Come Election Day, Crypto Might Just Swing It for Trump

While there are many other issues up for discussion as the US Presidential elections draw nearer, the future of cryptocurrency has emerged as one of the most important considerations for a wide swathe of voters.

There’s a growing perception that former President Donald Trump has altered his previous stance to embrace the crypto industry, promising that if he wins, it will have a “good and solid future” in the US. But just how likely is it that Trump really will be good for crypto? And, more importantly, should voters prioritize its future over dozens of other important considerations, such as the rights to abortion, or the largely unchecked surge of migrants from Latin America who continue to pour over the border in large numbers every day?

Trump’s Pivot

During his first stint as president, Trump was widely perceived to be against crypto, voicing many of the same criticisms vocalized by other politicians, including that it’s used for money laundering and other illicit activities, and that it’s “based on thin air” with no tangible value.

But fast-forward to another presidential term, Joe Biden and the Democrats are currently in power, and Trump is the one vying to return to the White House. With his campaign under increased pressure amid the ongoing scandals associated with his criminal trials and the enormous costs they involve, suddenly he has shifted his narrative.

Earlier this month, Trump stunned the crypto world when he held a special event for holders of his non-fungible tokens or NFTs at his Mar-a-Lago resort in Florida. There, he told attendees that President Biden and the US Securities and Exchange Commission chief Gary Gensler are conspiring to try and shut down crypto. He presented his candidacy as the only possible choice for crypto enthusiasts.

BREAKING: DONALD TRUMP IS FINE WITH CRYPTO pic.twitter.com/SCJDKdHQUB

— Frank (@frankdegods) May 9, 2024

Trump’s turnaround on crypto comes following the Biden administration’s recent announcement that it intends to veto the H.J.Res. 109 SEC Crypto Bill, which would enable financial institutions regulated in the US to maintain custody of digital assets.

In the wake of that announcement, a number of prominent crypto industry voices slammed President Biden and the Democrats. Messari founder and Chief Executive Ryan Selkis warned on X, formerly Twitter, that if Biden is re-elected, he will likely introduce a slew of hostile anti-crypto regulations. Meanwhile, Charles Hoskinson, who co-founded Ethereum and now leads Cardano, accused Biden of hurting crypto in “every way possible.” He further pointed out that while Trump, in his first presidency, mostly ignored crypto, the Biden administration has launched a frontal assault on the industry, as part of a “coordinated effort to kill crypto”.

Trump appears to have taken notice of the Democrat’s anti-crypto crusade and is now aiming to attract dissatisfied enthusiasts. He recently pointed out that the crypto industry is moving away from the US due to political hostility. He added “we have to let them be here”, in order to stop the industry migrating away from the country.

Crypto Cannot Be Ignored

It’s easy to see why crypto is fast becoming a key battleground between Trump and Biden, as digital asset holders make up a surprisingly large percentage of voters.

A poll published by Paradigm on March 14 showed that 19% of registered voters in the US have previously owned crypto. That’s just under a fifth of the population, so clearly their wishes cannot just be swatted away.

What’s more, those crypto owners are among the most likely voters to switch their support from one candidate to another. Paradigm’s survey revealed that while just 39% of those previous crypto buyers voted for Trump in 2020, 48% state that they’re going to vote for him this year. Their numbers could be hugely significant in the many “swing-states” that will ultimately determine who ends up in the White House.

“This data collectively shows that crypto owners are themselves a swing vote demographic, one that could be decisive if the election is yet another razor-thin race,” the authors of Paradigm’s survey wrote.

Siddarth Singhal, Head of Business Development at Trilitech, a leading blockchain technology firm, said the importance of crypto in this election cannot be overlooked. He pointed out that it’s not only individual voters who count, but also financial institutions, many of which have warmed up to crypto themselves.

“One has to realize that the US has already had over 15% of its voter base interact with crypto, and that 13 of the top 25 U.S. hedge funds bought Bitcoin ETFs in the first quarter of this year,” Siddarth said. “That’s a decent penetration compared with any other major issues. There is no going back, as the trend is only headed in one direction.”

Should Voters Even Care?

A recent op-ed by BlockWorks editors Molly Jane Zuckerman and Jeff Albus kicked up a storm when they argued against the idea of voting for pro-crypto politicians simply because they’re less likely to try and take down the industry.

“Only a fool would vote on crypto alone,” they argued. “Voting for a candidate you would not otherwise support, simply because they favor the deregulation of a sector in which you hold a profit motive, is a compromise that you should not make.”

But plenty of people see it otherwise. While it may be true that most pro-crypto candidates are probably more interested in winning votes than carrying the crypto flag forward, it’s also true that crypto itself is an increasingly contentious issue in its own right. For many, crypto is not just a new kind of money, and it’s more than just an investment. It represents a philosophy and a way of life, with the pursuit of decentralization and the vision of “Web3” potentially being able to reduce the government’s ability to influence their life choices.

Siddarth said crypto advocates would ideally prefer it not to be politicized and called on politicians to embrace it by ignoring regulations and focusing on the positive impacts it will bring.

“A trustless, Web3 world will rely on a decentralized internet where the networks are unstoppable, economically strong and democratic,” he said. “The right discussions should be around building and adopting systems that can enhance transparency and trust in processes, including elections themselves, by reducing centralized control and enabling verifiable, tamper-proof systems.”

Will Trump Really Be Better for Crypto?

There is a growing chorus of opinion that a Trump return to the White House would be good for crypto, especially given the number of Republican senators, congressmen, and congresswomen who have come out in favor of digital money in the past. It remains to be seen how serious Trump really is about allowing crypto to thrive – if his current positive stance is in fact just an opportunistic one, it may well be that he simply ignores the issue once he regains the White House. But it’s highly unlikely Trump would perform a U-turn and try to make problems for crypto.

A win for Biden, on the other hand, would almost certainly mean a continuation of the administration’s attempts to crack down on the crypto industry and implement harsher regulations. In that case, crypto advocates would probably prefer it if they were just ignored.