Cryptocurrency Regulatory Stance Becomes Key in Election
The shift in attitudes towards cryptocurrency by Donald Trump and the regulatory stance of Joe Biden may impact voters’ sentiments.
As the US presidential election draws near, traditional issues such as foreign policy and cultural wars have become the focus of discussion. However, a new topic seems to have emerged that could play a significant role in the country’s elections – Bitcoin (and the entire cryptocurrency market). Let’s take a look at the rise of cryptocurrency in political discourse.
Cryptocurrency and Politics
Just four years ago, discussing Bitcoin in campaign events by presidential candidates seemed far-fetched. However, the situation began to change drastically in last year’s primaries.
Prominent candidates such as Ron DeSantis, Vivek Ramaswamy, and Robert F. Kennedy Jr. attended Bitcoin conferences, appeared on major Bitcoin podcast shows, and incorporated plans to focus on Bitcoin into their campaign platforms.
The real turning point came when President Donald Trump visibly deviated from his previous stance. He once disparaged Bitcoin as a threat to the US dollar. However, his current tone is much more accepting of Bitcoin. In response to what he described as the Biden administration’s “heavy-handed action” against the cryptocurrency industry, Trump announced his support to keep the industry within the US. Furthermore, the Trump administration opened the doors for campaign donations in cryptocurrency.
Current Environment
The strict regulatory stance of the Biden administration towards cryptocurrency has sparked strong backlash from the industry and its supporters. Senator Elizabeth Warren’s condemnation of cryptocurrency has been particularly fierce, leading several major cryptocurrency companies to leave the US in search of more favorable regulatory environments. This regulatory hostility could alienate a significant portion of American voters, especially as cryptocurrencies like Bitcoin gain mainstream recognition.
Hayden Adams, the founder and CEO of Uniswap, urged President Biden to reconsider his government’s stance on cryptocurrency and warned that current policies could drive away voters. Adams criticized the Biden administration for allowing Senator Warren and the US Securities and Exchange Commission to “launch a full-scale war” on cryptocurrency in an article on May 12. He also hinted that Republicans are taking advantage of this position and shifting towards a more cryptocurrency-friendly stance.
Upon assuming office, President Biden signed an executive order on digital assets and nominated Gary Gensler as the chairman of the US Securities and Exchange Commission. Under Gensler’s leadership, the SEC has intensified its enforcement efforts against cryptocurrency companies, leading to criticism of inconsistent enforcement. With significant cases against companies like Kraken, Coinbase, Ripple, and Binance, the government’s stance has faced backlash from the cryptocurrency community, increasing pressure on Biden to adjust policies before the upcoming election.
Voter Sentiments
Recent polls indicate that cryptocurrency policy, particularly Bitcoin, is an important issue for voters in key swing states. Political action committees (PACs) supporting Bitcoin and cryptocurrency have further amplified this shift, investing millions of dollars not only in the presidential race but also in Senate and House races. The level of investment and political engagement from the cryptocurrency community demonstrates its growing influence in US politics.
Over 20% of Americans own Bitcoin or other cryptocurrencies, highlighting the potential impact on the electoral landscape. Trump’s shift to supporting cryptocurrencies can be seen as a strategic move to capture the growing population, especially in a tense election cycle with tight poll numbers.
Considering recent presidential elections being decided by narrow margins, the cryptocurrency voter base is likely to influence the outcome of the 2024 elections.
Voter Perspectives
Harris Insights, on behalf of Grayscale, conducted a national survey titled “2024 Elections: The Role of Cryptocurrency.” Here are some key insights:
Issues Voters Are Concerned About and Cryptocurrency
Inflation is the top concern for US voters, with their focus on economic stability and the ability to pay bills rather than other values such as family, patriotism, and community engagement. This concern aligns with the appeal of Bitcoin, often seen as a hedge against currency devaluation due to its hard supply cap. Nearly half of the voters are waiting for clearer policies before investing in cryptocurrency, indicating a need for regulatory clarity.
Young People’s Acceptance of Cryptocurrency
Young voters, particularly Generation Z and Millennials, show a clear preference for cryptocurrency compared to traditional stocks, with ownership rates of 31% and 35% respectively, compared to stock ownership rates of 17% and 24%. The majority of these young populations believe that “cryptocurrency and blockchain technology is the future of finance,” with 54% of Generation Z and 58% of Millennials expressing this view. Additionally, 68% of voters aged 18-34 are more likely to invest in cryptocurrency with clearer regulatory guidelines, highlighting the importance of regulatory clarity for wider adoption of cryptocurrencies.
Bitcoin and Political Campaigns
The integration of Bitcoin into political campaigns highlights several key trends.
It emphasizes the increasing importance of digital literacy and understanding technology among presidential candidates.
As digital assets become more intertwined with the economy, candidates who can articulate their potential benefits and challenges in a credible manner may gain an advantage.
Political discussions surrounding Bitcoin and cryptocurrency may encourage increased regulatory clarity.
When candidates outline their positions, they will need to respond to the industry’s call for clear, consistent, and fair regulation to promote innovation while protecting consumers.
Partisan Divide
While cryptocurrency has garnered support from both parties, Republicans seem to favor it more. Politico reports that the “first-ever full House vote on major cryptocurrency policy legislation” has essentially been stillborn in the Democratic-controlled House and Senate. Meanwhile, the most vocal supporters of cryptocurrency currently in office are Republicans, such as Senators Emmer and Lummis.
Critics argue that political support for cryptocurrency often stems from economic interests rather than moral condemnation. However, it is undeniable that cryptocurrency has become an increasingly important political issue. For some, it is a defining issue of our time, representing not just an investment opportunity but also a movement, a philosophy, and a way of life.
For many cryptocurrency supporters, this issue is a matter of life and death; Biden’s next four-year term means more enforcement regulation, more gridlock inhibiting actual cryptocurrency legislation, and more anti-cryptocurrency rhetoric at the highest political level. In Biden’s term, the growing animosity towards cryptocurrency from US legislators and regulators has greatly affected the global industry.
Recently, the blockchain innovation hailed as significant, EigenLayer, faced fierce criticism due to an extremely restrictive airdrop. Under the current regulatory regime, this is essentially EigenLayer’s only option unless it wants to risk being sued by the US Securities and Exchange Commission.
In this environment, it is understandable why individuals like Ryan Selkis, Mike Dudas, and Mark Cuban believe that the cryptocurrency industry needs to ally with Republicans to secure favorable policies. Critics may say that former President Trump’s recent support for cryptocurrency is a political maneuver to paint Biden as an outsider. However, in a situation where the US cryptocurrency industry feels under attack from the government, having prominent figures like Trump willing to come out in support may be a welcomed development.
Potential Risks of Politicizing Cryptocurrency
Trump’s embrace of cryptocurrency carries potential risks. In recent years, the digital asset market has experienced significant boom and bust cycles, with major industry participants like Sam Bankman-Fried facing legal troubles. This shift also poses risks to Washington’s cryptocurrency lobbying groups. Trump’s involvement could further polarize the political partisanship of digital asset regulation. The industry has spent years and millions of dollars in campaign donations trying to build support across both parties, which is likely key to the legislative aspirations of cryptocurrency companies.
Conclusion
Fifteen years after Satoshi Nakamoto introduced Bitcoin, it has evolved from a novel digital asset to a significant political issue. As the US approaches its most closely watched presidential election, the role of Bitcoin not only reflects its growing economic significance but also demonstrates its potential to influence policy at the national level.
Whether Bitcoin will be a decisive factor in the 2024 election remains to be seen, but it is certain that the days of cryptocurrency being on the periphery of politics are long gone. As we move forward, the dialogue between policymakers, industry leaders, and voters is likely to shape the trajectory of this digital revolution in ways we are just beginning to understand.
This article was originally published on DeepChain.