How Crypto Politics Could Shape the Next U.S. Presidential Election

As cryptocurrency continues to gain mainstream acceptance, its influence on politics, particularly in the United States, is becoming increasingly significant. The 2024 U.S. presidential election is poised to be a battleground for crypto-related policies, with candidates from both major parties taking distinct stances on digital currencies and blockchain technology. This article examines the potential impact of crypto politics on the upcoming election, exploring how regulatory debates, campaign donations, and voter sentiments might shape the electoral landscape.

Growing Importance of Cryptocurrency in U.S. Politics

The acceptance of cryptocurrency donations by presidential candidates signifies a broader acceptance of digital assets in the political arena. According to a Harris Poll conducted on behalf of Grayscale in November 2023, nearly half of American voters expect to include crypto in their investment portfolios. This growing adoption of digital currencies is forcing presidential candidates to address crypto-related issues more prominently.

Impact of Cryptocurrency Policies on U.S. Presidential Elections

Cryptocurrency policies are more critical in the 2024 presidential election than ever before. Leading candidates are discussing crypto in their campaigns, a departure from previous elections where it played a minor role. Former President Donald Trump, previously skeptical about crypto, now accepts crypto donations and has even given a platform to cryptocurrency advocates like Messari CEO Ryan Selkis. This shift aims to attract voters who are anti-central bank digital currency (CBDC) and pro-crypto.

President Joe Biden’s campaign, on the other hand, claims to engage with cryptocurrency firms for policy guidance. However, Biden’s administration has generally been perceived as less supportive of the crypto industry. The approval of spot Bitcoin ETFs in January 2024 has made Bitcoin more accessible, potentially attracting new investors who may favor a pro-crypto president.

Crypto Campaign Donations and U.S. Politics

Between 2023 and May 2024, crypto industry donors contributed $94 million to federal election political committees. High-profile contributions, such as $70 million from Jeffery Yass to the Republican Party, highlight the growing financial influence of the crypto sector. The Federal Election Committee allows campaign committees to accept cryptocurrency donations, which must be valued at market price on the day they are received.

Political committees receiving significant crypto donations could influence their strategies, potentially promising crypto-friendly laws to attract more funds. Studies have shown that corporate campaign contributions can lead to favorable tax policies, suggesting that hefty crypto donations might result in politicians advocating for pro-crypto regulations.

Presidential Candidates’ Stances on Bitcoin Regulation

President Trump, who once called Bitcoin a “scam,” has softened his stance and now pledges to support crypto. His campaign accepts cryptocurrencies like Bitcoin, Ether, and Dogecoin. Trump has promised to secure the future of the crypto industry, ensuring its growth within the U.S.

President Biden’s administration has been more cautious, pushing for a 30% tax on crypto mining and stricter regulations. However, the pro-crypto pivot by Trump has influenced the Biden campaign to seek policy guidance from crypto experts.

Other candidates, like Robert F. Kennedy Jr., have embraced crypto contributions early on, committing to protect the rights of Americans to use and hold cryptocurrencies. Libertarian candidate Chase Oliver also supports cryptocurrencies, appealing to younger voters who are more inclined to invest in digital assets.

Crypto Sentiment and Voting Behavior

The 2024 election could see crypto sentiment significantly impacting voting behavior. With 7% of American adults using or holding crypto in 2023, candidates’ stances on digital currencies could sway a substantial voter base. States with high numbers of crypto holders, such as California and New York, predominantly voted for Biden in 2020. However, a shift towards a pro-crypto stance by Trump could change this dynamic.

A Harris Poll survey in swing states indicated that almost half of the respondents do not trust candidates who hinder cryptocurrencies. This sentiment could play a crucial role in deciding the election, especially with the U.S. crypto market projected to generate significant revenue in the coming years.

Influence of Crypto Lobbyists on U.S. Presidential Candidates

The year 2023 saw a record level of spending by crypto lobbyists ahead of the 2024 elections. Coinbase, the largest spender, contributed $2.16 million to lobbying efforts. The exchange’s CEO, Brian Armstrong, emphasized the importance of a pro-crypto stance in the 2024 elections, highlighting the potential political fallout of being anti-crypto.

Crypto lobbying efforts have led to the passage of bills that increase regulatory clarity, such as the Financial Innovation and Technology for the 21st Century Act and the Blockchain Regulatory Certainty Act. These legislative moves show a growing interest in crypto-first regulation, which presidential candidates cannot ignore.

Cryptocurrency Regulation Debates in the U.S. Presidential Race

Regulatory discussions around cryptocurrencies are set to become a focal point in presidential debates. Trump stresses the importance of the U.S. dollar and economic stability, advocating for stricter crypto regulations to minimize illicit use. However, his recent pro-crypto shift suggests a more balanced approach.

Democratic candidates, influenced by Biden’s cautious stance, are beginning to explore more favorable crypto policies. The potential introduction of a government-backed stablecoin (CBDC) could further complicate the regulatory landscape, with different states having to decide how to manage and use such an asset.

Digital Currency as an Election Issue in the United States

Trump’s recent acceptance of the crypto industry has positioned him as a pro-crypto candidate, encouraging voters to support his campaign to combat restrictive regulations. Biden’s administration has faced criticism from the crypto community, despite its recent attempts to engage with industry experts.

The SEC’s approval of spot Ether ETFs has further legitimized cryptocurrencies, signaling their growing influence in future elections. Investors and voters are increasingly looking for candidates who understand and support emerging technologies like cryptocurrencies and artificial intelligence.

Crypto Industry Support for U.S. Presidential Candidates

Trump’s pro-crypto shift has garnered support from various crypto entities. At a nonfungible token event, he pledged to prevent crypto companies from fleeing the U.S., earning praise from industry leaders like Tyler Winklevoss. In contrast, Biden’s veto of a bill allowing financial firms to custody cryptocurrencies drew criticism from the crypto community.

Polls indicate that a significant portion of registered voters who hold crypto plan to vote for Trump, reflecting the growing political power of the crypto community.

Conclusion

The 2024 U.S. presidential election is set to be heavily influenced by crypto politics. As candidates navigate the complexities of cryptocurrency regulation and campaign donations, their stances on digital assets could play a decisive role in shaping voter behavior. Regardless of the election’s outcome, the integration of cryptocurrency into politics is here to stay, ensuring that future campaigns will increasingly consider the interests of the crypto community.