NFTs
NFTs of Trump photos highlight the arrival of crypto in the campaign
Hannah Miller and María Paula Mijares Torres | Bloomberg
This year’s resurgence of cryptocurrency markets has made digital assets a hot topic in the campaign ahead of the US elections in November, and the political battle lines are becoming much sharper.
Donald Trump has staked out favorable terrain for crypto – including by selling non-fungible tokens inspired by his photo – after President Joe Biden’s administration became a scourge of the industry famous for its many high-profile scams and blowups.
However, despite all the rhetoric and around $85 million in donations to crypto-oriented political action committees, many experts are skeptical that any of these measures will have much influence at the polls. Ultimately, voters simply don’t care enough about the issue for it to influence them in a meaningful way, according to Lonna Atkeson, a political science professor at Florida State University.
“For most people, Bitcoin isn’t even on the radar,” said Atkeson, who serves as director of FSU’s LeRoy Collins Institute. For those who own cryptocurrencies, they may view it simply as an investment rather than a political statement, she added.
Regardless, Bitcoin and other digital assets have emerged as talking points alongside other hot-button issues such as inflation, abortion, and the wars in Ukraine and Israel.
Take the case of Donald Trump, who threw his full support behind the industry last week on a day off from court in his silent trial, when he hosted a gala for fans who purchased at least 47 NFTs from his MugShot collection. Those who made the bulk purchases even received a physical trading card containing a fragment of the suit the former president wore when he was booked following his August indictment on election racketeering charges.
Meanwhile, other politicians such as independent presidential candidate Robert F. Kennedy Jr. and Texas Republican Senator Ted Cruz are making appearances on the crypto conference circuit.
And after nearly four years of contentious relations between President Biden’s administration and the industry, political action committees are raising donations and spending them on ads targeting anti-crypto politicians.
A crypto group with about 440,000 members launched a PAC called Stand With Crypto on Friday. It joins three crypto super PACs — Fairshake, Defend American Jobs and Protect Progress — that have raised about $85 million between 2023 and 2024, according to a Bloomberg analysis of Federal Election Commission data.
Deep-pocketed cryptocurrency donors scored an early victory in March when Democratic Rep. Katie Porter lost the California Senate primary election after a series of attack ads and get-out-the-vote efforts.
However, it is debatable how much credit cryptocurrency donors deserve for this outcome. Porter was at a significant disadvantage from the start, as he ran against experienced “celebrity candidate” Rep. Adam Schiff, according to Dennis Kelleher, executive director of the financial reform nonprofit Better Markets. Schiff has been in Congress since 2001 and was the lead impeachment manager in Trump’s first impeachment trial. Kelleher called the crypto lobby’s victory lap in that race “laughable.”
Attack Ads
An attack ad against Porter paid for by Fairshake didn’t even mention her anti-cryptocurrency stance, focusing instead on where she was receiving campaign donations.
“Obviously, these commercials didn’t think Bitcoin was the big game changer or they would have accepted it,” Atkeson said.
Still, skepticism regarding crypto’s influence at the polls is far from universal among political and market observers. Campaign dollars spent by PACs will continue to make crypto a part of the conversation, according to Strahinja Savic, head of data and analytics at FRNT Financial.
“We will only see more crypto this US election cycle, not less,” Savic said.
And unlike previous elections, millions of people involved in the industry are likely to vote in the next presidential race, said Campbell Harvey, a finance professor at Duke University.
‘This time is different’
“If you asked this question four or eight years ago, I would have said this is a really niche space and there is no story here,” he said. “But this time is different.”
Industry research has found that one in five voters in swing states care about crypto policy and there actually is such a thing as a “crypto voter,” according to Kristin Smith, CEO of the trade group Blockchain Association. And the fact that younger candidates are more interested in the topic could mean greater political focus on crypto in the future, she added.
“What we are seeing in some swing states where the presidential election is very close, or even in some Senate races, is that when such a small number of voters are intended to change the election, the position of the candidate has in the politics of encryption takes into account a significant number of people,” she said.
For Kelleher, at cryptocurrency critique group Better Markets, there is another significant number of people to consider: all voters who have been turned off by the long list of crimes and scandals associated with the asset class.
“It’s hard to believe that many people will conclude that voting for a bunch of criminals and predators is somehow in their best interest,” he said.
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With help from Bill Allison.