If someone expressed the opinion that this year’s US presidential race has produced some unprecedented events, a listener might wonder which particular moment they were referring to, since it has been such a volatile and contentious political period. But besides the incumbent Joe Biden stepping down to be replaced as Democrat nominee by Vice President Kamala Harris, and the staggering scenes when Republican nominee Donald Trump came close to being killed in an assassination attempt, another wild-card insertion into the chain of unfolding events is the extent to which crypto has featured in the run up to the election.
Rewind back to the 2020 contest, and crypto was a fringe presence on the political stage, but now four years later, Trump has made a series of very direct, crypto-related pledges, including plans to use bitcoin as a US strategic reserve asset. Independent candidate Robert F. Kennedy Jr. has also incorporated bitcoin into his policies, with a reserve asset plan similar to Trump’s, and what’s more, Kennedy has now formally endorsed Trump while stepping down as a candidate in several swing states in order not to impede Trump’s chances of victory.
And when it comes to political funding, this year also breaks new ground, as data curated by non-profit consumer advocates Public Citizen from non-profit research group Open Secrets demonstrates enormous levels of politically-directed crypto industry spending.
Who Has Been Spending, and How Much?
In 2024, companies within the crypto industry have collectively spent around $119 million on political contributions, with almost all of that spending going to crypto-focused super PACs, of which the Fairshake organization has been the primary funding recipient.
Corporation contributions in US elections; Source: Citizen.org
To put that level of spending in context, this has made the crypto industry as a whole this year’s biggest corporate political spender, accounting for a substantial 48% of corporate donations. What’s more, looking at the numbers since 2010, when super PACs first became legally viable (following on from the Citizens United ruling in the Supreme Court), the only sector to have outspent crypto is the fossil fuel industry, which has splashed out over $176 million across the whole of this fourteen year period.
Crypto’s biggest spenders this year are Coinbase and Ripple, both of which have spent around the $50 million mark, while Jump Crypto also stands out with a $15 million spend. As for the primary crypto funding recipient, Fairshake is a super PAC that does not lean towards either political party, and is dedicated to the sole purpose of supporting political candidates who will assist in making the US a more receptive environment for blockchain development.
And notably, when considering the results of these levels of spending the deep-pocketed approach appears to be immediately paying off, as in the 42 Primaries in which crypto super PACs have played a role, 36 were won by the industry’s preferred candidates.
Why Is This Amount Being Spent?
One possible reason that crypto industry political spending has ramped up so starkly, is that there’s an urgent sense of crypto platforms in the US having their backs to the wall. The broad and growing perception has been that the SEC is waging war on crypto firms–with the commission often accused of employing a rule by enforcement approach. As such, US-based crypto projects have, arguably, reached a point at which political manoeuvring seems like an existential necessity.
There is a widespread industry belief that an anti-crypto strategy from the US authorities dubbed Operation Choke Point 2.0 is unofficially occurring–which again necessitates political solutions–and in fact, Donald Trump has specifically stated that he will end this operation if elected.
And Trump’s presence also leads to another relevant factor: the urge to take the political opportunity that is currently on the table. Trump is the first ever openly pro-crypto presidential candidate, and has given clearly defined crypto policy pledges. At the end of July he made a speaking appearance at Bitcoin Conference 2024 in Nashville, while the Trump family has been involved in and promoting a DeFi project called World Liberty.
Excited to announce the launch of @WorldLibertyFi! A new era in finance is here. #Crypto #DeFi 🇺🇸🇺🇸🇺🇸
— Eric Trump (@EricTrump) August 28, 2024
What’s more, Donald Trump and Kamala Harris are roughly neck and neck in the polls, and so there is a clear possibility that Trump can pull off victory, especially with a financial shove in the right direction courtesy of the crypto world.
Overall then, we have a confluence of factors forming a novel situation for crypto. On the one hand, it’s becoming ever-clearer that bitcoin has been legitimized as the leader within a new asset class. This is evident in the launch this year of spot BTC ETFs (not forgetting that the US also now has spot ETH ETFs), with BlackRock CEO Larry Fink enthusiastically talking up crypto in various interviews. At the same time though, the SEC continues to go on the offensive against crypto; the latest chapter being a Wells Notice issued against NFT marketplace OpenSea. The contradictions between these two scenarios look unsustainable, but there’s also-in Donald Trump-a pro-crypto candidate running for president, and additionally, Trump has specifically stated that he intends if elected to replace SEC Chair Gary Gensler.
That all in mind, if ever there was a time that it appeared logical for the crypto industry to prioritize politics, then this year might be just such a moment.
