Crypto investors are eagerly waiting for the approval of a spot Bitcoin exchange-traded fund (ETF). However, a recent splash on crypto lobbying is creating hope for the longer-lasting survival of the asset.
Crypto exchange Coinbase, stablecoin issuer Circle, and Silicon Valley venture capital firm a16z are giving almost $80 million to influence US crypto policy ahead of the 2024 elections. The three have funneled the money to a crypto super political action committee, Fairshake, to combat souring attitudes toward digital assets on Capitol Hill.
Crypto in Need of New Political Allies
Joining the crypto companies are crypto investors Ron Conway and Fred Wilson and Gemini co-founders Cameron and Tyler Winklevoss. Fairshake accepts unlimited donations for supporting the election of “pro-crypto leadership.”
The notable influx of funds comes after Binance’s alleged involvement in terrorist funding and the conviction of former FTX CEO Sam Bankman-Fried have placed crypto in a politically precarious position.
Senator Elizabeth Warren said in an interview earlier this year:
“Digital assets are creating a national security risk.”
One of crypto’s most notable allies, Senator Patrick McHenry, has affirmed his intention not to re-run during the 2024 elections. McHenry has been instrumental in advancing stablecoin legislation that was blocked by Democrats on the House Financial Services Committee. Hence, there is a need for new funding to win new political support.
“I view the increased lobbying effort as more of an attempt to impact this election and make sure that pro-crypto candidates, from both sides of the aisles, are elected rather than a response to recent enforcement actions and court cases,” said Orlando Cosme, a lawyer at OC Advisory.”
Read more: How To Prepare for a Bitcoin ETF: A Step-by-Step Approach
How Crypto Lobby Efforts Will Aid ETF
New political ties are developing in parallel with market excitement around Bitcoin ETF approvals. The US Securities and Exchange Commission is expected to rule on several applications starting January 10, 2024. If allowed, they could open the floodgates for institutional investments in Bitcoin.
Bitcoin Trades in Thin Markets Ahead of ETF | Source: Bloomberg
On the other hand, the increased lobbying could improve the legal standing of retail trading. Clarity around licensing crypto exchange activities like order matching, brokerage, and clearing services could remove alleged conflicts of interest and foster a robust trading environment like the one European exchanges expect next year. Laws that clarify which assets are securities could result in disclosures that retail traders can feel comfortable with.
Read more: 13 Best Crypto Exchanges for Beginners
A rise in tokenization will stimulate demand for on-chain settlements using digital assets. The entrance of big players like JPMorgan, Morgan Stanley, and others could pressure Congress to advance smaller crypto-related bills that could make the traditional financial system faster.
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