Coinbase CEO Brian Armstrong
At the recent Piper Sandler Global Exchange and FinTech Conference in New York, Coinbase CEO Brian Armstrong expressed confidence that the next U.S. administration will be "constructive" on crypto regardless of the election results. This statement underscores the growing political influence of the crypto industry as the November election approaches.
Political Influence and Market Support
The highly volatile crypto sector has often been viewed as a risky fringe industry and has faced intense scrutiny from the U.S. Securities and Exchange Commission (SEC), which has accused it of flouting securities laws. However, support from Wall Street institutions and corporate leaders like Elon Musk, along with the approval of U.S. exchange-traded crypto funds, has boosted its mainstream appeal.
Both the Republican and Democratic parties have recently acknowledged the industry's growing clout. "Crypto advocates are making their voices heard as an important voting bloc. Politicians on both sides of the aisle have taken notice, and there is growing momentum to pass comprehensive crypto legislation," Armstrong told analysts.
Regulatory Challenges and Court Battles
The largest U.S. crypto exchange, Coinbase, is currently fighting the SEC in court after the regulator sued the company last year, alleging it failed to register as an exchange. Meanwhile, three major pro-crypto super political action committees (PACs) – Fairshake, Defend American Jobs, and Protect Progress – have collectively raised more than $230 million to support crypto-friendly candidates.
This campaign has influenced both parties. Republican presidential candidate Donald Trump recently pledged to create a "stockpile" of bitcoin. Democratic vice president Kamala Harris's advisers have also reached out to top crypto companies to "reset" relations, according to the Financial Times.
Market Reactions and Future Prospects
"Donald Trump is pro-crypto, which theoretically creates a tailwind for the industry if he wins," said Dan Coatsworth, an investment analyst at AJ Bell. "We don't yet know Kamala Harris's position, but there are reports she could take a softer stance than Joe Biden."
Such a shift would be a significant win for the sector, which has long warned that the SEC's crackdown could push crypto entrepreneurs overseas. Mike Colonnese, an analyst at brokerage H.C. Wainwright & Co., suggested that a regulatory change "has the potential to bring a new wave of institutional capital into the space that would've otherwise been sidelined."
Coinbase CEO Armstrong also praised a recent Supreme Court decision that overturned a doctrine called "Chevron deference," which had required judges to defer to federal agency interpretations of ambiguous laws. This ruling is seen as a blow to federal agency powers and a positive sign for the crypto industry. Armstrong noted, "We see this case as a sign of Supreme Court skepticism to agency overreach, which we view as a positive overall for our industry."
In a strategic move, Coinbase recently added former U.S. Solicitor General Paul Clement to its board. Clement was a lead lawyer in the case that led to the Chevron ruling. Analysts at Citigroup noted last month, "Shifts in the U.S. election landscape and the Supreme Court’s overturning of the long-standing Chevron precedent has changed our view on Coinbase's regulatory risks."
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