Crypto Has Eyes on the U.S. Congress

No matter who wins the Presidency, crypto is set to have meaningful representation in the U.S. Congress

The crypto sector is gearing up for a significant political influence boost in the U.S. Congress, supported by a massive $160 million in super PAC spending according to a new report by Politco. 

This funding aims to support pro-crypto lawmakers across both the House and Senate in the 2024 elections, potentially setting the stage for the most crypto-friendly Congress to date. The candidates span across party lines, indicating a bipartisan push within the industry to achieve favorable regulatory environments and further mainstream adoption of digital assets.

House and Senate Influence

In the House, up to 13 pro-crypto candidates could assume new seats, backed by industry-funded super PACs that have strategically spent to uplift allies and remove detractors. These incoming representatives come from various political perspectives, from progressive Democrats focused on financial inclusion to Republicans who criticize the Biden administration’s crypto stance, seeing digital assets as tools for economic liberty. If successful, the new Congress could see reduced regulatory barriers, a longtime industry goal, with support stretching across traditional party divides.

In the Senate, prominent contenders like Reps. Adam Schiff (D-Calif.) and John Curtis (R-Utah) are set to win seats, ensuring support from both sides of the aisle. Republicans, with numerous pro-crypto advocates in competitive battleground states, could further tilt the Senate toward crypto-positive stances, especially if they gain a majority.

Source: Politico

Significant House Targets

Crypto super PACs have allocated approximately $31.5 million for House Democrats, focusing on figures like Shomari Figures of Alabama ($2.6 million) and others like Rep. Don Davis of North Carolina and Yassamin Ansari of Arizona. Figures, initially an unlikely crypto ally due to his work with the Biden Justice Department, now advocates for the benefits of digital assets in spurring innovation and regulatory frameworks to protect the economy. Protect Progress, a key super PAC, invested heavily to ensure pro-crypto Democratic nominees in key districts, targeting candidates who are more progressive or willing to align with the industry’s goals.

For Republicans, $16.7 million has been spent, bolstering campaigns for incumbents in swing districts like Reps. Michelle Steel of California and William Timmons of South Carolina. Republican candidates have increasingly embraced crypto, influenced by figures like former President Trump, who envisioned the U.S. as a “crypto capital.”

Senate Spending and Strategic Gambles

In the Senate, crypto funding peaks at $49.6 million, with substantial investments in candidates like Bernie Moreno of Ohio ($40.1 million). Moreno’s campaign against Senate Banking Chair Sherrod Brown, a vocal crypto critic, is a major battleground, as a GOP win in Ohio would strengthen pro-crypto momentum. A win here would also neutralize Brown, a significant regulatory obstacle for the crypto sector. Other Senate races, including those in Michigan, Arizona, and Pennsylvania, are bolstered by candidates aligning with crypto-friendly policies, strengthening the potential for a GOP-led, pro-crypto Senate.

Source: Politico

Industry Impacts and Future Outlook

Should the Republicans seize the Senate, this bipartisan shift toward crypto could mark a historic pivot for the industry. This legislative transformation could foster an unprecedented regulatory environment favoring cryptocurrency, spurred by the industry’s hefty political investments.

Crypto Lobbying and Grassroots Dynamics

Crypto lobbying is evolving beyond traditional financial contributions, with companies also rallying public support through initiatives like Coinbase’s Stand With Crypto campaign. These efforts include events like watch parties, where crypto enthusiasts gather to discuss politics and policy. However, mobilizing grassroots support has proven tricky. Many crypto advocates support decentralized systems precisely because they want an alternative to politics, and they’re often reluctant to engage in political campaigns.

Some lobbying tactics have been met with criticism, especially those led by pro-crypto PACs. Fairshake, for example, spent $10 million on attack ads against California Representative Katie Porter—despite her relatively neutral stance on crypto. Such campaigns have stirred confusion among politicians and the public alike, leading some to question whether certain industry insiders are more interested in wielding influence than genuinely advancing pro-crypto legislation.

One major hurdle remains passing comprehensive crypto legislation. The FIT21 bill, which has garnered bipartisan support in the House, faces an uncertain future in the Senate. While prominent Democrats like Nancy Pelosi have shown quiet support, others, particularly Senate Democrats like Sherrod Brown, remain wary of crypto’s reputation, potentially stalling progress.

Despite crypto’s unprecedented political spending, its effectiveness is uncertain. The SEC remains a formidable opponent, and the lack of unity among industry stakeholders and political allies complicates the lobbying landscape. While support from influential figures, such as a potential endorsement from Trump, could boost crypto’s political standing, there’s also a real risk of backlash. Aggressive spending might prompt more regulatory scrutiny or legislative deadlock, stymying crypto’s momentum.

Looking ahead to the 2024 U.S. presidential election, the crypto industry’s hopes aren’t pinned to any particular candidate. Industry analysts are optimistic about a bullish post-election environment for assets like Bitcoin, citing increased liquidity and sidelined institutional investments. Whether Trump or Harris wins, the focus remains on long-term market trends rather than short-term political wins.

Source: Stand With Crypto