The history of cryptocurrency development is a history of innovations and contradictions. From the birth of Bitcoin in 2009 to the existence of thousands of cryptocurrencies, cryptocurrencies have gone through disbelief, and regulations and are gradually becoming mainstream. As cryptocurrencies' value and number of proponents grow, the emerging technology seems to be one of the deciding factors in the upcoming presidential elections in the US. In this article, we will review what influence the candidates’ attitudes towards cryptocurrencies have on their chances to win the race.
Regulation and Policy Proposals
Let’s start with some context on US crypto regulations and policies.
The U.S. government regulates the cryptocurrency market through several agencies, including the Securities and Exchange Commission (SEC), Commodity Futures Trading Commission (CFTC), and Financial Crimes Enforcement Network (FinCEN). These institutions prevent market manipulation, protect investors, and investigate financial crimes including those related to blockchain.
The regulatory landscape for crypto in the United States is still evolving. The adoption and listing of the Bitcoin spot ETF and Ethereum spot ETF can be called a pivotal moment for the cryptocurrency market in the US. Since then, the adoption of cryptocurrencies such as Ethereum has been gradually increasing.
At the initial application stage, many Ethereum ETF offers were rejected by the U.S. Securities and Exchange Commission (SEC). The reasons for the refusal mainly concerned disagreements over the Ethereum security, market manipulation, and an imperfect regulatory framework. Democratic lawmakers who have criticized such decisions in the past have largely remained silent amid the struggle for political power in the critical approval process.
As the 2024 U.S. presidential election approaches, all major political parties and candidates hope to create an image among voters that supports technological innovation and financial market reform. The adoption of crypto ETFs is a positive signal from the government towards the cryptocurrency market, helping to gain the support of younger voters and the tech industry.
Impact on Voter Base
In the US presidential election 2024, cryptocurrency is becoming an important issue in election discussions and a bargaining chip to win over voters. The attitude and policy proposals of the two main candidates, Trump and Biden, regarding cryptocurrency will not only directly affect their electoral base, but can also have a profound impact on the entire cryptocurrency market.
Young people’s support of Biden played a key role in his election victory in 2020. Institutional surveys show that the younger electorate currently has a higher level of cryptocurrency ownership than other groups. For many voters, cryptocurrencies are not just an investment tool, but a symbol of freedom and innovation. Thus, both Trump and Biden will likely include political proposals on cryptocurrency in their election strategies to gain voter support.
During the US presidential election in 2024, crypto companies such as Coinbase and Ripple, as well as venture capital organizations supporting cryptocurrency such as a16z, announced capital injections into super-political action committees on cryptocurrency in an attempt to gain a voice for the crypto industry through the "power of money.”
Trump's Attitude to Cryptocurrency
During the Trump administration, the US government's attitude towards cryptocurrencies underwent a complex evolution. Initially, the Trump administration was skeptical about cryptocurrencies, arguing that they have no intrinsic value and can be easily used for illegal activities.
In 2019, Trump publicly expressed his dislike for Bitcoin and other cryptocurrencies on Twitter, saying that they "are not currencies, their value is very unstable and has no material basis." He also highlighted the possibility of using cryptocurrencies for illegal activities including drug trafficking and money laundering.
Such a negative attitude harmed the cryptocurrency market in the early days of the Trump administration. At the time, many investors felt uneasy about the future of U.S. cryptocurrency policy..
In the 2024 election, Trump's attitude changed by 180 degrees. He not only publicly supported cryptocurrencies, but also made remarks about securing the future of cryptocurrency and bitcoin in the United States. He also said that if re-elected as president, he would commute to the sentence of the founder of the Silk Road, Ross Ulbricht, on the first day of his tenure.
Trump also accepted cryptocurrency donations for his campaign, trying to win over voters through policy changes. As of June 5, owing to the growth of Meme coins, the value of crypto assets in Trump’s wallets exceeded $ 30 million.
The Biden Administration's Policy on Cryptocurrencies
The Biden administration has maintained a conservative and cautious attitude towards cryptocurrencies, focusing on strengthening regulations and preventing risks. In the early days of the Biden administration, the president strengthened cryptocurrency market supervision, issuing several regulations against cryptocurrency exchanges.
As the election approached, the Biden administration gradually adjusted its political position. Recently, Biden's campaign team has begun contacting some crypto industry experts, including those whom Biden has rejected in the past, to obtain recommendations on his new crypto policy.
On May 23 this year, the U.S. House of Representatives passed the 21st Century Financial Innovation and Technology Act (FIT21), according to which, the authority to regulate digital currencies is transferred from the Securities and Exchange Commission (SEC) to more industry-friendly commodity futures trading. Biden announced that he would not veto the FIT21 cryptocurrency bill if it was passed.
In addition, another candidate for President of the United States, Robert F. Kennedy Jr. also threw his weight behind blockchain, saying that "cryptocurrency is a symbol of freedom and transparency," and bought 21 bitcoins during the campaign.
The Cryptocurrency Lobby
According to a recent OpenSecrets study cited by The Wall Street Journal (WSJ), crypto companies and their employees donated $73 million to this election. This is much higher than the $13 million donated by 2020. In the first nine months of the year, the industry spent more money on lobbying than in the previous eight years.
"These midterm elections are the most important for the crypto community," said Ermin Wong, policy director at Coinbase, adding, "We believe that new lawmakers will finally be able to develop a project to manage this space."
Cryptocurrency political action groups (PACs) also declared themselves in these elections. Most of them were created to support crypto-enthusiast candidates, but some even took part in primaries.
Future Outlook
The impact of cryptos on the 2024 US election is likely to be significant, with both short and long-term implications. If the regulatory landscape and campaign financing continue to shape the political discourse, then, in the long term, the election outcome will have a lasting impact on the future of crypto in the United States.
Conclusion
The link between the crypto and the 2024 US election is undeniable. As the digital asset sector continues to grow in influence, its impact on the political landscape will increase. Candidates must navigate the complex regulatory environment and appeal to the growing number of crypto enthusiasts in the electorate. The election outcome will have significant implications for the future of crypto in the United States, shaping the direction of policy and regulatory decisions for years to come.
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