4 years ago, if someone told you that in this round of US presidential election, candidates from both parties would actively promote their recognition and support for the encryption industry, even to the extent of "comparison", would you believe it? You must think that person is crazy. But the reality is so dramatic. For the encryption industry, the 2024 U.S. presidential election has become a politician's show that is completely different from the 2020 and 2016 elections - whether it is the issue setting throughout the election cycle or the presidential candidates of both parties. The public statements of both parties have begun to involve cryptocurrency as never before, and the candidates of both parties are even "comparing" their own open attitudes. This article will briefly explore the undercurrent behind this significant variable, that is, whether the U.S. cryptocurrency policy trend is really turning the wheel, and what will the changing attitudes of many politicians and regulators mean in 2024? How will the encryption and Web3 industries be affected?
01
Trump and Biden's "Cryptocurrency War" Although the first televised debate of the 2024 US presidential election has not yet opened, Trump and Biden have already started to fight each other on many issues, among which the open attitude towards cryptocurrency is a key arena. First of all, Trump, who was still in office five years ago, publicly stated that "he does not like Bitcoin and other cryptocurrencies because they are not currencies, their values are highly volatile and have no real basis", but as a rare heavyweight politician who has issued several NFT series in a row, Trump is now qualified to flaunt his strong support for cryptocurrency. Especially in the context of the increasingly heated election situation, Trump has increasingly positioned himself as a "crypto-friendly" candidate, claiming to be an advocate of financial technology innovation. On May 22, he opened a cryptocurrency donation website to officially accept crypto donations-in addition to Bitcoin and Ethereum, it also supports USDC, SOL, XRP, DOGE, ZRX, SHIB and other cryptocurrencies.
He even frequently made public statements to highlight his tolerance for cryptocurrencies: leading the "cryptocurrency army" and "pushing the campaign to victory on November 5 (election day)" and so on. In contrast, Biden, who has always been known for his strict regulatory attitude, seems to have loosened his stance due to concerns about the election situation, trying to win the support of young voters - after all, communities of color and young people were the key Democratic Party vote banks for Biden's victory in the 2020 election, and their recognition of cryptocurrencies is the highest among all generations and ethnic groups: in six key swing states, more than 20% of voters regard cryptocurrencies as an important issue; another nationwide survey of registered voters commissioned by the crypto company Paradigm found that the ownership rate of crypto assets is higher in communities of color and young people. Therefore, according to The Washington Times, Biden's re-election team is now hiring an "emoji manager" to manage Internet content and emojis (including Memes) because of its difficulties in attracting Generation Z voters.
In addition, US presidential candidate Robert Kennedy Jr. (nephew of former President John F. Kennedy) is also a staunch supporter of crypto. "Cryptocurrency is our way out of dependence on the Federal Reserve, which is the best way to fight inflation. It deprives the government and the monopoly banking system of control, which uses money printing to transfer wealth to billionaire oligarchs while impoverishing ordinary Americans. If you agree that Crypto equals freedom, please help me advance this vision as president." Overall, the election year is definitely a key factor. For the United States, the group that directly or indirectly holds crypto assets is already a force that cannot be ignored, especially when the poll data is tight, then the "critical few" are the sweet cakes, as can be seen from the passage of the FIT21 bill at this time point.
02
From the FIT21 Act to the softening of regulatory attitudes, whether it is Trump's positive statement or Biden's timely turn, it is essentially to win votes from the crypto community, just as both of them have opened accounts on Tiktok to carry out campaign propaganda in an extreme way, which is just one of the measures to deal with the election situation in the election year. To put it bluntly, politicians' open attitude towards crypto assets is more like a means in the context of 2024. The loosening of administrative, legislative and regulatory levels is the important observation window that deserves more attention in the future. It is worth noting that on May 22, the "Financial Innovation and Technology Act of the 21st Century" (FIT21 Act) was passed by the House of Representatives with an overwhelming advantage of 279 votes to 136 votes. The bill established a regulatory framework for digital assets and is regarded as one of the bills that may have the most far-reaching impact on the crypto industry. In fact, the core point of the bill for crypto regulation is to divide the division of regulatory power, that is, this bill clearly defines that there are two institutions that regulate crypto assets: one is the U.S. Commodity Futures Trading Commission (CFTC) and the other is the U.S. Securities and Exchange Commission (SEC).
If a crypto asset is defined as a commodity, it will be regulated by the CFTC; if it is defined as a security, it will be regulated by the SEC. The specific factors for determining whether a crypto asset is a commodity or a security can be further divided into factors such as "investment contract (The Howey Test)", "use and consumption", "degree of decentralization", "functional and technical characteristics", and "market activities". This is equivalent to clarifying comparable regulatory rules for a series of current crypto projects, which is a big step forward compared to the unknown state of being wielded by the SEC's big stick. After all, it is well known that compared to the SEC, which has frequent law enforcement actions in the crypto field, the CFTC is relatively mild. However, with the news of the Ethereum spot ETF leaked, the regulatory attitude, especially the SEC's attitude, has also softened significantly: at the same time, the US SEC's trading and market department called the trading platform and told them that it would approve 19b-4 this week, and then quickly approved it, almost a 180-degree turn. Of course, this shift has a strong political flavor. To put it bluntly, the Democratic Party desperately needs young people to vote, and if you look at what Biden is doing from a campaign perspective, the main positioning is to position himself as a "visionary octogenarian."
The most noteworthy information is the finalization of the FIT21 bill. However, there is no corresponding bill in the Senate so far, so it will not become law. Although it is the first step, there is still a long way to go. In any case, the loosening of the administrative and legislative levels will always prompt a shift in the regulatory level. Regardless of the actual subsequent direction, this is a turning point for crypto assets to further enter the mainstream vision and obtain a legal and compliant framework.
03
Behind the variables, the rising influence of the crypto community. The undercurrent behind all these variables is accelerating to the foreground. On the one hand, there is an increasingly large group of crypto users, and their importance to the election cannot be ignored. Just like the market discussion about "50 million people holding crypto assets in the United States" not long ago, it is essentially the product of the fact that the attention of the US government and the public to crypto assets and crypto asset holders has begun to rise visibly against the backdrop of the 2024 US presidential election. Although it is not ruled out that the data is specially provided for the 2024 election to soften the attitude of presidential candidates to win over crypto voters, it also shows from the side that even if it is just a blank check project before the election, more and more politicians and candidates have begun to "please" this part of the votes. On the other hand, the lobbying and influence of the crypto industry have also begun to penetrate into the field of policy making. According to data from OpenSecrets, a platform that tracks political donations, cited by DL News, the lobbying expenditure of the crypto industry hit a record high of US$24.7 million in 2023, and in the first quarter of 2024, the crypto industry spent another US$5.6 million.
Under the surface, the number of U.S. congressmen who accept political donations from cryptocurrency-related teams is visibly increasing. They are beginning to stand on the side of the crypto industry to safeguard common interests: for example, on May 8, 21 House Democrats voted in favor of a resolution to crack down on the SEC announcement, and on May 16, 11 Senate Democrats also voted in favor of the resolution. According to an analysis by OpenSecrets, many of these congressmen are major recipients of political donations from the cryptocurrency industry.
Dialectically speaking, this round of elections has become a clear watershed in the development of Web3 and the crypto industry. After all, Crypto had almost no influence and presence in the previous 2020 and 2016 elections. However, Web3 and the crypto industry have shown their power in the election, whether in terms of the impact on voters' cognition or the role they play in campaign strategies and capital flows. They are very important. The wind starts from the end of the green ripples. After the dust settles on the 2024 US election, Web3 and the crypto industry may really enter a new cycle.
