Rise of the "crypto voter": The surprising group that could swing the election

Kamala Harris seeks to make inroads with crypto industry after Trump goes all in

Published September 28, 2024 5:30AM (EDT)

Kamala Harris, Donald Trump and cryptocurrency (Photo illustration by Salon/Getty Images)
Kamala Harris, Donald Trump and cryptocurrency (Photo illustration by Salon/Getty Images)

The crypto world hit a major milestone earlier this year with the approval of Bitcoin and Ethereum ETFs, a clear sign that digital assets are gaining traction on Wall Street and Main Street alike. As traditional financial institutions come around, more Americans are eyeing cryptocurrencies as a serious investment option, signaling a shift in the financial landscape that could impact the presidential race.

“It has been clear throughout this election cycle in the United States that cryptocurrency is a bigger priority for both parties than it has been in the past, which is exciting to see from an industry growth perspective,” says Hany Rashwan, co-founder and CEO of 21Shares, one of the biggest issuers of the cryptocurrency exchange-traded products globally.

Vice President and Democratic nominee Kamala Harris made her first public comments on crypto earlier this month, telling donors in New York that her administration would "invest in America's future" by supporting digital assets and other technologies while ensuring consumer protections, according to Bloomberg. Harris’ remarks signal that Democrats, like Republicans, are beginning to embrace the crypto industry.

While both presidential campaigns are stepping up their efforts to win over crypto voters, there is still a long road ahead to craft comprehensive Web3 policy that would make the U.S. competitive in the world, according to industry analysts who are closely watching the race.

“We have seen Harris and Trump both trying to use crypto and befriend crypto. It looks like they want to tap into the community,” says Art Malkov, a New York-based advisor at Columbia University’s Lab to Market Blockchain accelerator and co-founder of the Web3Lab accelerator. Malkov noted that the crypto market has reached a critical mass of adoption and development that it can no longer be ignored by mainstream politicians.

“We got the election speeding up the process where now Harris cannot afford not embrace crypto because Trump is embracing it,” he says. 

This may prove to be a landmark year in the history of crypto development and mainstream adoption. In a House Financial Services Committee hearing on Sept. 24, Rep. Maxine Waters, the top Democrat on the committee, said she wants to "strike a grand bargain on stablecoins" before the end of the year, as reported by The Block. This follows two years of bipartisan negotiations on a bill to create a regulatory framework for stablecoins — which are typically pegged to another currency or reserve — and could signal  potential progress in crypto regulation as the year comes to a close.

Morningstar’s Bryan Armour says it has already been a “pivotal year” for crypto adoption by US investors. He notes IShares Bitcoin Trust became the fastest exchange-traded fund (ETF) to reach $10 billion in assets under management, and spot bitcoin ETFs already reached a total of $50 billion in net assets as of Sept. 10. 

“It's remarkable to think of an industry that is about 15 years old and now it's a part of one of our leading parties’ platforms,” says Patrick Kirby, policy counsel at Crypto Council for Innovation, noting that crypto has become a legitimate campaign issue for the first time in American presidential history. “It's important to remind ourselves, as an industry and for folks interested in this space, just how far we've come.” 

“Crypto swing states could emerge given the close nature of many of the races."

Together with traditional institutions that have warmed up to crypto this year, about 40% of American adults now own crypto, a jump from 30% in 2023, according to recent data compiled by Security.org. Bitcoin ETF approval has certainly been a big boost in confidence, with 21% of non-owners saying they’re more likely to invest in cryptocurrency now given the exchange-traded fund wrapper. 

In a major milestone for the crypto world, the Securities and Exchange Commission approved the launch of several Bitcoin ETFs in January, allowing shares in trusts holding Bitcoin to be traded on SEC-regulated exchanges.

Then in May, the SEC unexpectedly approved proposals for the first spot Ethereum ETFs. Spot Ethereum ETFs will directly hold Ether, the second-largest cryptocurrency after Bitcoin, allowing investors to own a share of the cryptocurrency through grantor trusts.

In addition to milestone crypto products getting approvals, lawmakers came together in May to pass the Financial Innovation and Technology for the 21st Century Act, which proposes a regulatory framework for digital assets in the United States. 

It’s an important milestone as the bill aims to provide clarity for the digital asset industry while mandating cooperation between regulatory agencies to avoid duplicate regulations. It assigns oversight responsibilities to the Commodity Futures Trading Commission (CFTC) for assets on decentralized blockchains and to the SEC for those on non-decentralized blockchains, with specific criteria for each category. 

Still, there is plenty of uncertainty about the next steps and the future of this bill. It’s not just the top of the ticket and federal regulation that will matter in the November election, the makeup of Congress and relevant committees will play a crucial role in shaping America’s crypto policy in months to come.

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Increasingly, lawmakers are looking to address this growing interest and demand for crypto products at the state level as well. 

State legislatures have been actively engaging with digital asset regulation, as evidenced by the introduction of more than 165 bills this year in current legislative sessions, according to data compiled by Crypto Council for Innovation. These proposed laws cover a wide range of topics within the cryptocurrency and blockchain space, addressing issues such as stablecoin standards and cryptocurrency mining. 

Notably, about 70% of these bills have either successfully passed or remain under active consideration, indicating a strong momentum in state-level efforts to establish regulatory frameworks for digital assets.

State governments are actively shaping crypto policy through new laws and regulations, according to a report by Crypto Council for Innovation. 

“Crypto swing states could emerge given the close nature of many of the races,” Liz Mills of Crypto Council for Innovation wrote in a report. “Crypto voters want politicians to set clear rules for cryptocurrency, providing investors with choices and allowing the sector to continue to grow and create jobs.”

Trump going all-in on crypto

Republicans have been especially proactive in recognizing digital currencies markets as an important issue, as recent polling shows crypto becoming a significant issue for many voters. Among Republicans not initially planning to vote for former President Donald Trump, 13% said his support for crypto increased their likelihood of voting for him. Additionally, 38% of non-white Republican supporters reported feeling more excited to vote for Trump due to his pro-crypto stance.

Trump is aggressively courting crypto-friendly voters ahead of the 2024 election, releasing a new batch of NFT trading cards in August and promoting a cryptocurrency project run by his sons. 

This marks a significant reversal from his previous skepticism of cryptocurrencies, with Trump now dubbing himself the "crypto president." 

There are some questions about whether the new venture is more grift than digital innovation.

In a speech at a bitcoin conference in July, Trump pledged that, if elected, his administration would retain all bitcoin held by the U.S. government, as reported by Axios. This sentiment aligns with the "hodl" mentality popular among cryptocurrency enthusiasts. 

“For too long, our government has violated the cardinal rule that every bitcoiner knows by heart, never sell your bitcoin,” Trump said at the event.

Trump also promised to fire SEC Chair Gary Gensler on his first day in office, a statement that received enthusiastic applause from the audience.

In the absence of a comprehensive crypto policy plan, Trump’s agenda is a compilation of promises and crypto ventures that seem poised to benefit the Trump family. His latest DeFi project, World Liberty Financial, aims to promote U.S. dollar dominance through widespread adoption of dollar-pegged stablecoins in decentralized finance, according to CoinTelegraph

The venture has hinted at a partnership with Aave, which is a decentralized finance (DeFi) protocol that operates on the Ethereum blockchain. Trump’s latest project positions itself as a way to maintain America's financial leadership globally, though details remain scarce and the project has already been targeted by scammers and hackers.

Notably, there are some questions about whether the new venture is more grift than digital innovation. A white paper obtained by CoinDesk earlier this month showed World Liberty Financial's ownership structure relies on a "governance" token, with 70% allocated to insiders like Trump and his sons—a proportion described as "significantly higher-than-normal" for such ventures.

Still, crypto enthusiasts and advocates – from crypto billionaires, CEOs and the Winklevoss twins – are backing Trump and see his presidency as favorable to the industry’s continued development. Kraken co-founder and CEO Jesse Powell is one of the corporate leaders who has publicly supported Trump's crypto venture by donating $1 million in Ethereum to the former president, describing him as the "only pro-crypto major party candidate" in a post on X.


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Harris campaign catching up

According to Fortune's reporting, Coinbase CFO Alesia Haas confirmed that Future Forward, Kamala Harris's official super PAC, has onboarded with Coinbase Commerce to accept cryptocurrency donations. 

This move by Kamala Harris's super PAC to accept cryptocurrency donations via Coinbase Commerce marks a significant departure from the Biden administration's generally cautious stance on crypto, potentially signaling a shift in Democratic policy.

“She has not rolled out the details yet, but she has made overtures that she would like to drive crypto legislation,” Haas said, noting she was “cautiously optimistic.”  

While the Harris campaign published more of its policy priorities ahead of the presidential debate on Sept. 10, few details were disclosed when it comes to crypto policy. The Harris campaign declined to elaborate further.

Harris on Wednesday vowed to invest in the industry so that the United States would "remain dominant" in the blockchain space.

There are still plenty of market risks associated with cryptocurrencies, outside of regulatory clarity and framework. 

As the latest milestones have been encouraging to crypto advocates, the U.S. still has a lot of catching up to do compared to other advanced economies when it comes to formulating its digital asset policy.

“The US has a less mature regulatory framework in place for cryptocurrency than other countries, particularly those in Europe where there is greater clarity around crypto regulations and buy-in from politicians,” says Hany Rashwan, CEO of 21Shares, which has been operating in Europe for the last seven years.

Cryptocurrencies’ recent poor performance, volatility and a flat debut for spot ethereum ETFs are also stalling adoption, according to Morningstar’s Bryan Armour.

“Unfortunately, we're seeing the US lag behind: We saw the European Union, Singapore, Hong Kong, the U.K. put different regulatory frameworks in place,” says Kirby of Crypto Council for Innovation. “We're seeing momentum on the US side, but no comprehensive market structure bill has become law yet and there's still an opportunity to catch up."


By Daria Solovieva

Daria Solovieva is a veteran business journalist with 15 years of experience writing for leading financial newsrooms globally, including the Wall Street Journal, Bloomberg and Fortune magazine. Her work spans a wide range of topics, including personal finance, economic empowerment, structural inequalities, financial literacy, and the intersection of money and mindfulness. Her upcoming book explores the feminist history of finance.

MORE FROM Daria Solovieva


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Crypto Donald Trump Election Kamala Harris Money