German Developer Gets Rich Off Bitcoin, Backs Party That Wants It Traceable
German software developer Moritz Schmidt has made millions from investing in the world's number one crypto, but when he made what turned out to be one of largest political donations in the country’s history, he bet on a party that is considering to make bitcoin (BTC) “traceable” in Germany, potentially disrupting its use.
In an uncommon move in Germany, Schmidt donated some EUR 1m (USD 1.2m) to the Alliance '90/The Greens bloc, widely known as the Greens, a political movement that could unseat Chancellor Angela Merkel in the forthcoming September 26 general election.
The 39-year-old told the AP he invested several thousand euros in bitcoin back in 2011, shortly before the cryptocurrency crashed, erasing 90% of his holding’s value.
However, since then, bitcoin’s value has skyrocketed, allowing Schmidt to generate about EUR 2m (USD 2.4m) from his initial modest investment by gradually selling the cryptocurrency.
“I have benefitted immensely from the bitcoin bubble. It’s been a wild ride, and the proceeds are unearned riches really,” the developer said. “I’ve been sort of waiting for the right opportunity to donate a larger sum.”
Schmidt argued that in 2017 he learned bitcoin was consuming a massive amount of electricity, which encouraged him to support a party that advocates the fight against climate change and environmental policies to curb greenhouse gas emissions.
The developer decided to support the Greens' campaign instead of donating it to an environmental group because “giving it to a political party that has environmentalism as its core value will have a much bigger impact.”
The Greens do not mention bitcoin's effect on the environment in their election program, the AP noted, but they do want to see cryptocurrencies “traceable,” which may turn them much less attractive to users and investors in Germany.
Schmidt said he doesn't think "regulation will do anything unless it crashes the price down to levels that make bitcoin uninteresting as an asset and unusable as a global currency. [...] I believe that, in effect, bitcoin will need to be banned."
The latest opinion polls indicate a relatively tight race between Merkel’s Christian Democratic Union of Germany (CDU), which put her in power in 2005, and the Greens, with 26% and 23% in popular support on April 23, respectively.
The latter party has nominated one of its two co-chairs, Annalena Baerbock, as their candidate for Germany’s chancellor - for the first time in history having "a realistic chance of becoming the main political powe" in the country's federal government, reported the DW. Per this report, the party is now stable with over 20% in the polls, which makes it Germany's second-biggest party, closing in on Merkel's "conservatives currently in disarray."
Whichever movement wins the upcoming election, it will most likely need to form a coalition government with smaller partners. Another possibility for the CDU, its sibling the Christian Social Union in Bavaria (CSU), and the Greens would be to form a coalition government similar to their effort in Germany’s state of Hessen where they have ruled together since 2014.
Political donations by crypto traders and businesses are only starting to gain foothold in Europe, but they are already part of the political landscape in the US. The Intercontinental Exchange (ICE), the operator of the New York Stock Exchange and bitcoin derivatives platform Bakkt, was one of the biggest backers of the former President Donald Trump’s reelection campaign, giving it USD 1m.
This contrasted with the political views of Sam Bankman-Fried, the head of crypto derivatives exchange FTX, who injected USD 5.2m to fund President Joe Biden’s campaign for the presidency.
At pixel time, BTC trades at USD 53,530. It is up by 6.6% in a day and down 5.85% in a week.
- Germany’s Biggest Bank Talked the Talk, Now it Walks the Crypto Walk
- Listed German Cannabis Firm to Buy Bitcoin, Slates Euro and USD
- Knife-edge Biden-Trump Showdown Has Crypto Backers on Both Sides