The Tech Elites’ Takeover of Crypto is a Growing Threat to European Democracy

This post is part of a series of contributor perspectives and analyses called "The Coming Age of Tech Trillionaires and the Challenge to Democracy." Learn more about the call for contributions here, and read other pieces in the series as they are published here.

With Donald Trump’s presidential victory marked by Bitcoin’s price reaching an all-time high and the president launching his own coins ($TRUMP and USD1), the current administration is far more entangled with cryptocurrency than its predecessor. But as the cryptocurrency market becomes increasingly aligned with US political power, it calls for a discussion about what this era means for democracy more broadly.

While American dominance over the global cryptocurrency market has been the norm, other recent trends are increasingly at odds with the values upon which cryptocurrency was founded. Most notable has been a change in who shapes the narratives of cryptocurrency, as the tech elite has taken over from the tech enthusiasts. Figures like Elon Musk, Peter Thiel, JD Vance, and David Sacks are becoming the mainstream faces of cryptocurrency. This influx of the tech elite is bringing with it specific interpretations of what financial as well as democratic systems should look like. In this new context, the growing influence of cryptocurrency raises pressing questions about how it will shape—or undermine—democracies, especially those of the European Union.

Cryptocurrency’s origins

While cryptocurrency is commonly dated back to Bitcoin’s software launch in 2009, its origins stretch back to the 1980s, when discussions around ‘digital cash’ sought to tackle political concerns relevant to democracy. David Chaum’s papers on untraceable payments and transaction anonymity were rooted in the belief that, as credit card transactions became the norm, privacy had to be protected from government surveillance. These early ideas envisioned a decentralized digital currency, cryptocurrency, that could serve as an alternative source of finance that would empower people by helping to protect democratic principles such as freedom of expression and participation, public elections, and independent public opinion.

With the emergence of blockchain technology, a distributed public database/ledger, these ideas could be leveraged to facilitate cryptocurrency transactions in a manner that supported democratic values like transparency and accountability. Rooted in Silicon Valley’s techno-utopianism of the 1990s, cryptocurrencies promised a better society where money and value could flow between actors without the intermediation of banks.

Today, however, cryptocurrencies are being re-envisioned according to less utopian futures, as they seem increasingly focused on surviving crises rather than improving society. Bitcoin’s launch during the 2008 Financial Crisis highlights this historical connection between cryptocurrency and crisis, while announcements of an American strategic cryptocurrency reserve can be tied to fears of US monetary default. Such fears of default are fueled by growing concerns that the US national debt will hit its debt ceiling, alongside apprehension about corporate debt and student loans. If a US default were to occur, the value of the dollar would experience a sudden decrease as confidence in the American economy would shrink. Hence, in spite of cryptocurrency’s price fluctuations, some view a strategic reserve of an inflation-proof currency like Bitcoin as a potential financial safety net against the shocks of a collapsing fiat currency and the likely rush to alternative currencies.

It should, therefore, be of no surprise that cryptocurrencies have gained the attention of those who believe in (or desire) destructive crises where the entire banking system would collapse, attracting the ‘survivalist right’ and an apocalypse-fearing tech elite. But as this post-apocalypse currency becomes another tool in the tech elite’s survival kit (and in its investment portfolios), its original utopian and democratically oriented objectives are fading.

An elite takeover: Who rules cryptocurrency

With the ethos of cryptocurrencies and the blockchain being decentralization and freedom from government supervision, the notion that someone may ‘rule over’ a cryptocurrency or even exert the same level of centralized authority as with a fiat currency appears redundant. Yet, cryptocurrencies still hold political significance. As Finn Brunton explains: “Coins symbolize access to and control over tangible forms of value, physical manifestations of new sovereign orders.”

Cryptocurrencies manifest a particular order in the same way that the American Dollar, the Euro, the Chinese Yuan, and the British Pound uphold the interests of specific actors. On paper, a cryptocurrency-based order empowers the public, returning sovereignty to all those partaking in the market. But current events seem to indicate that cryptocurrencies are becoming dominated by the interests of the few. Beyond scandals ranging from accusations of celebrity-endorsed cryptocurrency rug pulls to FTX’s embezzlement case, the widening reach of the tech elite questions whether cryptocurrencies are as democratic and decentralized as promised.

The most notable example of this elite takeover is Elon Musk’s relationship to Dogecoin, whose price has at times been tied to Musk’s actions. Notable instances include price bumps during Musk’s purchase of Twitter, a spike following the announcement of Musk’s Department of Governmental Efficiency, and even fluctuations due to Musk’s 2021 appearance on Saturday Night Live. Albeit defending his public statements about Dogecoin as ‘jokes,’ Musk holds a form of authority over the currency, which, considering that he may have holdings in Dogecoin, relates to his own interests. While it can be argued that its ‘meme’ coin status makes it a unique case, Dogecoin currently holds the ninth greatest market cap on Forbes’ daily list of cryptocurrency prices, highlighting the power a single individual can have in promoting what was initially an obscure coin.

This individual authority is taken further with the 2025 establishment of World Liberty Financial by President Donald Trump and his sons. Aiming to be a cryptocurrency bank, the firm offers the president the dual position of being a major industry player while dictating what is allowed in the industry. Moreover, the tech elite is investing in World Liberty, including Ondo Finance, a start-up supported by Peter Thiel’s venture capital firm, as well as crypto-entrepreneurs who faced criminal investigations like Justin Sun or Arthur Hayes.

The resulting potential for price and market manipulation, as well as conflicts of interest, such as the ability of top $TRUMP buyers to win a dinner with the president, pose a clear threat to democracy. But just as worrying is the potential for power to be concentrated among the tech elite in a way that increasingly allows for operations like a 51% attack. A 51% attack occurs when a single entity or colluding group gains control of over 50% of the cryptocurrency blockchain’s hash rate (i.e., computing power). These actors can then block the confirmation of new transactions, rewrite part of the blockchain, and double-spend coins (i.e., use the same money twice). By obstructing cryptocurrency certifications and enabling corrupt actions, these attacks erode democratic principles such as accountability and transparency.

More broadly, without transaction verification and certification, a democracy cannot retain healthy levels of trust. If a group can manipulate the blockchain and double-spend as they please, users risk losing the trust they placed in the cryptocurrency itself as well as their trust in the rule of law and in democratic institutions. Moreover, these attacks challenge the ‘one person, one vote’ principle that not only defines democracy but also shapes the consensus mechanisms behind cryptocurrencies. By opposing the decentralized features of cryptocurrencies, 51% attacks erase their democratic potential.

At this time, due to their complexity and cost, 51% attacks have focused on small cryptocurrencies. Since the attacking actor requires large levels of computational power, which requires running costly mining rigs, the risk is minimized. But as the world’s wealthiest tech entrepreneurs venture into a market where Bitcoin mining is centralized (six mining pools produce over 80% of the blocks), there is a vulnerability for them to exploit, given the weakness of crypto-regulation.

As such, the American cryptocurrency market is shaping into a potential source of unregulated centralized power; authority at a scale previously inaccessible in traditional financial markets.

What does this mean for Europe?

With the US being the leading Western country in cryptocurrency adoption, ranking 4th globally in 2024, the elite takeover of cryptocurrencies can seem American-centric. Yet, actors like the EU face added challenges, most notably the emergence of a cryptocurrency-based order that does not reflect its values of democracy, along with the threat of foreign interference.

The EU’s current crypto-ecosystem is not only in its infancy but is also dominated by American cryptocurrencies. According to a report by the European Banking Authority (EBA) and the European Securities and Markets Authority (ESMA), USD-based stablecoins represented “nearly 90% of the total market capitalization of stablecoins” and “over 70% of the total volume of crypto-assets traded”. Meanwhile, on the user side, European cryptocurrency penetration remains low; the EBA-ESMA report found that 1.6% of the total EU population used Decentralized Finance (DeFi) compared to 2.2% of Americans. The gap widens for cryptocurrency ownership, where, in 2024, 15.5% of Americans owned cryptocurrency, while the closest EU Member State was Slovenia with 9.9%.

This low adoption rate and the absence of European-designed crypto-solutions present a challenge in ensuring that the EU’s democratic values are represented in the global cryptocurrency order. European DeFi projects are being developed, but undertakings like European cryptocurrency reserves are lacking and face reticence from the European Central Bank. The closest example would be the digital euro, which has been in its preparation phase since 2023 and would still be issued by central banks, forgoing cryptocurrency’s decentralized nature.

The main concern regarding the EU’s slow adoption of cryptocurrency is that, as it lags behind, other countries and organizations are already shaping the global cryptocurrency market according to their own, often American and Trumpian, visions. For example, World Liberty Financial signed a letter of intent with Pakistan’s Crypto Council (a government-backed initiative), and an Abu Dhabi investment firm used 2 billion USD worth of USD1 to invest in the crypto-platform Binance, highlighting how World Liberty is positioning itself as a vehicle for global political influence. Simultaneously, the EU’s lagging status is creating internal fragmentation as Member States like Malta and Luxembourg grant American cryptocurrency platforms licenses to operate in a bid to keep up with the evolving financial trends. The disagreements resulting from these decisions risk weakening the EU’s position, leaving the global crypto-based sovereign order to be influenced by an American tech elite whose visions of the future differ from European interpretations of equality, the rule of law, and economic growth.

Additionally, the EU faces heightened concern regarding the aforementioned challenge of blockchain manipulation. Although European blockchain companies are emerging, nearly 48% of all blockchain start-ups are based in the US alongside major blockchain developers (e.g., IBM, Microsoft, Coinbase). As such, a European crypto-ecosystem would currently be reliant on non-European technologies, exposing it to 51% attacks by foreign actors but also to hackable blockchains. Blockchain vulnerabilities have been mistakenly baked into the code, such as ZCash’s counterfeiting flaw, or through software client vulnerabilities - for instance, Bitcoin’s main client, Bitcoin Core, had a bug capable of crashing Bitcoin’s blockchain nodes. Not only do these vulnerabilities weaken European financial sovereignty, but as the EU explores blockchain applications in election verification, they also create a threat of foreign interference in direct democratic processes as well.

However, with the EU’s Markets in Crypto-Assets Regulation (MiCAR), a divergence is emerging as the EU’s role as crypto-regulator opposes the deregulated, free market approach taken by the US. Aimed at reducing the risks of crypto-asset purchases, MiCAR targets issues ranging from market integrity and manipulation to terrorism, money laundering, and the safeguarding of the blockchain. Consequently, it is setting guardrails against the exploitation of cryptocurrency by private interests. Beyond the potential clash with actors such as World Liberty, MiCAR is already being used to raise questions about Elon Musk’s relationship with Dogecoin and the related lack of regulation in the US. Encouraging accountability and the rule of law, MiCAR demonstrates an attempt by the EU to defend its democratic principles in the cryptocurrency market but requires additional legislative support and the accelerated development of the EU’s crypto-ecosystem.

As it stands, the low levels of European crypto-adoption are arguably working in the EU’s favor by reducing the risk posed by American technological dominance in the cryptocurrency sector. But with cryptocurrency gaining in popularity and governance frameworks remaining underdeveloped, the EU must urgently look beyond regulation and towards building resilient financial systems that address the risks of cryptocurrencies if it hopes to uphold its democratic values in an increasingly crypto-influenced world.