$160 million Bitcoin war chest could ruin Democrats in November

Some of the world’s largest cryptocurrency companies have built up a political war chest of more than $160 million that they plan to use this year to support candidates who advocate “light” regulation of the industry, with Republicans likely to benefit the most, experts say.

According to the Securities and Exchange Commission, cryptocurrency companies’ spending on lobbying and government relations reached a new high of $24.7 million in 2023.

Another $5.6 million has already been spent in the first quarter of 2024 – a sum that is expected to more than quintuple by November.

The two biggest backers are Coinbase, a popular crypto trading platform, and the Blockchain Association, a nonprofit organization that lobbies state and federal lawmakers.

A campaign fund of this magnitude makes cryptocurrencies one of the most influential players in this election cycle.

“Former President Donald Trump’s acceptance and endorsement of cryptocurrencies stands in stark contrast to the predominantly regressive approach to cryptocurrencies taken by the Biden administration and the Democratic Party as a whole, which have consistently and in most cases unfairly attacked the industry,” Edward Wilson, an analyst at blockchain firm Nansen, told The Post.

“It is likely that the issue of crypto will influence and perhaps even sway the election. This is because many crypto supporters in the US see crypto as a central issue for themselves and are tired of good players in the space like Coinbase and Uniswap going after them while preventing access to products and airdrops while other countries thrive and take the industry overseas. On this basis, it is likely that Republicans will receive significantly more crypto donations – but how much is difficult to determine – than Democrats.”

That could be extremely bad news for Democrats like incumbent Sen. Sherrod Brown of Ohio, who have repeatedly questioned the ethics and effectiveness of both crypto companies and cryptocurrencies in general. (Brown’s campaign team did not respond to The Post’s request for comment.)

“Our founding fathers would have been bitcoin supporters,” said Brown’s Republican opponent, Ohio businessman Bernie Moreno. “They believed in decentralization of power and control. That’s what’s happening here. (Brown) laughed about it, but I take it very seriously.”

Moreno previously owned a blockchain company himself and says there are “a lot” of crypto “farmers” in Ohio that the government should also consider.

“Crypto represents freedom, and philosophically, lawmakers like Brown and the Democrats believe they should be in control,” Moreno told the Post. “They would rather have control of schools, jobs and of course the currency. … Deep down in their hearts, they hate crypto because they want to be in control. We disagree.”

When asked whether Democrats could change course and find more support in the crypto industry before the polls open, Moreno was not optimistic.

“The energy of the Democratic Party is controlled by extremists like Brown and Elizabeth Warren,” Moreno said. “The message in the industry is that if you give them four or more years of control, crypto is completely dead in America.”

However, not everyone is convinced that cryptocurrencies can lead to political dominance in America.

“The cryptocurrency industry has only become much more involved in politics in recent years, from lobbying to campaign donations,” said University of Dayton political scientist Christopher Devine. “But it’s not clear whether cryptocurrencies can influence elections across the country or close races involving influential members of Congress, like Sherrod Brown’s re-election battle in Ohio.”

One reason that can slow them down, according to Devine, is a lack of concentration.

“It’s worth noting that the cryptocurrency industry has donated roughly equally to both parties in 2022,” he told the Post. “Their goals aren’t particularly partisan or ideological. They want to curry favor with the candidate most likely to win a seat in the next Congress and potentially get to vote on legislation affecting their industry.”

Jason Allegrante, legal and compliance officer at crypto company Fireblocks, agrees to a point.

“Blockchain is first and foremost a technology – and the development of that technology is bipartisan. What’s remarkable about the industry’s positioning this election cycle is that it will continue to make the cause of innovation a top priority even as it re-enters electoral politics. Republicans may benefit more this November simply because many already seem to understand the issues. But all candidates, regardless of party, will have the opportunity to champion crypto or test an anti-crypto position with American voters,” he told the Post.

Right now, the industry seems to be deciding whether men like Brown and Moreno are their parties’ outsiders or their role models when it comes to crypto. Simply put, it wants to make friends.

And the GOP looks very friendly.