Over the past election cycle, the crypto industry has backed such campaigns, contributing over $100 million to the fight to elevate crypto as a central voting issue while reinventing crypto-friendly candidates.
By Wednesday morning, industry efforts had mainly succeeded. The latter was Republican candidate Donald Trump, who, in our opinion, has shown much support for Bitcoin throughout the year and triumphed over his Democratic rival Kamala Harris.
In House and Senate races, crypto Political Action Committees (PACs) also had strong wins, including in Ohio, where Republican candidate Bernie Moreno topped the crypto-critical Senator Sherrod Brown.
Bitcoin hit another record high on Tuesday night as Trump’s election results became more solidified, topping $75,000. In response, stocks related to the crypto sector shot up, including Robinhood Markets and MicroStrategy.
As Washington pressure builds, crypto advocates expect the Trump Administration to roll back burdensome regulatory pressure on the industry. At the same time, a pro-crypto Congress will continue to pursue legislation to encourage growth and innovation in the space.
“This is a monumental victory for crypto,” said Kristin Smith, CEO of the Blockchain Association, a lobbying group based in Washington, D.C., in a statement to TIME. “We’ve reached a pivotal moment, with the right leaders in place to secure lasting policy for the industry.”
Trump’s Pro-Crypto Stance Resonates with Industry Advocates
Many crypto enthusiasts supported Donald Trump instead of Kamala Harris for different reasons. During his campaign, Trump openly praised cryptocurrencies, contrary to his earlier skepticism.
At a Bitcoin conference in Nashville in July, Trump proposed creating a federal Bitcoin reserve and called for more Bitcoin mining to happen in America. Trump suggested that Bitcoin’s adoption could be sped up by solving the problem of price unpredictability.
A major reason for Trump’s popularity was his pledge to replace Gary Gensler, the chair of the Securities and Exchange Commission (SEC), who has repeatedly sued crypto schemes for violating securities law.
Gensler is known among the crypto community as a controversial figure. Some people believe he is hampering the industry’s innovation. However, Gensler has said that his actions are needed to protect consumers from skyscraper crypto crashes, including Terra Luna and FTX in 2022.
Although Gensler’s term runs through 2026, analysts say they foresee him stepping down when Trump takes office if he follows the precedent set by SEC chairs who have resigned upon a switch in presidential administration.
With a change in SEC leadership, more comprehensive access to crypto products in mainstream financial markets may become possible. For several years, the SEC has been reluctant to approve cryptocurrency ETFs—funds that expose investors to crypto without owning them—.
However, Bitcoin ETFs were approved after a court ruling in January. In a more favorable SEC, smaller cryptocurrencies like Solana XRP, to name a few, may soon become available with ETFs.
Trump and Elon Musk, known cryptocurrency supporters, are making a notable alliance. On election night, Dogecoin, Musk’s meme crypto, jumped 25 percent to 21 cents.
Senate Developments and Crypto’s Strategic Influence
The Senate results also brought vast political contributions from the crypto industry to crypto advocates. Fairshake, for its part, led PACs that gave over $100 million to support pro-crypto candidates and take on those against the industry, tipping the scales of Congress in favor of crypto legislation.
Virtually all lobbyists had come together to attempt to pass a bill that would transfer cryptocurrency oversight to the lesser-known Commodity Futures Trading Commission (CFTC) rather than the SEC.
Ohio was the focus of PAC efforts, which spent around $40 million trying to oust Democrat Sherrod Brown, who chairs the Senate Banking Committee and opposes crypto. Moreno, who attends crypto conferences regularly, had promised to fight to “defend crypto in the US Senate.” Moreno won on election night, shifting control to the Senate.
Fairshake chided American Jobs, a Crypto PAC affiliated with it, for Brown’s defeat. However, spokesperson Josh Vlasto said that Sherrod Brown’s ally, Elizabeth Warren, was a top opponent of cryptocurrency, and thanks to our efforts, he will be leaving the Senate.
Senator-elect Moreno’s win from behind shows Ohio voters are choosing a leader who will reject partisan politics will put American economic interests ahead of special interests. It will keep US leadership in technology.”
Senator-Elect Moreno’s win from behind indicates that Ohio voters want a leader who will eschew partisanship. This leader will prioritize American economic interests over special interests and maintain US technology leadership.
Crypto Political Influence Grows
After Republican Tim Sheehy beat out Democrat Jon Tester in Montana, crypto-backed political action committees saw success as they are much talked about.
The Impact of Predictions Market
Crypto supporters are also touting prediction markets where users can bet on election outcomes with crypto. Proponents say using these markets, with their stake in the outcome, is more reliable than traditional polls.
However, critics say prediction markets are too unpredictable and subject to personal biases. During the campaign, prediction markets consistently leaned toward Trump compared to conventional polling, showing the pair locked in a tight race.
For example, Polymarket’s odds on November 3 showed Trump with a 62% chance of winning. In the days leading up to election day, the initial results began trickling in on prediction markets. Kalshi showed the Republicans had a 44% chance of winning the presidency, house, and Senate.
During this time of the presidential election in recent months, up to $2 billion has been wagered on the presidential election on Polymarket, according to Dune Analytics. It is unclear whether prediction markets consistently demonstrate superior accuracy to polls. Still, their performance in this election suggests that they may take on more of a role in future political forecasting.
Uncertain Prospects for Crypto Under Trump Administration
The future of cryptocurrency under the Trump administration is still in doubt. The crypto market is as susceptible to global events (such as the invasion of Ukraine by Russia) as it is to broader economic trends. In addition to previous price drops stemming from the collapse of past fraudulent crypto ventures, including FTX in a purportedly deregulated space.
Raising the stakes for volatility and risk in the U.S. financial system is the criticism of opening up more American citizens to cryptocurrency.
Additionally, there are question marks regarding Trump’s absolute dedication to pushing the crypto industry or taking action on his pledges. In a statement to TIME, Tim Kravchunovsky, founder and CEO of the decentralized telecom network Chirp, said that if he doesn’t deliver on these promises quickly, ‘the euphoria could turn into disappointment, resulting in a crypto market volatility.’
The Role of the Crypto Industry in Shaping the US Election
In the months leading up to election day, the cryptocurrency sector was a force to be reckoned with on the federal and state levels.
As reported by CoinDesk in December 2023, intending to make themselves known in the political world, three affiliated super political action committees (PACs) backed by top crypto heavyweights have announced they will spend a jaw-dropping $78 million promoting candidates who support crypto and its underlying technology.
Fairshake, one of the three super PACs, raised over US$200 million using donations from prominent stakeholders. This funding includes contributions from the Winklevoss twins and well-known companies like Kraken and Coinbase.
According to the group, it spent around US$10 million on negative ads to persuade California voters to cast their ballots against Representative Katie Porter (D) in the state’s March Senate race, in which she lost.
In January, another PAC, Cedar Innovation Foundation, backed by unknown donors, also tried to lobby crypto skeptic Senate Banking Chairman Sherrod Brown (D-OH). Super PAC support until President Biden withdrew from his candidacy tended to support Republican candidates.
When Vice President Kamala Harris entered the presidential race in 2020, the dynamics changed quickly, but she didn’t immediately comment on the crypto issue.
Crypto4Harris, a new formation of sector advocates, including crypto billionaire Mark Cuban and SkyBridge Capital founder Anthony Scaramucci, immediately backed Harris for her more favorable stance on the industry.
An aide to Harris’ team said on August 21 while at the Democratic National Convention that she would ‘support policies to expand this sector.’ But Harris continued to champion this position at a Wall Street fundraiser a month ago, in which she also touted her vow to protect consumers as a linchpin of her ‘Opportunity Economy’ agenda.
During a rally in Erie, Pennsylvania, on October 14, Harris again promised her administration would set up regulations for digital assets, which she reiterated her administration will ‘see to foster the birth and growth of the crypto sector.’
Ripple Labs co-founder Chris Larsen also donated US $1 million worth of XRP tokens to Future Forward, a major super PAC supporting Harris’ presidential bid. However, Ripple Labs has been embroiled in a long fight with the SEC over XRP sales.
The SEC brought up the case again when it filed a motion on Oct. 2 to appeal Judge Analisa Torres’ ruling in Ripple’s favor in August.
Current US Regulatory Framework for Cryptocurrency
The regulatory framework on the U.S. side of the crypto industry is changing, and more changes are expected in the next few years. At present, different government agencies regulate respective aspects of the industry in accordance with their mandates and objectives.
According to the US Securities and Exchange Commission (SEC), under the chairmanship of Gary Gensler, who was nominated for the post by US President Joe Biden, it acts as the main agency responsible for regulating securities in the US. The SEC says many cryptocurrencies are securities, which means they are subject to federal securities laws.
By contrast, cryptocurrencies, like Bitcoin and Ethereum, are considered commodities by the Commodity Futures Trading Commission (CFTC), which has regulatory authority over futures and options contracts. This stance is based on their decentralized nature and lack of government or central authority.
Both crypto exchange faces enforcement actions from both agencies for legal violations. For example, in March 2023, Binance founder Changpeng Zhao was charged by the CFTC for breaking the Commodity Exchange Act. Meanwhile, the SEC has been in litigation against many crypto companies for several years.
Key US Crypto Legislation Under Consideration
As cryptocurrencies increasingly enter the mainstream, US lawmakers are under increasing pressure to develop a clear and robust regulatory framework for this fast-evolving industry.
The Financial Innovation and Technology for the 21st Century Act (FIT21)
The FIT21 Act, or the Financial Innovation and Technology for the 21st Century Act, is the first bill that touches on cryptocurrencies to pass one side of Congress. This act creates a structured regulatory framework and imposes more CFTC supervisory control of digital assets than the SEC.
Some Democratic leaders voiced worries that FIT21 would bring uncertainty and defeat existing legal precedents, but they decided against assembling Democrats to vote against it. On May 22, the House voted for FIT21 with a vote of 279 to 136, a measure that has gained enthusiastic bipartisan support.
Then there was Nancy Pelosi, the former House speaker and a longtime favorite of crypto executive Sam Bankman-Fried (who has given her money to the influential House Majority PAC), who voted in favor. Sources at The American Prospect say she had been considering her position for days before the vote.
In September, Representative John Rose (R-TN) introduced the BRIDGE Digital Assets Act, which represents additional legislation that could impact pro-digital asset voters. The proposal here is something of a joint advisory committee comprised of SEC and CFTC members to facilitate collaboration. The act was referred to the Financial Services and Agriculture Committees, and the House is set to reconvene between November 12 and November 21.
The Responsible Financial Innovation Act
The Responsible Financial Innovation Act offers a different approach to regulation than FIT21. In July, Senator Cynthia Lummis (R-WYO) and Senator Kirsten Gillibrand (D-NY) reintroduced this bipartisan proposal under review by the Committee on Banking, Housing, and Urban Affairs.
Like FIT21, the Responsible Financial Investment Act is similar, but in key ways. While FIT21 tackles the issue of finding the correct terms on which to sell items on the fintech level, the Responsible Financial Innovation Act prioritizes consumer protection and attacking illicit financial activities, which, according to the White House, is part of its priorities too.
Digital Asset Anti-Money Laundering Act
While FIT21 and the Responsible Financial Innovation Act have broad regulatory reach, we focus on the Digital Asset Anti-Money Laundering Act on the issues related to money laundering and illicit financial activities in digital assets.
A notable political ally of the current administration, Senator Elizabeth Warren has signaled support for the bill, along with Republican Senators Lindsey Graham (R-SC) and Roger Marshall (R-KS), who have 19 sponsors behind the idea.
What Should Investors Expect?
Trump has recently stated that he’s open to cryptocurrency if he’s elected. However, many crypto experts say that regulation is a good idea and that it has drawn in more serious investors.
In them, Trump’s win will have far-reaching consequences for the future of crypto regulation and the entire crypto industry.
Bitcoin Price Reaches $80K
Donald Trump’s victory has sparked Bitcoin’s best weekly performance since February.
Less than a week after Trump secured a second term in the US presidential elections, Bitcoin’s price surpassed $80,000, and its market capitalization exceeded $1.5 trillion for the first time in history.
According to data from Bitstamp, the leading cryptocurrency is nearing an inflation-adjusted record high following a sharp surge of nearly 4.5%. Smaller cryptocurrencies like Ether, Dogecoin, and Cardano also registered gains.
As part of his campaign, Trump announced that he would make the U.S. the leader in the cryptocurrency space by creating a strategic Bitcoin reserve and a pro-crypto regime. After his victory on November 6th, Bitcoin has risen by 15.65 percent and is poised to record its strongest weekly performance since February.
Bitcoin Price Soars by 80% in 2024, Surpassing Stocks and Gold
In 2024, Bitcoin rose by around 80 percent, fueled by solid demand for U.S.-based exchange-traded funds (ETFs) and the Federal Reserve’s cutting interest rates. On this dramatic rise, Bitcoin outperforms traditional investments like stocks and gold.
Spot Bitcoin ETFs, like the $35 billion iShares Bitcoin Trust (IBIT) from BlackRock Inc., have played a major role in surging Bitcoin prices and have driven the current Bitcoin price rally.
On November 8, data from Farside Investors showed IBIT had $1.4 billion in daily net inflows. Aside from boosting the ETF’s trading volume on the day before to an all-time high, former President Trump’s political resurgence has also influenced the cryptocurrency sector to shine bullishly.
Bitcoin’s Next Target: $100,000
The price of Bitcoin is above $88,000 now, and market experts predict it will soon rise to $100,000.
While Bitcoin’s historical trend of establishing record highs ’50 to 60 days after U.S. elections suggests Bitcoin topping $100,000 by January 2025, the most popular analyst on crypto Twitter Crypto Rover noted this week, echoing that we’re on the heels of that and BTC could be heading towards $100k by January 2025.
