The intersection of cryptocurrency and politics is poised to significantly influence the 2024 United States presidential election. As digital currencies gain mainstream traction, candidates’ stances on crypto regulation and blockchain innovation could sway voters.
This article explores how crypto politics might shape the electoral landscape, redefine campaign strategies, and the overall impact on the next U.S. presidential election.
Overview of the growing importance of cryptocurrency in U.S. politics
Presidential candidates beginning to accept cryptocurrency donations signals a growing acceptance of digital assets in the political sphere. While crypto donations hardly endorse digital assets in the world of politics, they’re a sign of something larger: adoption.
According to a Harris Poll taken on behalf of Grayscale in November 2023, 47% of American voters expect crypto to enter their investment portfolio in some fashion. This number — paired with the approval of Bitcoin and Ether spot exchange-traded funds (ETFs) — paints the future of cryptocurrency in a positive light.
As investors continue to embrace cryptocurrencies, discussions around regulation will surely be prevalent — paving the way for political discourse and, most importantly, forcing presidential candidates to pay attention. This article discusses cryptocurrencies’ increasing impact on U.S. politics and how they’ll shape the 2024 election.
Impact of cryptocurrency policies on U.S. presidential elections
Cryptocurrency policies are a bigger factor in 2024’s presidential election than ever before. This is the first election where leading candidates are prominently discussing crypto, despite its small role in previous campaigns such as Andrew Yang’s.
For example, former President Donald Trump (previously known for his crypto skepticism) now accepts crypto donations for his campaign and has given cryptocurrency industry defenders such as Messari CEO Ryan Selkis a platform to speak about their beliefs. This is the start of his effort to attract the anti-central bank digital currency (CBDC) and pro-crypto vote.
As for current President Joe Biden, his campaign claims to be speaking with cryptocurrency firms to seek guidance on good “crypto community and crypto policy moving forward.” However, many believe Biden stands staunchly against the crypto industry.
Either way, a presidential acknowledgment of cryptocurrencies should come as little surprise considering the approval of spot Bitcoin ETFs in January and hints at future pro-crypto policies on either side of the political spectrum. As a result, Bitcoin (BTC) is now available on traditional exchanges next to stocks and other investment alternatives.
Not only does this regulatory decision legitimize crypto assets in the eyes of the government, but it also makes Bitcoin more accessible than ever before. Such accessibility will surely attract new investors who may vote for a president claiming to protect their new asset class.
Crypto campaign donations and U.S. politics
Crypto industry donors have contributed $94 million to federal election political committees between 2023 and May 17, 2024. Notable contributions include $70 million from Jeffery Yass to the Republican Party.
The Federal Elections Act allows a campaign committee to accept:
“…gift(s)…or deposit of money or anything of value made by any person for the purpose of influencing any election for Federal office…”
In the Advisory Opinion 2014-02, the Federal Election Committee determined that Bitcoin can be classified as “money or anything of value,” so it allowed federal political committees to receive Bitcoin contributions. A political committee that receives the Bitcoin must value it at the market value on the day it receives it and declare it like any other contribution.
Political committees receiving significant crypto campaign donations could influence their political strategy. A study of data from 48 different U.S. states shows that $1 in corporate campaign contributions led to $6.65 in lowered state corporate taxes.
Another 2008 study on lobbying and taxes by Richter, Samphantharak and Timmons found that a 1% increase in lobbying expenses could see an organization’s tax rate reduced by between 0.5 and 1.6 percentage points. Hefty crypto contributions might lead to politicians increasingly promising crypto-friendly laws in a bid to acquire more funds.
Presidential candidates’ stances on Bitcoin regulation
In 2021, President Trump said Bitcoin “seems like a scam,” as it competed against the dollar, calling for more regulation against cryptocurrencies. In 2019, he tweeted “I am not a fan of Bitcoin and other Cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air. Unregulated Crypto Assets can facilitate unlawful behavior, including drug trade and other illegal activity….”
President Trump has since softened his stance against cryptocurrencies. Earlier in May 2024, he pledged to support crypto, and on May 21, his campaign announced that it would start accepting cryptocurrencies like Bitcoin, Ether (ETH) and Dogecoin (Doge). At the Libertarian National Convention, he promised to secure the future of the crypto industry, ensuring its development and growth occur in the U.S. and not overseas.
President Biden’s administration has traditionally been considered as indifferent to crypto. However, the White House has pushed for a 30% tax on crypto mining and passed an executive order directing stiffer regulation on March 22, 2022.
Its stance changed after Trump’s campaign pivoted favorably toward cryptocurrencies. Since then, members of the Democratic Party in Congress have voted in favor of crypto, and the president’s campaign is seeking policy guidance by reaching out to industry insiders and crypto experts.
Robert F. Kennedy Jr’s presidential campaign was the first to accept crypto contributions, and he committed to protecting Americans’ right to use and hold them. Additionally, Libertarian Party presidential candidate Chase Oliver also supports cryptocurrencies.
Promises to support the crypto industry might help a candidate galvanize a new voter base comprised of younger voters who are the most inclined to invest in crypto. In 2024, 8 million youth will reach voting age, for a total of 41 million eligible Generation Z voters.
How crypto sentiment could affect voting behavior
The difference in the popular vote between Biden and Trump in the 2020 election was about 7.05 million.
The U.S. Federal Reserve reported that 7% (18 million) of American adults used or held crypto in 2023. The states with the highest cryptocurrency holders per 2023 data are California, Colorado, New Jersey, New York and Washington. All these states voted for President Biden in 2020.
Crypto holders feel alienated by traditional financial systems, so any candidate perceived as sympathetic to their interests could gain their favor. If Biden were to shun cryptocurrencies and Trump came across as more welcoming, he could claw back some votes.
A 2024 Harris Poll survey in swing states reported that almost half of the respondents said they don’t trust candidates who hinder cryptocurrencies, with 30% asserting they are more likely to support a candidate who is friendly toward the crypto industry.
According to Statista, the U.S. crypto market is projected to rake in $23.2 billion in revenue in 2024 and the global market could be worth $200 trillion by 2034. Any candidate unwilling to support this industry is likely to lose votes, with disgruntled investors deciding to vote for any candidate who does to protect their investments.
Influence of crypto lobbyists on U.S. presidential candidates
The year 2023 was a record year for crypto lobbyists ahead of the 2024 elections. Coinbase was 2023’s largest spender, with $2.16 million contributed to lobbying.
Coinbase CEO Brian Armstrong stated in December 2023: “Being anti-crypto is a really bad political strategy going into 2024,” noting that the Stand With Crypto Foundation has close to one million supporters alongside its $87 million in donations. The exchange largely pushes for clearer tax reporting requirements and classification of digital assets.
Coinbase and other crypto entities donated most of their funds to the Fairshake Political Action Committee (PAC) — the sector’s most prominent political group. According to OpenSecrets.org, the group’s largest presidential donation went to former Republican Party presidential candidate Vivek Ramaswamy. Ramaswamy dropped out of the presidential race in January 2024, though he is arguably the most prominent pro-crypto candidate so far.
In July 2023, lobbyists convinced lawmakers to vote for two crypto bills that would increase regulatory clarity: the Financial Innovation and Technology for the 21st Century Act and the Blockchain Regulatory Certainty Act. The former will clarify when crypto firms can register with the Commodity Futures Trading Commission (CFTC) or the Securities and Exchange Commission (SEC), while the latter articulates “what blockchain-related entities qualify as money transmitters.”
While these two bills are not directly supported by presidential candidates, they show an increased interest in pushing crypto-first regulation from governmental entities — an interest that presidential candidates would do well to notice.
Cryptocurrency regulation debates in the U.S. presidential race
As cryptocurrencies become more prevalent, regulatory discussions are set to become more prominent in presidential debates.
Trump often stresses the importance of the U.S. dollar, focusing on economic stability over the volatility associated with cryptocurrencies. As a result, Trump’s largest crypto concern is illicit use. By enforcing stricter crypto regulations, the Republican candidate wants to minimize illicit use and stabilize asset prices through increased control.
According to the Harris poll mentioned above, Republicans believe inflation is the largest issue in America today, with Bitcoin viewed as a hedge against inflation in many circles. If Trump delivers on making the U.S. a global leader in crypto development, the asset’s hedge potential could push voters toward the Republican side.
Before dropping out of the presidential race in early 2024, Florida Governor Ron DeSantis signed a bill in May 2023 preventing the use of CBDCs in the state. DeSantis claimed it was a response to Biden’s 2022 Executive Order, which hinted at a potential government-issued CBDC.
Framing this ban as a move toward decentralization, DeSantis said: “This is something that will be a massive transfer of power from individual consumers to a central authority. And that’s just fundamentally antithetical to a free society.”
Of course, if talks of a CBDC continue, DeSantis’ fears may become a reality. Should any U.S. president issue a government-backed stablecoin, each state will have to decide how to regulate and use the asset. Some citizens may view a CBDC as antithetical to crypto, while others might appreciate the real-world use of blockchain technology.
Digital currency as an election issue in the United States
After years of expressing skepticism about cryptocurrency, Trump has expressed his acceptance of the industry, going as far as proclaiming himself the pro-crypto candidate. He encouraged voters to support his candidacy if they wished to see cryptocurrency innovation driven on U.S. soil. Following this, his campaign asked voters to contribute using crypto to help him fight against what he described as restrictive regulations imposed by the Biden administration.
Biden has taken a dim view of crypto, but pro-crypto revolts in his party and the change in stance of the Trump campaign have altered the Biden administration’s approach to crypto. All these events happened in May 2024, signaling a shift in the perception of crypto among politicians and the sudden prominence of the industry in political discussions.
In a related move, the SEC approved spot Ether ETFs on May 23, 2024, surprising many industry experts and even the CEO of VanEck, who had not anticipated the approval. As the cryptocurrency industry continues to expand, it will likely influence future elections.
Before investors consider investing in digital currency, it is crucial that they educate themselves about it.
Crypto industry support for U.S. presidential candidates
As previously mentioned, Trump’s pro-crypto shift has garnered positivity from various crypto entities. Crypto enthusiasts point to a single reason for this shift: the “guy in the goggles,” Malcolm DeGods.
DeGods spoke with Trump at the former president’s nonfungible token event in Mar-a-Lago in May, asking Trump how he would keep crypto companies from fleeing the United States. Trump’s response: “We’ll stop it.” Gemini co-founder Tyler Winklevoss supported this message, posting on X: “The guy in the goggles has completely reversed crypto’s fortunes in Washington. Well done sir.”
Meanwhile, at the end of May, President Biden vetoed a bill that would allow financial firms to custody Bitcoin and other cryptocurrencies, claiming this act would “jeopardize the well-being of consumers and investors.” Staff Accounting Bulletin 121 (SAB 121) was introduced by the SEC, and Biden’s denial drew criticism from the crypto community.
In an X post, Ripple CEO Brad Garlinghouse said, “To say that this is incredibly disappointing from this white house - at an incredibly pivotal time - is an understatement.” The decision came just days after the Biden campaign’s claim that it would seek guidance from top crypto firms and individuals on proper crypto-first regulation and just one day after Trump’s conviction.
According to a March poll from Paradigm, 48% of registered voters who hold crypto plan to vote for Trump, while 39% plan to vote for Biden.
Future outlook on cryptocurrency’s role in U.S. politics
Regardless of 2024’s presidential outcome, it’s hard to imagine the political role played by crypto going anywhere. The 2024 crypto wins, such as the SEC’s spot Ether ETF approval, signal that more investors will get involved with digital assets.
The previously mentioned Harris Poll revealed that 73% of surveyed individuals want presidential candidates to have an understanding of emerging technologies like cryptocurrencies and artificial intelligence. Furthermore, one in three U.S. voters claimed that a candidate’s crypto stance would sway their voting decisions.
This isn’t to mention the consistent lobbying by companies and crypto industry actors such as Coinbase. These entities continually pressure lawmakers toward positive crypto regulation while calling for SEC Chair Gary Gensler’s resignation.
Former candidate Ramaswamy’s crypto policy framework serves as a foundation for future candidates to build off of, while independent candidate Kennedy Jr. vows to ensure “America remains the hub of blockchain technology.” If 2024 is anything to go by, cryptocurrencies’ momentum will carry it into future political campaigns, ensuring the industry is here to stay and that its participants will not settle for anything less.
Written by Max Moeller, Tanuj Surve