Bitcoin Allies Pull Back From Trump After Minneapolis Shooting Tests Civil-Liberty Red Lines

A coalition that rallied around friendlier crypto policy is now straining over civil liberties. After the fatal shooting of ICU nurse and legal observer Alex Pretti in Minneapolis, some influential Bitcoin voices are signaling a recalibration of their stance toward the Trump administration.

Authorities said two Border Patrol officers fired the shots during protests over immigration roundups in the Twin Cities. The administration’s framing turned the temperature up: White House Deputy Chief of Staff Stephen Miller labeled Pretti a “would-be assassin.” That characterization, combined with questions from U.S. Secretary Scott Bessent on ABC’s “This Week” about why Pretti was armed, triggered backlash from figures who traditionally prize individual rights.

Bruce Fenton, a self-described cypherpunk who has led Chainstone Labs and ran for U.S. Senate in New Hampshire in 2022, posted a video criticizing what he views as an attack on First and Second Amendment protections. He noted Pretti’s weapon was legally owned and reportedly removed amid the skirmish preceding the shooting, and said the episode made him reluctant to identify with Republicans. Fenton’s roots go back to Bitcoin’s libertarian phase, where censorship resistance and financial self-sovereignty were core to the culture.

Others echoed unease. Ethereum co-founder Vitalik Buterin warned that once a heavy-handed enforcement apparatus is normalized, it tends to expand its target set—arguing violence had moved from undocumented immigrants to American defenders of immigrants. David Marcus, CEO of crypto payments platform Superstate, said people can be appalled by citizens being shot in the street regardless of protest intent.

These reactions collide with a recent history of pragmatic alignment. When President Trump pardoned Silk Road founder Ross Ulbricht a year ago, libertarians saw a long-sought concession that validated their movement. Many in crypto also felt the SEC under former chair Gary Gensler had placed a boot on the industry’s neck, and they perceived meaningful relief under Trump. That backdrop explains why attorney John Deaton, now again running for U.S. Senate in Massachusetts, described the community’s political posture as pragmatic rather than devotional. He said many Bitcoiners are wrestling with a hierarchy of values—especially when the Second Amendment appears to be questioned.

Deaton also flagged speech and due-process concerns. The Department of Homeland Security has warned that repeatedly likening ICE to the Gestapo could carry “consequences,” raising a First Amendment debate. An internal ICE memo obtained by the Associated Press this month reportedly authorized agents to enter homes without a judicial warrant, prompting Fourth Amendment alarms among civil libertarians.

Here’s the real tension point: a movement built on permissionless systems falters when it tolerates selective rights. Bitcoin’s ethos assumes clear constraints on state power and predictable rule of law; it is both a hedge against arbitrary authority and a network that flourishes when on-ramps, custody, and stablecoin rails operate inside consistent legal frameworks. If an administration appears to blur those lines—on speech, self-defense, or search—it forces a re-prioritization. Builders with cypherpunk DNA gravitate back to self-custody and censorship-resistance narratives; institutions and exchanges, meanwhile, may still favor policy tailwinds that de-risk operations.

That divergence helps explain a curious data point: despite the criticism, Trump’s approval rating on Myriad, a prediction market run by Dastan, ticked up in recent days to nearly 56% after spending most of November and all of December underwater. Traders often price the policy delta more than the cultural backlash, expecting continued relief on enforcement and rulemaking even as community leaders reassert civil-liberty red lines.

For founders and funds, the lesson is straightforward: - Don’t anchor strategy to a single political patron; maintain jurisdictional and regulatory optionality. - Treat civil liberties as part of the industry’s risk framework, not a side debate. Erosion there eventually bleeds into custody rights, developer liability, and transaction privacy. - Expect narrative volatility: “policy relief” trades can be whipsawed by incidents that reignite sovereignty and rights discourse.

This episode isn’t the end of an alliance; it’s a renegotiation. Whether the détente holds will hinge on follow-through: how the administration addresses ICE authorities, DHS rhetoric, and the facts of the Minneapolis shooting after a full investigation. In crypto, credibility compounds—so does inconsistency.