In a stunning turn of events, the crypto industry emerged as one of the biggest winners of the 2024 U.S. elections. As the dust settles, it’s becoming clear that the sector’s growing political clout and strategic backing of key candidates paid off in spades.
Trump’s Crypto Embrace
Leading the charge was none other than President-elect Donald Trump, who has become an outspoken advocate for cryptocurrencies. Throughout his campaign, Trump touted his own NFT collection and promised a raft of crypto-friendly policies, from pardoning Silk Road founder Ross Ulbricht to reining in the SEC.
Trump is surrounding himself with a team of crypto enthusiasts, including vice president-elect JD Vance, a noted Bitcoin holder, and transition team co-chair Howard Lutnick, a vocal supporter of stablecoins like Tether. The incoming administration’s pro-crypto stance is a marked shift that bodes well for the industry.
Crypto PACs Flex Their Muscle
Beyond the presidential race, crypto made its presence felt in Congressional contests nationwide. Industry Super PACs like the Blockchain Association’s FairShake poured millions into key races, notching an unbroken string of victories.
In the Senate, crypto helped flip several seats, ousting prominent critics like Ohio’s Sherrod Brown, the banking committee chair. His replacement, crypto entrepreneur Bernie Moreno, is expected to push for a more innovation-friendly regulatory approach.
Though it’s hard to quantify crypto’s exact electoral impact, there’s no doubt the sector’s strategic investments helped Republicans regain the Senate and hold the House.
According to a political strategist familiar with several crypto-backed campaigns
DeFi’s Regulatory Reset
For the burgeoning DeFi space, the Republican sweep brings the prospect of a long-awaited regulatory overhaul. Many DeFi tokens have existed in a grey area, resembling unregistered securities. But with crypto-skeptic SEC chair Gary Gensler likely on his way out, the agency appears poised to offer clearer rules treating these tokens as a new pseudo-equity asset class.
While some oversight is likely, the market has reacted positively, with DeFi “blue chips” rallying on the potential for a more balanced regulatory approach. For founders, this could provide a path to operate more like traditional companies, unlocking value for token holders.
Banks Poised to Embrace Crypto
The ascendant Republicans have also set their sights on the “Operation Choke Point 2.0” policies that have restricted banks from serving crypto clients. Between Trump’s appointments to key regulatory posts and pressure from crypto-friendly lawmakers, banking access for the industry is likely to expand significantly.
- Expect to see the end of the SEC’s SAB 121 rule, which made crypto custody prohibitively expensive for banks
- Stablecoin operators like Tether will benefit from allies in the administration and potential banking partners
- Banks may even enter the crypto market directly by issuing their own stablecoins and exchange services
Prediction Markets Called It
Amidst the election cycle, crypto-based prediction markets like Polymarket demonstrated their power, consistently outperforming traditional polling. By harnessing “the wisdom of the crowd,” these platforms accurately foresaw the Republican wave when pundits were still favoring Democrats.
Prediction markets have proven to be the breakout crypto application for the political sphere. They repeatedly beat the experts in forecasting these midterm results.
Noted a researcher studying the accuracy of prediction platforms
As prediction markets gain steam, they are poised to become fixtures of the political landscape, much like polling and punditry. For the crypto world, it’s a powerful proof point for the technology’s real-world utility.
The Road Ahead
All told, the 2024 midterms marked a turning point for crypto’s role in the political realm. Through a combination of strategic donations, grassroots enthusiasm, and sheer market power, the industry has arrived as a major player in U.S. politics.
In the coming months and years, expect to see a burst of crypto-friendly legislation, from clearer rules for DeFi to a potential “Bitcoin Reserves Bill” establishing a new crypto-focused sovereign wealth fund. The winds of change are blowing, and they’re carrying the unmistakable scent of blockchain.
