If someone suggested that this year’s US presidential race had brought unprecedented events, the listener might wonder what moment they were referring to, given that it has been such a volatile and contentious political period. But beyond the resignation of incumbent Joe Biden to be replaced by Vice President Kamala Harris as the Democratic nominee, and the stunning scenes of Republican nominee Donald Trump’s near-assassination, another surprising moment in the unfolding chain of events was the extent to which cryptocurrency figured in the run-up to the election.
Fast forward to the 2020 election, and cryptocurrency was a fringe phenomenon on the political scene, but now, four years later, Trump has made a number of very direct promises related to cryptocurrency, including plans to use Bitcoin as a strategic reserve asset for the United States. Independent candidate Robert F. Kennedy Jr. has also included Bitcoin in his policies, with a reserve asset plan similar to Trump’s, and what’s more, Kennedy has now officially endorsed Trump, dropping out of several swing states so as not to hamper Trump’s chances of winning.
In terms of political funding, this year also breaks new ground, as data compiled by consumer advocacy nonprofit Public Citizen from nonprofit research group Open Secrets shows massive levels of politically motivated spending in the crypto industry.
Who spent and how much?
In 2024, crypto companies spent a total of about $119 million on political donations, with nearly all of that spending going to crypto PACs, with Fairshake being a major recipient of funding.
Putting that level of spending into context makes the crypto industry the single largest corporate political spender this year, accounting for a whopping 48% of corporate donations. What’s more, if you look at the numbers since 2010, when super PACs first became legally viable (following the Citizens United Supreme Court decision), the only sector that has spent more crypto is the fossil fuel industry, which has spent more than $176 million over that entire fourteen-year period.
The biggest crypto spenders this year were Coinbase and Ripple, both of which spent around $50 million, while Jump Crypto also stood out with $15 million in spending. As for the main recipient of crypto funding, Fairshake is a super PAC that does not lean toward any political party and is dedicated to the sole purpose of supporting political candidates who will help make the U.S. a more receptive environment for blockchain development.
And remarkably, given the results of these spending levels, the deep savings approach appears to be paying off immediately, as of the 42 primaries that crypto super PACs have entered, 36 have been won by candidates popular in the industry.
Why is such a sum being spent?
One possible reason why crypto industry political spending has skyrocketed is that there is a strong sense that crypto platforms in the U.S. have their backs to the wall. A widespread and growing perception is that the SEC is waging war on crypto firms, with the commission often accused of using rule by coercion approach. Thus, American crypto projects may have reached a point where political maneuvering seems an existential necessity.
There is widespread speculation in the industry that the US government is unofficially implementing an anti-crypto strategy dubbed Operation Choke Point 2.0, which again requires political action. In fact, Donald Trump has explicitly stated that he would end the operation if elected.
And Trump’s presence also brings up another important factor: the desire to seize the political opportunity that’s on the table. Trump is the first openly pro-crypto presidential candidate in history, and has made clear promises on crypto policy. In late July, he gave a speech at the Bitcoin Conference 2024 in Nashville, while the Trump family has been involved in and promoting a DeFi project called World Liberty.
We are excited to announce the launch of @WorldLibertyFi! A new era in finance is here. #Crypto #DeFi 🇺🇸🇺🇸🇺🇸
— Eric Trump (@EricTrump) August 28, 2024
Moreover, Donald Trump and Kamala Harris are running fairly evenly in the polls, so it’s likely that Trump will win, especially with a financial push in the right direction from the crypto world.
Overall, we have a confluence of factors shaping a new landscape for cryptocurrency. On the one hand, it is becoming increasingly clear that Bitcoin has been legitimized as the leader in a new asset class. This is evident in the launch of BTC spot ETFs this year (not to mention that the U.S. now has ETH spot ETFs as well), and BlackRock CEO Larry Fink has enthusiastically spoken about cryptocurrency in various interviews. At the same time, the SEC continues to press against crypto; the latest chapter is Wells’ notice issued against the NFT marketplace OpenSea. The contradictions between these two scenarios seem tenuous, but then there’s Donald Trump, a pro-crypto candidate running for president, and Trump has specifically stated that he intends to replace SEC Chairman Gary Gensler if elected.
Given all this, if there was ever a time when it seemed logical for the crypto industry to prioritize politics, this year might be that moment.
