Original author: M6Labs
Original translation: TechFlow
Trump's shift toward cryptocurrencies and Biden's regulatory stance could affect voter sentiment.
As the US presidential election approaches, traditional topics such as foreign policy and culture wars are at the forefront of discussion. However, a new topic seems to have emerged that may play a major role in the country's election - Bitcoin (and the entire cryptocurrency market). Let's take a look at the rise of cryptocurrency in political discussions.
Cryptocurrency and politics
Just four years ago, the idea of presidential candidates discussing Bitcoin on the campaign trail seemed far-fetched. However, during last year’s primaries, things began to change dramatically.
High-profile candidates such as Ron DeSantis, Vivek Ramaswamy, and Robert F. Kennedy Jr. have attended Bitcoin conferences, appeared on major Bitcoin podcasts, and incorporated Bitcoin-focused initiatives into their campaign platforms.
The real turning point came when President Donald Trump significantly deviated from his previous positions. He once denigrated Bitcoin as a threat to the U.S. dollar. However, his tone is now more accepting of Bitcoin. In response to what he described as the Biden administration's heavy-handed actions against the cryptocurrency industry, Trump announced his support for keeping the industry on American soil. In addition, the Trump administration has opened the door to cryptocurrency campaign contributions.
Current Environment
The Biden administration's strict approach to cryptocurrency regulation has sparked a backlash from the industry and its supporters. Senator Elizabeth Warren has been particularly aggressive in her crusade against cryptocurrencies, causing several large cryptocurrency companies to leave the United States in search of a more favorable regulatory environment. This regulatory hostility could alienate a significant portion of the U.S. electorate, especially as cryptocurrencies such as Bitcoin gain mainstream acceptance.
Hayden Adams, founder and CEO of Uniswap, has urged President Biden to reconsider his administration’s approach to cryptocurrencies, warning that current policies could drive voters away. In a May 12 post, Adams criticized the Biden administration for allowing Senator Warren and the SEC to wage an all-out war on cryptocurrencies, suggesting that Republicans are taking advantage of the situation and moving toward a more crypto-friendly stance.
After taking office, President Biden signed an executive order on digital assets and nominated Gary Gensler to serve as chairman of the SEC. Under Gensler's leadership, the SEC has stepped up its enforcement efforts against cryptocurrency companies, leading to criticism of inconsistent enforcement. With major cases against companies such as Kraken, Coinbase, Ripple, and Binance, the government's stance has been met with backlash from the cryptocurrency community, increasing pressure on Biden to adjust policy before the upcoming election.
Voter sentiment
Recent polls show that a significant number of voters in key swing states now consider Bitcoin and cryptocurrency policy to be an important issue. This shift has been further amplified by the actions of political action committees (PACs) supporting Bitcoin and cryptocurrency, which have poured millions of dollars not only into the presidential race, but also into Senate and House races. This level of investment and political engagement by the cryptocurrency community shows that its influence in American politics is continuing to consolidate.
With more than 20% of Americans owning Bitcoin or other cryptocurrencies, the potential impact on the electoral landscape cannot be underestimated. President Trump’s shift to a pro-crypto stance could be seen as a strategic move to capture this growing demographic, especially during an election cycle when polling data is tight.
Given that recent presidential elections have been decided by narrow margins, the crypto voter community could well sway the outcome of the 2024 election.
Voter Insights
Harris Poll conducted a national survey on behalf of Grayscale titled “2024 Election: The Role of Cryptocurrency.” Here are some key insights.
Voter Concerns and Cryptocurrency
Inflation is a top concern for American voters, who prioritize economic stability and the ability to pay their bills over other values, such as family, patriotism and community involvement. Such concerns coincide with the appeal of Bitcoin, which is often seen as a hedge against currency debasement due to its hard supply cap. Nearly half of voters are waiting for more clarity before investing in cryptocurrencies, indicating a demand for regulatory clarity.
Young People and Crypto Acceptance
Younger voters, especially Gen Z and Millennials, show a clear preference for cryptocurrencies over traditional stocks, with 31% and 35% holding them, respectively, compared to 17% and 24% holding stocks. The vast majority of these young demographics believe that cryptocurrencies and blockchain technology are the future of finance, with 54% of Gen Z and 58% of Millennials expressing this view. Additionally, 68% of voters aged 18-34 would be more likely to invest in cryptocurrencies if there was more clear regulation, highlighting the importance of regulatory clarity to wider cryptocurrency adoption.
Bitcoin and Political Campaigns
The integration of Bitcoin in political campaigns highlights several key trends.
It highlights the growing importance of digital literacy and understanding of 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 way may gain an advantage.
The political discussion surrounding Bitcoin and cryptocurrencies is likely to encourage greater regulatory clarity. As candidates outline their positions, they will need to respond to the industry’s calls for clear, consistent, and fair regulation that fosters innovation while protecting consumers.
Partisan divide
While cryptocurrencies have bipartisan support, Republicans are clearly more favorable to them. Politico reported that the first critical vote on a large cryptocurrency policy bill to be considered by the full House of Representatives in the Democratic-controlled House and Senate has essentially died in the womb. Meanwhile, the strongest supporters of cryptocurrencies currently in office are Republicans, such as Senators Emmer and Cynthia Lummis.
Critics argue that political support for cryptocurrencies often stems from economic interests rather than moral crusades, but it is undeniable that cryptocurrency is an increasingly important political issue. For some, it is the defining issue of our time, representing not just an investment opportunity but 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 years in office means more enforcement, more gridlock that hinders actual cryptocurrency legislation, and more anti-crypto rhetoric in the highest political offices. Biden's term has been marked by growing hostility toward cryptocurrencies from U.S. lawmakers and regulators, greatly affecting the global industry.
Recently, EigenLayer, a refactoring platform hailed as a major innovation in blockchain, came under fire for a highly restrictive airdrop. Under the current regulatory regime, this is basically the only move EigenLayer can make unless it wants to risk being sued by the SEC.
In this environment, it’s understandable why the likes of Ryan Selkis, Mike Dudas, and Mark Cuban feel the crypto industry must align with Republicans to get favorable policies. Critics might say former President Donald Trump’s recent support for cryptocurrencies was opportunistic and designed to paint Biden as an outcast. Still, with the U.S. crypto industry feeling attacked by the government, having a high-profile figure like Trump willing to speak out in support could be a welcome development.
Potential risks of politicizing cryptocurrency
There are potential risks to Trump's embrace of cryptocurrencies. The digital asset market has experienced dramatic booms and busts in recent years, and major industry players like Sam Bankman-Fried have been sentenced to prison for breaking the law. The shift also poses risks to the cryptocurrency lobby in Washington. Trump could make the politics of digital asset regulation more partisan. The industry has spent years and millions of dollars in campaign contributions trying to build support in both parties, which may well be key to the legislation that cryptocurrency companies hope to pass.
in conclusion
Fifteen years after Satoshi Nakamoto launched Bitcoin, it has evolved from a novel digital asset to a major political issue. As the United States heads into its most closely watched presidential election, Bitcoin’s role reflects not only its growing economic significance but also 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 what is certain is that the days of cryptocurrencies being on the political fringe are gone. As we move forward, conversations between policymakers, industry leaders, and voters will likely shape the trajectory of this digital revolution in ways we are only beginning to understand.