The cryptocurrency industry’s influence on the 2024 U.S. elections is turning heads, as it flexes its financial muscles and stakes a claim as an undeniable political power. With contributions exceeding $135 million, the industry appeared to have mastered the campaign game, finding success across partisan lines.
While many candidates touted their affiliations with cryptocurrency, the election results confirmed what some industry insiders suspected all along: pro-crypto candidates had significantly more electoral successes than their anti-crypto counterparts. A tracker from the campaign group Stand With Crypto reported victories for 253 pro-crypto candidates compared to just 115 who opposed the industry.
This hefty spending spree was launched by several influential political action committees (PACs), most prominently Fairshake, along with Protect Progress and Defend American Jobs. These groups received significant backing from crypto giants like Coinbase and Ripple Labs, as well as venture capital firm Andreessen Horowitz, known for investing heavily in the domain.
A major highlight came from the Ohio Senate race where Bernie Moreno, the Republican candidate, was bolstered by over $40 million from the cryptocurrency industry, successfully defeating incumbent Sherrod Brown, who had long been seen as a critic of crypto. "DC received a clear message: being anti-crypto is detrimental to one’s career," Coinbase CEO Brian Armstrong proclaimed, celebrating the electoral outcome.
Despite the massive investments, campaign ads often chose to sidestep mentions of cryptocurrency. Instead, they focused on broader economic themes like job creation, energy independence, and reductions to living costs. This strategy of indirect campaigning was intentional, considering polls reveal most Americans are still unfamiliar with crypto issues.
The result of this carefully orchestrated outreach? A Congress perceived as sympathetic to crypto interests, poised to usher favorable legislation and potentially diminish the powers of the Securities and Exchange Commission (SEC), particularly under its current chair, Gary Gensler. This, after years of what pro-crypto voices considered stringent regulatory scrutiny throughout the Biden administration.
Even with substantial victories, the cryptocurrency sector's political Jenga tower remains precarious. Historically, their previous attempts at influencing voters have been marred by scandal and failure, like when FTX’s Sam Bankman-Fried walked the halls of Congress, giving donations before his firm collapsed under allegations of misconduct. Today, he sits imprisoned, yet his legacy eerily intertwines with the connectivity the industry seeks with political figures, many of whom are now pro-crypto.
Because the industry's political success was wrapped tightly around financial investments, many watchdogs expressed concern. Groups like Public Citizen lambasted cryptocurrencies’ outsized influence on the political process and warned of potential repercussions of large-scale financing influencing other sectors to follow suit.
The crypto industry, which has historically operated under the radar, is now leveraging its newfound political prominence to influence economic policy across the United States. This new chapter opens potential dialogue on legislation impacting the crypto economy as well as key economic factors, including monetary policy and regulatory frameworks.
Looking forward, both Coinbase and Ripple have pledged to ramp up their lobbying activities, aiming to not just participate but actively drive the political conversation surrounding cryptocurrencies. The Cedar Innovation Foundation, another lobbying group with crypto ties, praised election results as evidence of bipartisan support at the congressional level, pushing hard for Gensler’s removal even before the new Congress officially steps in.
Despite forecasts of uncertainty, celebrations across the crypto community continue. Campaign managers and strategists now see this election as validation of their work to sway narratives around cryptocurrencies. They have undeniably succeeded, but this success bears watching, as the industry’s dual challenge lies not just in maintaining this influence but also ensuring it doesn’t collapse under scrutiny as past efforts once did.
Whether the cryptocurrency industry can maintain its momentum over the next electoral cycles remains to be seen. Observers will be watching closely, especially as midterms approach, where the crypto sector will likely expand its influence and set the stage for its future role on the national political stage.
