Regulation
Why Republicans Are Embracing Bitcoin and Other Cryptocurrencies
The Grand Old Party Wants You to Know They’re 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 mocking bitcoin during his tenureFormer President Donald Trump is now expected to deliver the keynote address at a bitcoin convention in Nashville after this month.
There is a natural ideological overlap between some parts of the cryptocurrency community and the more libertarian wing of the GOP.
“The premise of cryptocurrency is that it’s money outside the state, outside the government,” said Lee Reiners, an economics professor at Duke University and a cryptocurrency skeptic.
But Reiners suspects that the real reason the GOP has embraced cryptocurrency so prominently is the same reason some congressional Democrats have recently become curious about cryptocurrency: “The cryptocurrency industry has raised and spent an incredible amount of money to influence elections.”
As of last month, the cryptocurrency industry has allocated $160 million to political spending, according to Bloomberg.
Calling for more regulation of cryptocurrencies not only risks unleashing a barrage of well-funded offensive ads, but also loses some voters who might care more about the price of bitcoin than, say, abortion or immigration.
“The fact that we have this active, engaged, and 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 the Blockchain Association, a cryptocurrency trade association.
Smith said his industry is not inherently pro-Trump or anti-Biden, but at the top of his wish list is the removal of a top Biden administration official.
“Having a change in the SEC leadership would be the most impactful thing for the industry,” he said. “What we’ve seen out of this current SEC led by Gary Gensler It’s a very strong enforcement-based regulatory approach.”
It’s an approach the SEC believes is necessary to protect consumers, including those harmed from the collapse of FTX by Sam Bankman Fried.
The sector’s political influence has been buoyed by a recovery in cryptocurrency prices; bitcoin has only slightly fallen from its all-time high of $70,000 this spring.
And bitcoin prices are already reflecting Trump’s lead in the pollsaccording to cryptocurrency investor Leigh Drogen of Starkiller Capital.
“The market obviously likes the idea of a Trump administration ending the anti-crypto regulatory regime of the last few years,” he said.
Although Drogen cautions that investor appetite for riskier assets, such as tech stocks, is more tied to the price of bitcoin than anything that happens in November.
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