The crypto community’s reaction to Javier Milei’s election as Argentina’s president is a case of misplaced enthusiasm.
Milei, a staunch libertarian and an advocate of the Austrian School of Economics – principles often revered in the crypto world – has elicited fervent applause from Bitcoin enthusiasts, including MicroStrategy Executive Chairman and noted Bitcoin evangelist Michael Saylor. CoinDesk and other publications even attributed a 3% spike in bitcoin’s price to Milei’s victory.
However, this excitement glosses over a significant ideological contradiction: Milei’s advocacy for dollarization, a fiat-based solution, contrasts starkly with the crypto ethos. Milei is hardly a crypto avenger of the Salvador President Nayib Bukele model. His attitude toward Bitcoin is quieter and more nuanced.
Milei’s commitment to libertarian ideals and the Austrian School of Economics aligns closely with the beliefs of many Bitcoin advocates. This school’s critique of centralized banking and government intervention in currency resonates deeply within the crypto community, often seen as a haven for those skeptical of traditional financial systems. Milei’s ideological background, therefore, made him a natural figure of interest for Bitcoin enthusiasts.
His political ideology, mirrored in his admiration for figures like Reagan and Thatcher and echoed in his campaign aesthetics, aligns him with other right-wing leaders like former Brazilian President Jair Bolsonaro and former U.S. President Donald Trump. On Tuesday, Trump posted a video congratulating Milei, saying that he can “make Argentina great again.”
Congratulations to Javier Milei on a great race for President of Argentina… pic.twitter.com/VPnwj7KYpu
— Team Trump (Text TRUMP to 88022) (@TeamTrump) November 21, 2023
Milei’s crypto stance
However, Javier Milei has remained largely non-committal about Bitcoin and cryptocurrencies. Despite his statement that “Bitcoin returns money to its original creator: the private sector,” Milei sidestepped questions about the central bank acquiring Bitcoin.
His plans to dismantle Argentina’s central bank further cloud his supposed pro-crypto position, contrasting starkly with his push for dollarization, which directly opposes the Bitcoin ethos of eschewing fiat currencies.
Despite his libertarian stance, Milei proposes dollarization as a solution for Argentina’s economic woes – a move that involves adopting the US dollar, a fiat currency. This proposal contrasts significantly with the principles of hard, sound money that Bitcoiners and followers of the Austrian School typically advocate. While acknowledging the superiority of the U.S. dollar over the Argentine peso, Milei’s approach fundamentally clashes with the push for decentralized, non-fiat currencies like Bitcoin.
Crypto community misinterpretations
Following Milei’s election, prominent crypto figures like Tether’s incoming CEO Paolo Ardoino and Balaji Srinivasan hailed Milei as a crypto champion, with Ardoino offering a simple “Wow” and Srinivasan declaring Milei as the “Second Bitcoin President,” probably referring to El Salvador’s Bukele as the first one. Saylor also congratulated Milei, posting on X, “Bitcoin is hope for Argentina.”
Media outlets like Decrypt followed suit, prematurely branding Milei as “Pro-Bitcoin.” CoinDesk linked a market surge late Sunday and early Monday to Milei’s victory, a connection that seemed more hopeful and speculative than substantiated.
This enthusiastic reception highlights a keen desire within the crypto community for political validation, often overlooking the subtler realities of political policies and positions.
Argentina’s economic struggles
In the backdrop of this ideological debate is Argentina’s dire economic situation, with a rampant 150% annualized inflation and over 40% of people living below the line of poverty. Milei’s proposed solutions, including dollarization, must be weighed against these realities. The crypto community’s support for Milei seems to downplay the complex economic challenges Argentina faces, imbuing his triumph with too much ideological importance. He will hardly be the leader to turn Argentina into a Bitcoin-focused haven, although his libertarianism could inspire innovation in Argentina’s blockchain community, if not beyond.
That possibility remains uncertain. Political leadership often only reveals itself over time.
Still, Milei’s advocacy for dollarization reveals a significant ideological disconnect and may serve as a reminder for the crypto community to engage in a more critical, comprehensive analysis of political figures and policies that may counter digital assets’ foundation principles.