I’m sure most of you have seen the story of Trump selling $400 gold sneakers. Many probably rolled their eyes or took the clickbait and read the news stories or even went to the website (I won’t link it, sorry) to see if it was true.

I had a different reaction though. I realized I’ve seen something like this before. Trump sneakers are based on the exact same premise as Bitcoin. How so? Let’s count the ways!

Tribal Assets

What’s a tribal asset? It’s a name I just invented! People have an instinctive desire to belong to a tribe, such as a nation or religion.

Nowadays, people choose tribes such as sports teams, social causes, or political affiliation. People who belong to a tribe like to show off their affiliation as a signal of their commitment, or, in some cases, rabid devotion.

In prior times, people hung flags to show patriotism or wore religious jewelry to display their affiliation. Today, people pay a premium for replica team jerseys to show their fandom.

The MAGA hat’s popularity wasn’t for its aesthetic. It’s a pretty generic hat. It’s popularity came from its ability to communicate that one belonged to the Trump tribe.

MAGA hats are plenty affordable. This makes sense as the goal is to increase the following and feel like you are part of a big tribe. There is no reason to limit supply.


But imagine there was a special limited edition MAGA hat designed to acknowledge the most ardent believers. Only ten would be made. They would be awarded by lottery, but you could only enter the drawing if you prequalified as a true loyalist through some show of allegiance.

What do you think that hat would sell for after the lottery? $1,000? $10,000? $100,000?

I bet it would be at least $100,000. There is special status in demonstrating you are one of the most devoted Trump followers on the planet. This would be a Tribal Asset.

Scarcity makes it extremely sought after. No, not in the same way as a luxury handbag. That is artificial scarcity to manipulate price and flash wealth. By contrast, tribal scarcity provides tribal status which is much more valuable.

The sneakers aren’t quite that scarce and don’t resonate in quite the same manner as the hat, but they are functioning in the same way.

A devoted Trump supporter spent $9,000 to get a pair. I suspect future sales will be for more.

The Bitcoin Tribe

Why do people buy bitcoin? Talk to a bitcoin holder. They don’t talk like someone who owns a stock or bond or even an iconic painting.

They talk like a member of a tribe. They are devotees. They will tell you all kinds of crazy stories about the perils of fiat money and why the dollar will collapse. They want to banish the Fed. They ignore evidence of the perils of hard money systems that have existed for much more of history than fiat systems.

How do they express this belief in the doom of fiat money? By creating an artificial asset with a fixed supply, i.e. Bitcoin.

Bitcoin is nothing but computer code. It has no intrinsic value.

At least you can wear the sneakers (though that will destroy their collectible value). At least you can look at a piece of art and have the social status of displaying something you have and others don’t.

If you truly are worried about the collapse of the dollar, there are other hard assets you can own. So why own Bitcoin?

For the tribal value. You want to belong to a club of like minded people who hold the same beliefs as you do.

Recruiting Converts

There is a reason Bitcoin owners gather in public forums to spread the gospel. They are preaching to potential converts. It’s a modern religion.

If I tout a stock, I can’t change its earnings. I can only hope to influence its valuation multiple.

Since bitcoin has no earnings to rely on to raise its value, it can only appreciate through expanding its valuation. This means finding more converts.

But this only works if supply is fixed so that new adherents have to keep driving the price up to reward the earlier converts.

If that sounds like a multi-level marketing scheme, well, it kind of is. Hey, at least I didn’t say the P word!

The problem is, as with Trump followers, there is a limit to how many people they can ultimately convert. And, eventually, the movement will likely end and people will find a new tribe to belong to.

Medium of Exchange vs. Collectible

Bitcoin advocates like to claim it’s a currency, but there is little evidence of this. You can’t buy much with it, other than novelty promotions. Attempts to make it a medium of exchange have all fizzled out.

It’s only true “use case” is for paying ransoms or laundering money. If people truly didn’t believe in the value of the dollar, they would ask to get paid in bitcoin instead.

Ironically, this is how the US dollar functions in foreign countries with truly debased currencies. People prefer dollars to Argentine pesos. The fact that bitcoin can’t even dislodge the dollar in these countries is proof it is not accepted as currency.

Rather, it is a collectible, like the Trump sneakers. Neither can buy actual goods or services. You own them in hope of selling them for more in the future.

Grifters Welcome

The other commonality between Trump sneakers and Bitcoin is they attract grifters looking to benefit themselves by allying with the cause.

Note, the man who paid $9,000 for the sneakers owns a luxury watch business. Do you know how much free advertising he’s received from the media coverage? That was the best marketing dollars he’s ever spent!

What about Bitcoin? There are crypto grifters everywhere from Terra to Binance to, of course, FTX. Think of the NFTs where people were able to sell “digital art” well above any rational value and, now, the Bitcoin ETFs.

If you want true evidence the Bitcoin has jumped the shark, look no further for proof than the arrival of ETFs. Wall Street is now extracting fees from people buying a worthless asset.

This is not a bullish development and it weakens the tribe by letting the less faithful in. It would be like giving away MAGA hats to “RINOs”.

Fool’s Gold

The promoters of Bitcoin and Trump sneakers have even resorted to the same imagery to market themselves to their followers – gold.

One calls itself digital gold while the other is painted gold. This is no coincidence.

People are naturally drawn to gold. That’s why, even though some will argue it also has no intrinsic value, this isn’t quite true.

People would rather have a vault of gold to look at than a vault of paper currency. Plus, you can wear your gold as jewelry, something you can’t do with computer code.

Similarly, if Trump painted his sneakers red, they would not have received the same media attention.

Fixed Supply

As mentioned earlier, to create a Tribal Asset, you need to fix its supply. This is true for any collectible, of course. The most valued baseball cards are the ones where few copies have survived.

But a Tribal Asset, in particular, needs a fixed supply to make its devotees desire it even more to prove their faith.

It is no coincidence Trump only sold 1000 pairs of the sneakers and that Bitcoin not just has a fixed supply, but only releases the supply gradually.

What can inspire more fervent loyalists than making them work to uncover more of the limited supply? Bitcoin mining is part of the indoctrination process. If you work that hard to gain more bitcoin, of course you will be an evangelist!

Confidence Game

Just like any asset bubble, Tribal Assets are dependent on confidence. In fact, more so. From a psychology perspective, inflating a Tribal Asset is a brilliant marketing tactic.

The tulip bubble would only last as long as people believed the price would keep going up. Sure, there was FOMO and greed and other emotions that irrationally drive traditional bubbles, but there was no greater good calling one to own tulips.

But a tribal bubble also adds a worldview. This is much harder for people to give up on when the price stops rising.

People will eventually admit Gamestop wasn’t worth $86 (it’s now $13). It’s a lot harder to get them to admit their whole belief system around politics or government corruption was fantasy and that they believed in something foolish. Nobody wants to admit that.

So tribal bubbles can continue longer than innovation bubbles. But they do eventually end.

I wouldn’t speculate in Trump sneakers and I wouldn’t speculate in Bitcoin. They are not tribes that have the durability of religions or nations.

If you’re going to buy a Tribal Asset, pick one that will stand the test of time.