The growing power of crypto owners heading into the 2024 election: Galaxy Digital

Voters holding bitcoin and other cryptocurrencies could have a decisive influence on the upcoming US presidential election, according to the latest market poll released this week by cryptocurrency financial services firm Galaxy Digital.

The report points to the recent election showing a growing ownership of crypto among young voters and communities of color, and argues that these “crypto voters” can determine the outcome of the close race between President Biden and former President Donald Trump.

“As we inch closer to November and investors begin to narrow down the implications of the vote on the market, the crypto industry could play a bigger role than ever before,” Galaxy Digital reported. 19% of registered voters got their own cryptocurrency, including more than 11 million worth more than $1,000.

The Paradigm poll also found that crypto holders currently support Trump by 48 percent to 39 percent over Biden.

Independent of crypto ownership, the Paradigm poll mirrors other national polls, with 45% of registered voters backing Trump and 42% backing Biden. But Paradigm's research suggests that some 2020 Biden voters who own crypto are turning to Trump, “probably because of actions taken by some agencies in the Biden administration.”

While not specifying what those actions might be, the crypto industry has widely called for the Securities and Exchange Commission (SEC) under Chairman Gary Gensler to regulate digital assets through enforcement actions rather than overt laws.

Senior Biden advisers have also called for stricter encryption regulations. In contrast, congressional Republicans have tried to pass legislation that would limit federal regulation of crypto. Meanwhile, Trump has vowed to block the creation of a central bank digital currency (CBCC) if re-elected, making digital assets a key campaign issue.

Paradigm: “One thing is clear [crypto owner] Groups are concerned about how policymakers approach crypto,” the Galaxy report echoed.

“The deep-rooted nature of crypto ownership among Americans is further evidenced by the fact that 32 percent of the voting population owns any kind of stock,” the latest report notes.

Crypto-focused political action committees (PACs) are already spending heavily to influence key 2024 races. A leading PAC, Fairshake, has raised over $85 million from major crypto players such as Coinbase and Andreessen Horowitz. He spent more than $10 million to defeat a crypto-skeptic Democrat in the California Senate primary.

Fairshack now plans to target four key Senate races that could decide control of the chamber—in Ohio, Montana, Michigan and Maryland. In Ohio and Montana, Fairshack focuses on the general election, where the current Democratic senators have questioned the importance of crypto.

The PAC has not yet announced which candidate will return to those states.

However, Matthew Siegel, head of digital asset research at VanEck, argues that the Biden administration is hindering broader crypto adoption and that a Trump victory could boost the industry.

“The Biden administration does not want banks and brokers to touch digital assets,” Sigel told Decrypt last month. “If the president changes, we will see a lot more support for this industry.”

The increasing influence of crypto holders as voting power coincides with the increasing popularity of Bitcoin and other digital assets. The biggest cryptocurrency hit a record high of more than $73,000 last month, thanks to the launch of the first US bitcoin exchange-traded funds (ETFs).

According to the Galaxy report, “new demand pressure from the new BTC ETF, digital gold” broke $70,000 for the first time in its history. “Bitcoin's mainstream adoption has received additional support this month on a number of issues,” including growing interest from major financial advisors and pension funds.

But the report worries that next week's “halving” of Bitcoin mining rewards – which has served as a catalyst for big gains in the past – may not have the same effect as this cycle saw Bitcoin rise to new highs ahead of the event.

Still with the “dark cloud” of the criminal case against FTX founder Sam Bankman-Fried in the rearview mirror, Galaxy argues that the crypto industry is poised for growth as the 2024 election approaches.

“We hope that removing bad actors will provide an unfettered path to brighter days in the realm of digital assets,” the report concludes.

Edited by Ryan Ozawa.