, referencing a claim from HBO's new documentary Money Electric: The Bitcoin Mystery that Peter Todd, a young crypto developer, is Nakamoto. Professor Po dismisses this speculation as likely a marketing stunt:

Professor Lamont Po [16:43]: "No. We talked about that in my class, too. As soon as that HBO show released, all my students came in. They were like, dude, they found them… I think it's a bit of a marketing stunt."

He contrasts the decentralized, community-driven nature of Bitcoin with the persona-driven politics of figures like Trump:

Professor Lamont Po [16:43]: "That's one of the beauties of bitcoin, is that it doesn't have that cult hero. And that's part of what I love about it."

Cryptocurrency as a Social Phenomenon

Professor Po reiterates his belief in cryptocurrency's future as a significant financial asset, emphasizing that its value is derived from the community's collective trust:

Professor Lamont Po [15:07]: "Money is really a social phenomenon. Crypto doesn't have value. The dollar does not have intrinsic value. It is only value that we associate with it as a community of people."

He hopes that the crypto community continues to thrive independently of political influences:

Professor Lamont Po [15:11]: "My hope is that that community continues to thrive, which will then mean the thriving of this digital ecosystem. And so I want to protect that. That's my highest incentive."

Conclusion

The episode concludes with a reflection on the current state of Bitcoin, noting its nearing $100,000 mark and the dual motivations driving its investors—both as a strategic reserve asset and as a speculative investment:

Professor Lamont Po [18:06]: "You've got other people who are just buying bitcoin because price go up and they have no intention of ever spending it. They just want to get rich, right?"

Dina Temple-Raston wraps up by highlighting the dual nature of cryptocurrency's integration into traditional financial systems and its foundational ideals of decentralization and community trust.

Key Takeaways

• Government Integration: Donald Trump’s initiative to establish a strategic Bitcoin reserve signifies a major shift in governmental approach to cryptocurrency, potentially positioning the U.S. as a leader in the crypto space.

• State-Level Investments: Pennsylvania’s proposal to invest a significant portion of its funds in Bitcoin reflects growing institutional interest and acceptance of cryptocurrencies as legitimate financial assets.

• Global Adoption: El Salvador’s early adoption of Bitcoin as legal tender serves as a precedent for other nations considering similar strategies amidst global economic uncertainties.

• Cryptocurrency’s Dual Identity: While originally conceived as a decentralized alternative to traditional banking, cryptocurrencies are increasingly intersecting with governmental and institutional frameworks, raising questions about their future autonomy and ideological purity.

• Community Over Centralization: Professor Po emphasizes the importance of the crypto community's role in maintaining the ecosystem's integrity, advocating for its continued independence from political and governmental influences.

Notable Quotes with Timestamps

• Professor Lamont Po [00:39]: "Money is really a social phenomenon. Crypto doesn't have value. The dollar does not have intrinsic value. It is only value that we associate with it as a community of people."

• Donald Trump [01:40]: "United States of America will keep 100% of all the Bitcoin the US government currently holds or acquires. This will serve in effect as the core of the strategic national bitcoin stockpile."

• Professor Lamont Po [07:30]: "I see this as the evolution of gold reserves… I think Bitcoin could move into that category."

• Professor Lamont Po [12:25]: "Over the last five years in particular, we have seen more and more institutional involvement. So large financial institutions starting to invest in digital assets…"

• Professor Lamont Po [15:07]: "Money is really a social phenomenon… It is only value that we associate with it as a community of people."

• Professor Lamont Po [18:06]: "You've got other people who are just buying bitcoin because price go up and they have no intention of ever spending it. They just want to get rich, right?"

This episode offers a comprehensive exploration of the intersection between cryptocurrency and government policy, providing listeners with nuanced insights into the potential trajectories of digital currencies within established financial systems.