Republicans are embracing crypto
The Grand Old Party wants you to know they are pro-cryptocurrency. The official Republican platform adopted earlier this week says the party will “defend the right to mine bitcoin, and ensure every American has the right to self-custody of their digital assets.”
And after deriding bitcoin during his time in office, former President Donald Trump is now scheduled to deliver the keynote address at a bitcoin convention in Nashville later this month.
There is some natural ideological overlap between parts of the crypto community and the more libertarian wing of the GOP.
“The premise of crypto is that it’s money outside of the state, outside of the government,” said Lee Reiners, who teaches economics at Duke University and is a crypto skeptic.
But Reiners suspects the real reason the GOP has embraced crypto so conspicuously is the same reason some Congressional Democrats have recently become crypto-curious: “The crypto industry has raised and spent an incredible amount of money influencing elections.”
As of last month, the crypto industry has set aside $160 million for political spending, according to Bloomberg.
Calling for more crypto regulation not only risks a barrage of well-funded attack ads, but also losing some voters who may care more about the price of bitcoin than, say, abortion or immigration.
“The fact that we have this active and engaged, highly communicative community is a strength for the industry and something that will ultimately appeal to a broad cross-section of policymakers,” said Kristin Smith, CEO of Blockchain Association, a crypto trade association.
Smith said that her industry is not inherently pro-Trump or anti-Biden — but at the top of her wish list is removing a prominent Biden administration official.
“Having a change in leadership at the SEC would be the most impactful for the industry,” she said. “What we’ve seen out of this current SEC led by Gary Gensler is a very strong regulation by enforcement approach.”
It’s an approach that the SEC says is necessary to protect consumers, like those harmed by the collapse of Sam Bankman Fried’s FTX.
The industry’s political influence has been buoyed by resurgent crypto prices; bitcoin is only slightly off its $70,000 record high reached this spring.
And bitcoin prices are already reflecting Trump’s lead in the polls, according to crypto investor Leigh Drogen at Starkiller Capital.
“The market obviously likes the idea that a Trump administration would bring to an end anti-crypto regulatory regime over the last number of years,” he said.
Although Drogen cautions that investor appetite for riskier assets like tech stocks have more to do with the price of bitcoin than anything that will happen in November.
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