In last month's election, a remarkable phenomenon emerged. One of the most significant victors was not a candidate on the ballot but rather something found within a crypto wallet. During the 2024 campaign cycle, cryptocurrency companies made a substantial impact by contributing one-third of all direct corporate contributions to super PACs. This investment paid off handsomely as 85% of the congressional candidates supported by the industry emerged victorious in their races.

Uncovering the Crypto Influence in Elections

Understanding the Crypto Phenomenon

Cryptocurrencies are digital assets that operate independently of a country or financial institution. They rely on a blockchain, a secure and decentralized virtual ledger that meticulously records every transaction. Industry research indicates that those who own cryptocurrency are typically young and racially diverse. They view cryptocurrency as a means to gain more control and freedom over their financial lives. Overall, they advocate for clearer regulations and seek candidates who are open to emerging technologies.

For instance, Brad Garlinghouse, the CEO of Ripple, whose cryptocurrency XRP is one of the largest in the world, emphasizes the significance of this industry. He believes that those who underestimate the passion of crypto enthusiasts are missing a crucial aspect. Cryptocurrencies offer a unique financial alternative that attracts a specific demographic.

The voter base for cryptocurrencies is on the rise and presents an opportunity. While they support policies favorable to the industry, crypto voters do not have a unified stance on which party will best serve their interests. Most research shows a near-even split between support for the Republican and Democratic parties.

The Role of Advocacy Organizations

To assist voters in making informed decisions, the advocacy organization Stand With Crypto assigns grades to politicians based on their statements about the industry. President-elect Donald Trump received an A grade. Initially critical of bitcoin in 2021, Trump has since embraced the industry. He even announced his new cryptocurrency business, World Liberty Financial, and appointed David Sacks as his "White House A.I. & Crypto Czar," highlighting his intention to boost the crypto sector.

On the other hand, John Reed Stark, a former chief of internet enforcement at the Securities and Exchange Commission, is critical of crypto. He understands the reasons behind people's interest but maintains that cryptocurrency is dangerous. He believes that the financial crisis led to a lack of trust in institutions, which contributed to the appeal of cryptocurrency.

However, the industry was not straightforward in making crypto connections in its ads. For example, Democrat Rep. Katie Porter in California was criticized for cryptocurrency mining in a letter she co-signed with a known crypto skeptic. But during her Senate primary, every negative ad against her was funded by crypto, highlighting the complex nature of the crypto influence in elections.

The Crypto Industry's Campaign Spending

In this year's election, the crypto industry supported 29 Republicans and 33 Democrats. The largest crypto industry super PAC, Fairshake, started in part by Ripple, spent $131 million on ads supporting pro-crypto candidates. It also has an additional $103 million reserved for pro-crypto candidates in the mid-term elections two years from now. Interestingly, none of the television ads paid for by Fairshake this year mentioned crypto, even those against Porter.

Ripple CEO Garlinghouse argues that even without direct mention of crypto, the commercials were still educating voters. But Stark is not convinced, stating that elected officials were clear in their support of crypto, and it remains to be seen if voters truly understood the implications.

The video above was produced by Brit McCandless Farmer and edited by Scott Rosann.