The cryptocurrency sector is continuously attempting to sell us new products. This election season, a new political group allegedly eager to support all things pro-crypto is emerging: the bitcoin voter.
Coinbase, a cryptocurrency trading platform with more than 100 million users worldwide, has launched its own voter registration initiative and is ranking candidates on their friendliness toward crypto issues. The Crypto Council for Innovation, a pro-crypto trade group that represents platforms like Fidelity and Gemini, purportedly published data last Wednesday purporting to indicate that one in seven voters “hold crypto and say that they are ready to vote for pro-crypto candidates.” In an effort to prove their expertise in the cryptocurrency space, a small but rising number of political campaigns have begun accepting bitcoin donations.
All of this is done to support the idea that there might one day be a sizable group of people who donate to and vote for pro-crypto candidates. It’s still early on, to be clear. Although the approaching midterm elections are just a practice run, the folks behind the massive effort to turn out crypto voters said that the ultimate goal is to create a voting bloc that is ready to support the crypto business.
Nevertheless, it’s unclear whether this tactic will necessarily be successful given that crypto owners already span a wide range of political ideologies. Some detractors also draw attention to the fact that the libertarian philosophy that underpins the cryptocurrency movement may not be compatible with the idea of major crypto businesses pushing users to participate in the mainstream political system.
According to David Golumbia, a professor at Virginia Commonwealth University who has written about the politics of bitcoin, “insofar as such a person exists, they are probably somebody who is already deeply committed in the cryptocurrency field in one way or another.” The irony is that there are so many anti-government and anti-democratic viewpoints present throughout the area.
Who are the crypto voters?
The individuals in charge of this campaign do have some understanding of who these potential crypto voters are. According to Pew data released in August, Americans under the age of 50 and those with higher incomes are more likely to utilize cryptocurrency. Black, Hispanic, and Asian Americans are slightly more likely to utilize cryptocurrency than white Americans, and men are around 14% more likely than women to do so. Some strategists claim that enough individuals now own cryptocurrency to give the movement some political power, even though it is far from certain that utilizing crypto will be sufficient to make someone desire to vote for pro-crypto causes. Approximately 16% of US adults as of right now have used cryptocurrencies at least once.
The moment candidates start polling on Web3 and see just how many people use it, Chris Lehane, a well-known Democrat political consultant who now works for Haun Ventures, which was founded by former Andreessen-Horowitz partner Kathryn Haun, said, “One of the ways that you’ll accelerate policy progress on Web3.” You simply don’t see cohorts of this size coming out of politics.
Cryptocurrency is currently not a partisan issue in the same way that significant subjects like abortion, climate change, and gun control are. Both Democratic and Republican politicians have endorsed and denounced cryptocurrencies, and both parties are represented in the Congressional Blockchain Caucus, a group of lawmakers who are researching the technology. Similar percentages of Democrats and Republicans support fewer controls for cryptocurrencies, according to a Morning Consult poll released late last year, and surveys commissioned by pro-crypto companies have also shown similar results.
A recent Morning Consult survey, commissioned by Haun Ventures, found that “Web3 voters” in New Hampshire, Nevada, Ohio, and Pennsylvania tended to lean slightly Democratic and that likely swing state voters support the ideology behind Web3, a term that some use to refer to technologies like cryptocurrencies and the blockchain.
This month, a survey by GMI PAC, a super PAC supported by a number of cryptocurrency-focused venture capital and investment firms as well as the hedge fund run by Anthony Scaramucci, a minor figure from the Trump administration, was also released, highlighting the fact that many voters are currently actively using or may want to use cryptocurrencies.
The business is spending tens of billions of dollars, according to Stephen Diehl, a well-known opponent of cryptocurrencies and co-founder of the Center for Emerging Technology Policy. “Their attempt to gain the electorate is a rather natural extension.”
Crypto companies are still urging people to support pro-crypto candidates even though they don’t seem to fit neatly into any one party. Coinbase built a “legislative action site” inside its app, which is generally used to track cryptocurrency prices and conduct cryptocurrency trading, after announcing its voter registration campaign this past summer. Using information gathered about their public statements, legislative history, and whether or not they accept cryptocurrency campaign donations, this portal ranks politicians according to their support for cryptocurrencies. For instance, the approval rating for Majority Leader Chuck Schumer is skewed against Kirsten Gillibrand, the Democratic senator from New York.
Miti Sathe, who oversees community engagement at Coinbase and formerly worked on the Obama campaign, said, “We’re trying to build things that are educational infrastructure that outlive this midterm, that outlive 2024 elections, that give people a way to engage in the process, not only just in October and in an election year, but [in] March of an off-year.” We continue to be excited about the crypto-related concerns for our community because that is what the community is telling us. “
While Sathe is expecting that soon enough, crypto policy will become an important enough vote topic that more authorities take a public stance, many of the politicians currently included in Coinbase’s systems have no ratings at all. Brian Armstrong, the CEO of Coinbase, has said that the app could eventually help politicians solicit donations and expand to elections outside the US. In the meantime, the app also directs Coinbase users to a website that sends a form email to politicians urging them to support “pro-crypto policies.” Armstrong, however, prohibited internal political discussions after employee conversations over racial justice and George Floyd’s death in 2020 and said the corporation would “concentrate lightly on causes” unrelated to its core activities.
Beyond personally interacting with people, some pro-crypto politicians are moving toward accepting bitcoin donations. There is little distinction between someone transferring campaign cryptocurrency who subsequently converts it into easily usable dollars and someone who converts the cryptocurrency themselves before making a donation. However, there are already a number of venues where politicians can accept cryptocurrency, including Coinbase, BitPay, and a firm called Engage Raise that specializes in politics. With Engage Raise, sixteen candidates have signed up to accept donations in cryptocurrencies including bitcoin, ethereum, and dogecoin. Other politicians actively promote cryptocurrencies on their campaign websites.
Mixed outcomes have been obtained. According to Engage Raise’s CEO Martin Dobelle, between 10 and 100 people have “probably around halfway” donated cryptocurrency to the organization. The site has processed “more than 500 crypto donations” this year, according to BitPay CEO Bill Zielke, who declined to disclose how many of those were particularly for political campaigns as opposed to other causes. Blake Masters, a Trump-backed Republican venture entrepreneur running for the Arizona Senate, raised more than $500,000 at the same time by auctioning off 99 NFT copies of the book he co-wrote with Republican contributor Peter Thiel, along with the chance to go to social events.
Although that number may not include all donations made in the third quarter of 2022, data from the Federal Elections Commission indicates that campaigns have revealed at least 350 receipts for bitcoin transactions between the start of 2021 and the end of this year. Even said, during an election year, a single campaign may process many times more traditional cash receipts than cryptocurrency payments. The FEC’s data focused on just a few races, including Masters, Sen. Ron Wyden, and an Oregon Democratic candidate named Matt West. The FEC permits donations made via cryptocurrencies, but it also has guidelines for how those donations should be disclosed.
According to Sarah Bryner, the head of research and strategy at OpenSecrets, “States are writing guidance on this, but it is early.” Therefore, I believe that candidates and political parties are a little bit hesitant to receive or seek money of this kind.
The greatest impact of cryptocurrency on politics, though, isn’t manifested in bitcoin or ethereum. Everything revolves around US dollars, and lots of them. The Blockchain Association, Web3 Forward, and Crypto Innovation are just a few of the pro-crypto political action committees (PACs) that have sprung up with funding to assist pro-crypto politicians in both parties. Think tanks and lobbying companies have already flocked to the Beltway in an effort to sway how lawmakers draft upcoming crypto legislation. Sam Bankman-Fried, the wealthy creator and CEO of the cryptocurrency platform FTX, is among the most significant individual funders this election cycle and has claimed that he would spend up to $1 billion on the 2024 race, though he recently scaled back the estimate.
Even yet, while being merely a small component of a larger movement to integrate cryptocurrency into institutional politics, the campaign’s organizers expressed optimism that cryptocurrency owners will become a significant force in future elections. While the idea is undoubtedly exciting for crypto entrepreneurs, some are already concerned about the potential implications of an influential crypto voting base.
“You approach a person and inquire, ‘Well, who are you voting for?’ ‘Which one is better for crypto?’ they respond.” said Rohan Grey, a Willamette University law professor who counseled Rep. Rashida Tlaib on stablecoin regulation. “Being a single-issue voter about crypto is particularly harmful to democracy because a nontrivial proportion of candidates either don’t truly trust in the election process or have overtly fascist objectives.”
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