How crypto became an election issue again in 2024

Last week, Donald Trump spoke in front of the world’s biggest Bitcoin conference in Nashville. The Republican presidential nominee, who has for months positioned himself as the “crypto candidate,” reportedly raised $21 million at the event; just days after the conference he began selling a limited run of $500 high-top sneakers that read “Trump Crypto President” on their sides.

Meanwhile, the presumptive Democratic nominee, Kamala Harris, is reportedly meeting with crypto giants Ripple, Coinbase and Circle. Though Harris hasn’t made any formal statements about how her administration would address crypto, between the exchange meetings and conversations with crypto enthusiast Mark Cuban, it’s clear she is considering a more open stance than the Biden administration.

The fact that both candidates are vying for the crypto vote suggests that even though Bitcoin and other cryptos are far from their all-time high, the industry as a whole still yields significant influence—and shows, yet again, just how quickly the alternative currency’s political fortunes can change.

Despite all of the attention, the crypto world is still a small part (numerically) of the voting public. The Federal Reserve says only 7% of adults held or used crypto last year, down 3 percentage points from 2022 and down 5 percentage points from 2021. But the industry has withstood several scandals and spent tens of millions of dollars over the past several years to gain legitimacy. There are also several crypto Super PACs that are shaking up down-ticket races for crypto skeptics. That’s getting Washington’s attention. 

Despite some well-publicized hiccups, the crypto sector has a total global market cap of $2.24 trillion, which is higher than the market cap of all but 10 countries in the world. Like it or hate it, crypto has grown to a point where politicians can’t ignore it.  

“The crypto crowd is willing to vote and pay for regime change in Washington,” says James Angel, a faculty affiliate at Georgetown McDonough’s Psaros Center for Financial Markets and Policy.

The politics of crypto

Globally, cryptocurrency accounted for about 0.4% of the entire energy consumption in the world in 2022, according to an International Energy Agency report released in January. That’s about the same amount as the Netherlands consumed. The carbon footprint of Bitcoin miners alone from 2020-2021 was equivalent to burning 84 billion pounds of coal or operating 190 natural gas-fired power plants, according to the United Nations. That puts Trump and Harris in a potentially uncomfortable spot, where they’ll ultimately have to weigh negative climate impacts against the advantages of embracing crypto. 

In late January, the Biden Administration announced measures meant to address the energy consumption of the crypto world, with the U.S. Energy Information Administration (EIA) launching a survey of electricity consumption by mining companies. Those companies will be required to offer a detailed look at their energy use. But a lot of work remains to be done by whoever next occupies the White House.

Crypto has also become a more valid financial asset in the past year. With the SEC’s blessing for finance firms to offer exchange-traded funds (ETFs), which track Bitcoin’s price, investors who have avoided the assets previously now feel a greater sense of safety. It’s also now much easier to invest in Bitcoin and crypto, as people can use the advisors they’ve trusted for years, versus startups and crypto companies that are still trying to step out of the shadow of FTX.

The crypto candidates

Part of the reason Trump has found so many backers is due to his vow to create a strategic national Bitcoin reserve if elected. Doing so would take a significant amount of crypto out of the market, which would likely cause a surge in price. Bitcoin enthusiasts who support Trump are betting that his election will make them notably richer.

They’re also counting on Trump to oust SEC head Gary Gensler, who has often acted as a roadblock for cryptocurrencies. Trump, at his speech on Saturday, promised under a second term “The rules will be written by people who love your industry, not hate your industry.”

That’s making industry leaders feel heard, after a long history of feeling second-class to other financial markets. The question now, though, is how Harris will respond.

One crypto lobbying group, The Digital Chamber, is already urging her to mirror that feeling of inclusivity and foster an “open dialogue” with industry leaders, as well as include pro-crypto language in the Democratic platform.

“Both Democrats and Republicans now realize that we need reasonable regulation that allows us to innovate with this technology while still protecting investors,” says Angel.

Harris, he says, has the opportunity to distance herself from Gensler’s approach, which has won the party no fans in the crypto community. “She needs to push for a regulatory regime that allows the simple registration and trading of assets in crypto wrappers,” he says.

Angel says Trump might have an edge, though, as he seems to have latched on to three key factors. 

“Crypto appeals to people who distrust government institutions, just like MAGA people,” he says. “The high price of crypto assets [also] means that crypto people have a lot of money to donate to his campaign.”

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