During the 2024 U.S. elections, the relationship between politics and cryptocurrencies reached previously unheard-of levels. Leading personalities and companies in the cryptocurrency space made large investments to influence election results, which led to large financial benefits for both individuals and businesses.
In this politically tense year, prominent figures included Brian Armstrong, the CEO of Coinbase, Brad Garlinghouse, the CEO of Ripple Labs, and the co-founders of Andreessen Horowitz (a16z). Their participation showed the financial potential of a well-coordinated political campaign in addition to having an impact on the electoral environment.
An Increase in Crypto Titans’ Wealth
The financial windfall for crypto leaders came quickly after the election results. Coinbase founder Brian Armstrong’s fortune increased dramatically. Coinbase’s market value increased by $21 billion after the election. Armstrong made $437 million in less than two months by carrying out planned stock transactions at the same time as this spike. Months before to the elections, a strategy was put in place to disassociate these transactions from claims of market manipulation.
For the small handful of folks are looking at my latest 10b51 plan, some context: I will diversify a bit over time to make investments in moonshots, but still retain the vast majority of my Coinbase holdings. For some reason in the disclosures it doesn't show the price targets,…
— Brian Armstrong (@brian_armstrong) November 2, 2024
Armstrong also profited from his maintained stakes in Coinbase, as the value of his trust rose by around $2 billion after the election. This striking financial result highlighted Coinbase’s involvement and its $74 million donation to the Fairshake PAC, a PAC that is extensively involved in supporting candidates that support cryptocurrencies.
Brad Garlinghouse, the CEO of Ripple Labs, also took advantage of the post-election surge in the market. The value of XRP, the native token of Ripple, surged, making it the third-largest cryptocurrency asset by market capitalization. The value of Garlinghouse’s substantial holdings more than tripled as the price of XRP surged from $0.50 to $2.32. Despite the fact that Ripple’s private valuation is still speculative, rumors indicate that Garlinghouse and his business stand to win greatly.
Since many of their investments were secret, the financial gains were less obvious to Marc Andreessen and Ben Horowitz, co-founders of Andreessen Horowitz. However, as the market reacted to the election results, their wide-ranging portfolio—which includes investments in Coinbase, Uniswap, and Solana—certainly increased in value. The company’s $70 million political investment was in line with its larger plan to promote laws that are favorable to cryptocurrencies.
The Function of Fairshake PAC in Political Strategy
A group led by Andreessen Horowitz, Coinbase, and Ripple, Fairshake PAC, was at the forefront of the industry’s political push. With 53 victorious congressional candidates, the PAC became a powerful influence in the 2024 elections. The market surge and financial advantages for industry executives were facilitated by the pro-crypto legislative climate that resulted from their initiatives.
Although Fairshake PAC had a major effect on legislative elections, it did not publicly support any presidential candidates. Nonetheless, there was overt backing for Donald Trump, who has referred to himself as a “crypto president.” An atmosphere that was favorable for market expansion was produced by Trump’s return to the White House and a Congress that had about 300 members who supported cryptocurrencies.
A strategic, issue-focused objective was reflected in Fairshake’s strategy. The PAC spent more than $130 million on campaign advertising, focusing on topics relating to innovation and the economy rather than directly mentioning cryptocurrencies. In order to secure bipartisan support for regulations pertaining to cryptocurrency, this messaging sought to appeal to a wide range of political viewpoints.
Industry Influence or Community-Based Initiatives?
The large financial donations from prominent figures in the business speak for themselves, even as Armstrong and others highlighted grassroots support as a key factor in cryptocurrency’s political success. The goal of Coinbase’s Stand With Crypto campaign was to mobilize voters, but this endeavor was intricately linked to Fairshake PAC’s overarching plan. Critics contend that the industry’s transactional approach to political influence was concealed by the story of grassroots mobilization.
Using funds to gain legislative supporters, the crypto industry’s expenditure approach was distinguished by its careful targeting of important races. Public Citizen and other groups have criticized this strategy, calling the industry’s strategy “purely self-interested.” The crypto business was not an exception, according to Americans for Financial Reform, which also emphasized the return on investment usually observed in such political expenditures.
Market Response and Wider Consequences
The outcome of the election affected the cryptocurrency market immediately and profoundly. Within a month after the elections, the flagship cryptocurrency, Bitcoin, hit $100,000, indicating a spike in market confidence. This event took place during a larger rally that increased the overall value of the cryptocurrency market by more than $1 trillion.
Garlinghouse of Ripple credited this expansion to the new administration’s lifting of regulatory restrictions. Many people saw the resignation of SEC Chairman Gary Gensler, a strong opponent of the cryptocurrency sector, as a turning point. “The price of Gensler’s foot on the neck of the market being lifted” is how Garlinghouse characterized the market surge.
Now, the sector is concentrating on leveraging its political successes. There is a lot of room for development if major resources are diverted from court cases to innovation and growth. This view was summed up by Gemini’s Cameron Winklevoss, who forecasted unrestricted creativity and financial success for the cryptocurrency industry in the future.
Regulatory and Ethical Considerations
The extraordinary political involvement of the cryptocurrency business has brought up significant moral and legal issues. Critics contend that rich interests might disproportionately influence legislative results due to the significant expenditures made by crypto businesses, undermining the democratic process. Calls for more accountability and openness in campaign finance have been triggered by the transactional character of the industry’s political approach.
Concerns of insider trading and market manipulation have also been heightened by the financial gains made by business executives after the election. Armstrong’s planned stock sales were in compliance with SEC rules, but the timing of these deals has come under investigation. One of the industry’s biggest challenges will be making sure that such actions don’t damage public confidence.
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