So far, the first unexpected twist in this year's US presidential race is that Bitcoin (BTC) and the broader cryptoasset industry have become major issues that might influence who wins the election in November.
You might be wondering, how did this happen? Well, the floodgates were opened by Republican Donald Trump, who is aiming for a second term in the White House. In May, he surprised the entire cryptoasset industry by stating in a meeting with voters that he is "fine with [crypto]" and wants to make it "good and solid, and everything." He urged voters who support crypto to vote for him.
BREAKING: DONALD TRUMP IS FINE WITH CRYPTO pic.twitter.com/SCJDKdHQUB
undefined Frank (@frankdegods) May 9, 2024
It was a complete turnaround compared to Trump’s previous statements from 2019 when he was still serving as the president of the US. (However, after his term ended, Trump began selling his non-fungible token (NFT) collections.) He stated in 2019:
“I am not a fan of Bitcoin and other cryptocurrencies, which are not money and whose value is highly volatile and based on thin air. Unregulated cryptoassets can facilitate unlawful behavior, including drug trade and other illegal activity....”
Now, several years later, this stark change in position occurred at the same time when the current president, Joe Biden, promised to veto (which he did) an important resolution passed by Congress in May that would have helped the adoption of the cryptoasset industry in the US.
This is where the momentum began. Companies within the Bitcoin and crypto industry, as well as regular users of these technologies, sensed that Trump might help end the hostilities imposed on their businesses by the Biden administration and the Securities and Exchange Commission (SEC).
The SEC, chaired by Gary Gensler, who was appointed by Biden, is involved in multiple legal battles with the cryptoasset industry. A judge recently criticized the SEC for "gross abuse of the power entrusted to it by Congress" in a lawsuit with a blockchain company.
Trump moves
This past May marked the tipping point when sentiment towards Trump within the Bitcoin and cryptoasset industry started to turn increasingly positive. This shift has somewhat divided the community, as many argue that one shouldn’t vote for Trump based solely on his pre-election promises about this industry.
However, this momentum has only accelerated, with more prominent investors and billionaires, such as Chamath Palihapitiya, coming out in favor of the former president despite a New York jury finding him guilty of 34 felony counts of falsified business records in May.
Trump started accepting donations in cryptoassets and is advised by insiders from the Bitcoin and crypto industry on strategies to influence single-issue voters.
For example, the Republican promised to free Ross Ulbricht, who was sentenced to life in prison without the possibility of parole for creating and operating the darknet market website Silk Road.
This sentence is widely viewed as extremely unjust within the Bitcoin and crypto community, which constantly campaigns to free Ross. However, Trump had the opportunity to free him during his first term but did not.
Additionally, Trump pledged to halt the development of the “digital dollar” or central bank digital currency (CBDC) in the US due to privacy and surveillance concerns, which strongly resonated within the privacy-conscious cryptoasset industry.
One of his more recent statements, made after meeting with a cohort of Bitcoin miners, was that this industry “may be our last line of defense against CBDC” and that all remaining BTC should be mined in the US.
A few days later, he also promised to “end Joe Biden’s war on crypto” and ensure “that the future of crypto and the future of Bitcoin will be made in America.”
Biden responds
How did Biden’s camp respond to this new battlefield? The campaign is reportedly considering accepting donations in cryptoassets. Interestingly, this might be done via the crypto exchange Coinbase, which is also being sued by the SEC for “engaging in an unregistered securities offering.”
However, some members of the cryptoasset industry were skeptical of this fundraising effort.
In either case, unconfirmed reports have emerged claiming that Biden’s administration is beginning to warm up to the cryptoasset industry and is looking for more productive ways to engage.
For example, sources in Bitcoin Magazine claim that representatives of the Biden administration will attend a roundtable with key players in the Bitcoin and blockchain industries in early July to find ways to keep these innovations in the US.
Why have these industries become so important all of a sudden? They have been significant for some time now, but the two biggest rivals in this election have only recently started focusing on them.
Other candidates, such as former Republican candidate Vivek Ramaswamy and Robert F. Kennedy Jr., have also attempted to leverage Bitcoin and crypto in their campaigns.
Meanwhile, a poll conducted by crypto powerhouse DCG and Harris Poll Insights in April surveyed 1,200 registered voters in swing states, where election results are often less predictable.
It showed that almost a third of respondents have positive feelings toward crypto, while the rest are very or somewhat negative.
Additionally, most crypto-positive voters agree that this technology represents a new path to financial security and prosperity, is the future of transacting, levels the playing field for financial health, “and is meant for people like me.”
Some other results include:
Meanwhile, polls are also starting to turn more positive for Trump.
According to simulations by the polling aggregator FiveThirtyEight, Trump wins 50 times out of 100, while Biden wins 49 times.
Since April, Trump has improved his chances, while Biden's situation has worsened.
In prediction markets such as Polymarket, a place to bet on the outcome of future events, Trump is also leading over Biden. The noticeable change occurred in May, right after Trump endorsed the crypto industry.
Therefore, it seems that Trump’s changed position on Bitcoin and crypto is indeed helping him in this election in terms of funding, visibility, and new potential voters.
However, no matter what Biden does next in an attempt to keep BTC and crypto voters in his camp, this industry is going to benefit significantly as similar endorsements help legitimize this nascent technology.
In any case, it remains to be seen whether any of these pre-election promises will be kept.
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