The Key Differences Between Democrat And Republican Crypto Strategies

A tight presidential race is leading all major party candidates to reassess their positions on crypto in the hopes of winning a critical voter block.

At Bitcoin Nashville, both Donald Trump and Robert Francis Kennedy Jr. laid out pro-growth policies for digital assets, which included establishing the first strategic bitcoin reserve as well as a more accommodating U.S. regulatory environment.

The newly minted Harris campaign also made it clear they are seeking to “reset” relations with the crypto industry, while 28 democratic congressman and congressional candidates submitted a letter to the DNC requesting the party reverse course on crypto.

A number of politicians, including JD Vance and RFK Jr., have disclosed that they own BTC themselves.

Obviously, both major political parties now recognize the value of winning the crypto vote. After all, in 2020, 44,000 votes determined the outcome of Georgia, Arizona, and Wisconsin, which, had Trump won, would have tied him with Biden in the electoral college. Considering that approximately 50,000,000 Americans own crypto and many are ardent, single issue voters, the crypto vote could very well determine the election. There are a lot of votes and funding available to politicians that support the industry. Pro-crypto super PAC, “Fairshake,” is the best funded super PAC in the country with over $200 million raised.

Strategic Bitcoin Stockpile

Both Trump and Kennedy promised to build a strategic stockpile of bitcoin if elected, although there are differences between their approaches. Kennedy’s proposal is the bolder of the two, promising to establish a four million bitcoin strategic reserve to match the government’s stake in gold. However, Trump’s is perhaps more realistic and would effectively establish bitcoin as a national strategic reserve asset while retaining the bitcoin currently held.

This is a landmark move with major repercussions for the market. A strategic stockpile would legitimize this asset beyond anything that has happened so far. It would also create enormous new demand. A U.S. stockpile has the potential to set off a race between nation-states to stockpile their own BTC, creating reflexive behavior in which government purchases of BTC set-off additional purchases from other governments.

Regulation Reset?

Many in the industry feel the Biden Administration has unjustly targeted the industry, through a slew of lawsuits, hostile rules, and unclear guidelines that make operating in the US near impossible.

Crypto leaders, like Gemini’s Cameron Winklevoss and Coinbase’s Brian Armstrong, have called on Vice President Kamala Harris to take action by firing Securities and Exchange Commission Chair Gary Gensler, withdrawing active lawsuits, preventing the development of a CBDC, and ending “Operation Chokepoint 2.0” if Democrats want to reset relations with the industry. We have seen this start to some degree with the withdrawal of lawsuits from groups like Paxos and removing the classification of numerous cryptocurrencies as securities in litigation with Binance. While we see some softening by the SEC, Harris’ own position remains ambiguous. Meanwhile, Trump has already vowed to fire Gensler on “day one,” cut back on regulations, and prevent a central bank digital currency.

Pardons

Ross Ulbricht, the founder of drug market Silk Road, was sentenced to life in prison without the possibility of parole about 15 years ago. Industry advocates and libertarians argue that his non-violent crime does not warrant such a harsh sentence. Trump and RFK Jr. have both committed to pardoning him on day one. As of yet, Harris has not stated any position on the matter.

Digital Assets Owned By Politicians

I suspect more politicians will disclose crypto ownership to show they have skin in the game in supporting this industry. The ability to speak to the technology and craft intelligent legislation may make the difference in election results. Perhaps we will see politicians competing for who owns more.

After many years of digital asset technologists and investors being treated as a fringe community, the elections have helped to bring the industry into the mainstream. Though pro-crypto advocates do have mixed opinions on what changes matter, the group agrees on most issues. There’s much to gain and almost nothing to lose for candidates seeking votes and funding. Politicians can increase their commitment to supporting the digital assets industry in the US in many ways and will increasingly compete for this powerful voting block. In doing so, it will likely make the global environment for crypto more broadly adopted and bring digital assets squarely into the mainstream.

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