How Crypto SuperPACs Will Change Crypto Policy

As the crypto industry continues to rapidly grow and expand in terms of asset prices, institutional adoption, and individual investor sentiment it would seem natural that as the industry matures it would look for a louder policy voice. Seemingly natural, but an approach that by necessity has to be approached with a balanced and objective perspective. The last time that crypto made a sizeable push to work with D.C. policymakers those efforts were spearheaded by Samuel Bankman-Fried; following the collapse of FTX and the conviction of Bankman-Fried policymakers have understandably been wary of further conversations. This wariness has persisted until recently, with several notable events occurring in 2024 that clearly indicates that not only is crypto here to stay, but that policy voices in the crypto sector will only continue to grow louder.

Be it former President Donald Trump’s recent embrace of crypto for campaign contributions, the (second) $25 million contribution to the SuperPAC Fairshake by Ripple, multiple Senate races being influenced by crypto for the first time, or the over $100 million raised in total so far by crypto PACs it is clear that the crypto industry is back in business. At the same time, however, there has been continued pushback against crypto by high profile senators such as Elizabeth Warren, the SEC continues to prove an obstacle toward greater crypto adoption, and the banking sector remains seemingly closed to crypto-native organizations.

Even though the regulatory and legal outlook for crypto remains murky, although with positive sentiments, let’s take a look at a few of the things that crypto investors should keep in mind as crypto funds continue to flow to policymakers.

Crypto Is A Campaign Issue

Something that should be obvious at this point is that with crypto funds and investors continuing to pour money into SuperPACs and other politically-related entities crypto and crypto issues will increasingly be considered campaign issues. Especially with the demographic among the most likely to own crypto – Millennials and Gen Z – are also among the voters least likely to be satisfied with and/or trust the government, the implications are clear. Politicians and lawmakers at every level will continue to be incentivized to take crypto issues seriously as the voting power of these blocs increases.

While not on par as other policy issues the fact that crypto is also factoring into swing voter calculations is indicative of just how important a conversation crypto has become. A Harris poll shows that nearly 80% of voters surveyed stating that every U.S. Presidential candidate should know about crypto, and a third of voters stated that crypto positions and policy ideas would be play a role in determining who receives their vote.

Crypto Is On The Hot Seat

Regulatory scrutiny and public debate are not new trends for the crypto space, but the scale and speed with which crypto has moved into the political and PAC sphere has the potential to make said debates and scrutiny even more intense. This renewed and higher level of scrutiny will have several implications for the sector that will need to be top of mind for investors, developers, and advocates alike.

First, new innovations and product launches will have to done in a more orderly manner than might have occurred previously for crypto-native organizations. Moving fast and breaking things might work for technology start-ups, but if investors and institutions are going to trust crypto organizations it is imperative that controls and processes are up to par. Second, and building on the first point, since crypto is becoming a campaign and policy issue there is a risk of it morphing into a partisan issue along with many other policy conversations in the U.S. Fortunately the recent votes and Congressional actions seem to indicate that – for now at least – crypto has emerged as a non-partisan issue. Lastly, large scale meltdowns, collapses, or organizations run with poor governance will have no future in crypto, not that they should have tolerated at all in the first place.

Crypto is continuing to mature, and with that maturation will come renewed – but beneficial scrutiny.

PAC Formation Will Accelerate Legislation

One of the most, if the not singular most, important aspect of assembling and funding a SuperPAC and making campaign contributions is to eventually have influence and effect over policy. Whether or not the ideals of bitcoin maximalists are maintained during this process are not as important as the reality that in order to achieve and hold on the gains that have been made, political contributions will be necessary. By that same token, however, the very same people and institutions that are funding SuperPACs and advocating for legislative progress need to safeguard against legislative over-reach as a result of this process.

Building on the previous two points, as funding and policy conversations continue to accelerate and permeate U.S. politics all interested parties will need to be aware to not repeat the mistakes of the past. Such errors include placing too much trust in a singular individual such as Bankman-Fried, letting personal skepticism get in the way, or letting personal beliefs to the positive overly influence policy debates.

However the 2024 election cycle plays out, crypto has come to Washington and has brought the cash to back up its positions.