Former President Donald Trump and Vice President Kamala Harris share a significant point of alignment in their political agendas despite being on opposite ends of the spectrum on many issues, including tariffs and abortion. Both leaders advocate for the growing world of cryptocurrencies.
Once skeptical of digital currencies, with Trump labeling them as “like a scam,” he has since pivoted his stance. If returned to office, he aims to establish the U.S. as the “crypto capital of the planet” and transform it into a “Bitcoin superpower.” Trump has also pledged to dismiss Gary Gensler, the current chair of the Securities and Exchange Commission (SEC), known for his tough stance on cryptocurrency regulations and enforcement actions against crypto firms.
Although the number of people enjoying cryptocurrencies isn’t small, there is a distinct lack of excitement among the general public.
Harris’s support for cryptocurrencies may not be as emphatic, but she aligns with the notion of promoting innovative technologies, including digital currencies. She has reassured major donors that her administration would work towards creating a “safer business environment” for cryptocurrency investors.
So, why is cryptocurrency becoming a focal point in political discourse? Proponents often reference the “crypto voter” demographic. However, despite not being entirely devoid of interest, the general public enthusiasm for digital currencies is low. Studies show that less than 20% of Americans have ever engaged in cryptocurrency trading. Moreover, when surveyed, those without trust in cryptocurrencies tend to voice negative opinions about them. Even young men, who are more inclined to invest in cryptocurrencies, do not list them among their top 20 stock interests.
The real answer likely lies in the financial influence of the cryptocurrency industry itself, which has emerged as a major corporate contributor in the 2024 election cycle. Groups such as the Orwell-named Fairshake have spent large sums to support candidates from both the Democratic and Republican parties, as well as to challenge incumbents they oppose. Earlier this year, candidates like Democratic Reps. Jamal Bowman and Katie Porter faced attacks from the industry during their primary elections.
In races such as the Ohio Senate contest, cryptocurrency funds have targeted Democratic incumbent Sherrod Brown. Similarly, in Southern California, crypto contributions are aiding Republican candidates like Michelle Steele, Mike Garcia, and Young Kim in a competitive environment where Democrats currently hold the majority. This could potentially tilt the balance of power.
It’s evident that advertisements backed by the cryptocurrency industry seldom focus on promoting cryptocurrencies. Campaigns against figures like Mr. Bowman and Mrs. Porter revolved around other issues, such as crime and campaign finance criticism. In the case of Senator Brown, the ads focus on immigration policy while highlighting his opponent’s pro-crypto stance.
As of mid-2023, the cryptocurrency sector has spent approximately $119 million on federal election campaigns, primarily funneled through Fairshake. This figure constitutes nearly half of the total corporate political donations in the 2024 cycle and surpasses contributions from other industries, including Big Oil. The motivation for this increased spending primarily relates to regulatory pressures.
To date, no one has convincingly outlined a beneficial use for cryptocurrencies that would resonate with the average law-abiding investor.
According to CNBC, as of late 2023, the U.S. has been extremely proactive in enforcing laws against cryptocurrency firms. The Department of Justice and the SEC are at the forefront, with high-profile arrests, including that of FTX founder Sam Bankman-Fried, who was sentenced to 25 years for fraud. Binance, one of the leading crypto exchanges, faced charges for money laundering and sanctions violations, resulting in over $4 billion in fines. Under Gensler’s leadership, the SEC has initiated over 100 lawsuits regarding cryptocurrency regulation.
Unsurprisingly, advocates for cryptocurrencies are voicing their discontent over these regulations. There are calls for legislation that would shift oversight to the more finance-friendly Commodity Futures Trading Commission, effectively limiting the SEC’s reach in this area. Industry leaders and wealthy investors are eagerly anticipating Gensler’s dismissal. Notably, entrepreneur Mark Cuban, a known supporter of Harris, has been proposed as a possible successor. Ripple Labs CEO Brad Garlinghouse has voiced optimism about an impending end to Gensler’s rigorous regulatory actions against the crypto sector, a sentiment that arises from Ripple’s unresolved legal troubles with the SEC regarding their XRP token.
The cryptocurrency industry often presents itself as a path for economically marginalized individuals to enter the financial realm. However, proponents rarely explain why these individuals shouldn’t simply invest in the stock market. Furthermore, no compelling argument has been put forth that would appeal to responsible investors or voters regarding cryptocurrency investments. Claims that cryptocurrencies act as a hedge against inflation fall short, given their high volatility. Moreover, rampant fraud casts a long shadow over the industry. Despite lofty promises of revolutionizing finance, cryptocurrencies have primarily facilitated illicit activities, with their use by criminals including international traffickers and rogue states demonstrating this point.
Ultimately, the persistent financial backing from the cryptocurrency sphere highlights a troubling truth about American politics: it’s not about the public interests but rather about the money that drives political decisions.
