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Like many other sectors within the American economy, the digital asset industry – particularly Bitcoin mining – is becoming increasingly subsumed into the upcoming US Presidential election. Though 2024 marks the first time Bitcoin has been such a high-profile issue in the world’s most consequential political contest, it is not a surprise to us that this has occurred. Counter to the prevalent doom and gloom narrative, long positing that Bitcoin would be regulated harshly in the US or even pushed into irrelevancy by agency and legislative crackdowns, MRP has posited for years that BTC would be more likely to carry great leverage in democratic states. Political power in the US is derived from the voters in an election and, in the succinct words of Microstrategy CEO Michael Saylor, “You’re not going to win any votes by opposing Bitcoin“.

In fact, not only will candidates potentially stand to lose votes, but an election challenger could easily angle against an anti-Bitcoin policy stance to gain those votes. Though “crypto voters” may not have been a major constituency in past Presidential elections, the country has changed significantly since the last race for the White House in 2020. Data from multiple different sources including NYDIG and Unchained, collected throughout various periods of 2021-2023, has shown that roughly 20% - 25% of American adults/investors owned Bitcoin within that time frame. In a February 2022 Intelligence Briefing, we wrote: “it only makes sense that democratically elected politicians will continually become more crypto-friendly when nearly one of every four potential voters is personally invested in Bitcoin,” and this dynamic may now be playing out before the American public.

The proportion of crypto owners (some of which could be considered crypto voters), is likely to have increased substantially in the past five months due to the wrapping up of digital assets into easily accessible ETF products that have proven to be extremely popular. It is not unbelievable to think that some voters will cast their ballot in the interest of their own net worth, especially as sentiment about the economy is always high up on the list of voters’ top considerations.

Not only has the SEC fallen well-short of its most ambitious goals in wrangling the so-called “wild west” crypto economy over the past couple of years, Congress is already filled with pro-Bitcoin voices on both sides of the aisle, with high profile legislators and former Presidential candidates like Senators Kirsten Gillibrand (D-NY) and Ted Cruz (R-TX) receiving “A” ratings from the Stand With Crypto Alliance – a Coinbase-affiliated nonprofit that now boasts 440,000 members and an associated Political Action Committee (PAC). This pro-crypto dynamic recently played out in both the House of Representatives and the Senate, wherein an explicit attempt to undo of the SEC’s Staff Accounting Bulletin No. 121 (SAB 121) via Congressional Review Act (CRA) received the support of bipartisan majorities. We covered the attempt to rescind SAB 121 in our May 24 Crypto Wrap, noting that the rule requires a firm that custodies a customer's cryptocurrencies should record them on its own balance sheet – a very unorthodox accounting treatment that could have major capital implications for banks trying to work with crypto clients.

Despite heavy congressional backing, President Biden ended up vetoing the CRA in a vote of solidarity with the SEC. That reinforced a relatively crypto-skeptic bend within the Biden White House. At times, the administration has been openly hostile toward Bitcoin mining, repeatedly proposing the implementation of a Digital Asset Mining Energy (DAME) excise tax equal to 30% of the cost of the electricity miners utilize for operations. The tax would be implemented based on faulty perceptions that Bitcoin mining causes disproportionate damage to the environment and is stealing electricity away from other more productive uses and putting undue strain on already stretched electric grids. MRP has countered both of these narratives in the past, proposing that, not only do Bitcoin miners utilize a much more sustainable power mix than any country in the world, miners also seek out cheap (especially excess) electricity in areas with relatively underutilized resources, thereby incentivizing more investment and into those local grids by utilities.

The campaign of Biden’s opponent, presumptive Republican nominee and former President Donald Trump, has taken on a totally opposite stance. Just this week, Trump held a closed-door meeting with a dozen bitcoin mining executives and experts. After this meeting, Trump took to social media to state that “We want all the remaining Bitcoin to be MADE IN THE USA!!! It will help us be ENERGY DOMINANT!!!” While this would be virtually impossible to achieve in practice, it does show that Trump is going all-in on an alliance with the Bitcoin mining industry, and sees the relationship as a tie-in with his efforts to position himself as a proponent of greater oil and gas production in the US. MRP has documented Trump’s efforts to prioritize energy within his platform and to raise cash from potential megadonors in the fossil fuel industry. “As an industry we are committed to raising over $100 million and turning out more than 5,000,000 voters for the Trump reelection effort,” BTC Inc. CEO David Bailey told CNBC. Bloomberg reports that “crypto billionaires” and their allies have amassed a $160 million war chest to bolster US candidates in the 2024 election cycle.

The former President has been courting crypto-focused voters for well over a month, claiming “[SEC Chairman Gensler] is very much against it… The Democrats are very much against it.” Upon reception of an official nomination from the Republican National Committee, Trump will become the first major party Presidential candidate to officially accept cryptocurrency contributions. However, independent candidate Robert F Kennedy, who is reaching double digit support in a number of recent swing state polls, beat him to the punch on accepting digital asset donations this year. President Biden’s campaign is reportedly preparing to initiate the reception of crypto donations as well. The narrow margin between Biden and Trump could ultimately be swung by how many ballots they can peel away from the center and crypto is one issue where Kennedy attracted a groundswell of support when he was alone on the issue.

June 10, 2024: Bitcoin Miners Moving Into Traditional Data Centers’ Cloud Market, Could Soon Become Targets for M&A →

May 28, 2024: Grayscale’s Bitcoin Drain Could be Test Case for Coming Distribution of 142,000 BTC in Bankruptcy Payout →

May 21, 2024: ETH Surges on Emerging Potential for Spot ETF Approvals, Final Decision Date on Deck This Week →

April 23, 2024: Bitcoin Hash Rate Holds Strong in Wake of Halving, Suggesting Miner Margins May Remain Intact →

March 25, 2024: SEC Reportedly Probes Ethereum Foundation but Would Struggle to Backtrack on ETH’s Commodity Status →

March 5, 2024: Bitcoin’s Dominance over Crypto Holds Strong Amid New ATH, ETF Hype Could Help Ethereum Pick up the Slack →

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