Opinion: Why Bitcoin maximalists view the SEC as an ally

It may seem paradoxical, but many bitcoin supporters welcome the U.S. Securities and Exchange Commission’s (SEC) lawsuits against cryptocurrency exchanges Coinbase and Binance.

Earlier, Swan Bitcoin CEO Cory Klippsten, in a comment to Fortune called the SEC’s stance toward cryptocurrencies “consistent”, and Strike’s head of payments Jack Mallers said that Chair Gary Gensler is trying to “protect the integrity of America’s financial markets”.

Both раскритиковали Coinbase for listing altcoins and назвали Binance an offshore exchange that trades unregistered securities. Such a stance is supported by prominent figures in the bitcoin community, including Макса Кайзера, Сэмсона Моу, Мэтта Оделла and others.

According to Nick Carter, partner at Castle Island Ventures and cofounder of Coinmetrics, such behaviour by bitcoin gurus turns the first cryptocurrency into a cult:

«There are “those who use Bitcoin”, also known as Bitcoiners (the majority). And there are people who have turned Bitcoin into a secular cult. Let’s call the latter laser eyes, maxis or something else; it doesn’t matter. They know who they are, and we know who they are. There is no ambiguity here — these are people who have turned Bitcoin from a tool into a system of beliefs and a way of life», — says Carter in a Twitter thread.

He argues that the vast majority of cult adherents are newcomers, late to the 2021 rally, who believe in the Stock-to-Flow model and Bitcoin’s superiority to “shitcoins” and fiat:

«Just by contributing a tithe to Bitcoin each month, you can effect a financial transformation in a more just world. When fiat and everything else collapses, you will be among the few chosen, rulers among the ruins».

According to Carter, Coinbase and Binance together attracted 100-200 million people, making for mass adoption of Bitcoin more than any other company. Yet laser eyes welcome government attacks on these platforms, because “they look at crypto bearishly rather than Bitcoin bullishly”, and most of them lost money after entering the market in 2021 and 2022:

«So what attracts these people to Bitcoin? Simply, a secular cult. It is the lifestyle of people on the margins of society who, in other circumstances, would be conspiracists, “gold bugs”, radical libertarians, etc. They are usually dissatisfied with the status quo and blame central banks, interest rates, and, ultimately, the “fiat culture” for all the problems».

Carter argues that bitcoin maximalism is not a “religion”, but literally a religion. Its adherents believe that Bitcoin was created in a unique, perfect and fair way, and nothing can compare with it. Only the divine Proof-of-Work of Satoshi and the absence of a premine can foster truly global, decentralised money.

In the worldview of laser eyes, Carter highlights several religiously resonant motives:

• salvation. Any sin, no matter how dreadful, is forgiven if you repent, renounce sh**itcoins and embrace Bitcoin;
• religious texts. White paper Satoshi and his forum posts, as well as exegesis like Saifedean Ammous’s “The Bitcoin Standard”;
• tithe. Buy satoshis every two weeks, even if you lose money. You are still doing good, because it benefits the Church of Bitcoin;
• eschatology. Fiat apocalypse/hyperinflation/great debt bubble is coming, and there will be no financial asset left but Bitcoin. After the ascension, the earth will be inherited by Bitcoiners, and with a handful of satoshis you could buy entire neighborhoods. Today you are a mere pleb, but tomorrow — a baron;
• rituals. Make a pilgrimage to El Salvador to make a payment via Lightning Network in McDonald’s; attend a Bitcoin conference in Miami; listen to the same podcasts with the same guests week after week; troll no-coiners and shitcoiners on Twitter; tell your story of how you first encountered Bitcoin; recruit new adherents to the cult.

What does this have to do with Binance and Coinbase? While both platforms have done more to promote Bitcoin’s adoption and accessibility than other companies in the industry, they are “unclean” for supporting other cryptocurrencies.

According to Carter, the bitcoin-maximalist position recalls early tweets by Coinbase CEO Brian Armstrong. At that time, he had not yet realised that survival in the market requires building what people want, not catering to a minority of fanatics.

«That is why you won’t find maxis building real companies. To be a founder means to accept market realities, not impose your ideology on the world», — says Carter.

Binance and Coinbase may have made dubious decisions about listings and products on offer. But it was they who helped drive mass adoption of Bitcoin:

«Laser eyes see the world differently. They are not focused on Bitcoin’s success, but want to live in “a pure world”, where the first cryptocurrency is marginal and niche, and all competitors have failed.

In a fallen world, where other cryptocurrencies also thrive, one must admit: Bitcoin was not special, but merely one of many tools. Moreover, some of them proved more successful and adaptable. Their god was false: the foreseen future did not come and never will».

Carter invites readers to imagine a Christian who “stands before the gates of heaven and realises that God turned out to be Allah, Krishna, Zeus or Thor.” He sees sinners and pagans who ascend the stairs to the holy gates. This, Carter believes, resembles the moment of realising that the maxi bet on the wrong horse:

«In a fallen world, it will become clear that laser-eyed people never had any special knowledge. Their revelations were shadows and illusions, and the gurus—false prophets. This crisis of faith is too painful, so the maximalists pray and hope for the collapse of all shitcoins and unclean competitors».

Thus, Carter adds, Binance and Coinbase have increased Bitcoin’s market capitalization by tens or hundreds of billions, but did so wrongly. They sinned by adding support for other coins, allowing Ethereum, Solana and XRP to thrive:

«The greatest sin of crypto exchanges is to be polytheists in a monotheistic world. For that they deserve to be destroyed. Even if Binance runs the largest P2P market in the Global South. Even if Coinbase has fought Bitcoin regulation for more than a decade. Even if these companies hold more Bitcoin for their users than anyone else. It doesn’t matter, for they are unclean».

Carter notes that laser-eyed reactions to the Coinbase and Binance attacks are telling: they do not care about industry progress and Bitcoin adoption; they do not care about the 100 million users of these exchanges. The maximalists allegedly despise government authority, but are happy to use it against their foes.