Crypto Enters the Mid-Term Race

There’s a new kid in the block in politics, and that’s the $1 trillion crypto industry that for the first time is flexing its muscles to enter the fray in the closest mid-term election in living memory.

An estimated $32 million has been spent by a ballooning raft of new crypto PACs, including the Financial Freedom Pac, also known as the bitcoin PAC.

They have spent $125,000 on four candidates, two Democrats and two Republicans, showing the desire of the crypto industry to not quite pick winners and losers and to maintain bipartisan support.

FTX, the newest crypto exchange that has also spent the most in politics, has launched a PAC called the American Dream Federal Action PAC, which has spent $12.7 million, exclusively for Republicans according to OpenSecrets.

The FTX founder however spent a lot more for Democrats, $23 million, through the Protect Our Future PAC.

Then there’s the Crypto Innovation PAC, which has spent close to $3 million in support of House Financial Services member Patrick T. McHenry and Ted Budd, committee member running for Senate in North Carolina, as well as Sen. John Boozman, R-Ark., the ranking member of the Senate Agriculture Committee.

While the Crypto Freedom PAC has focused exclusively on Blake Masters, the crypto enthusiast Republican running in Arizona, spending close to $3 million mostly against competing candidates, and just $200,000 for Masters.

Polls have Democrat Mark Kelly in the lead at 48% to Masters’ 42%, with Kelly expressing “concerns” last year about crypto and stablecoins.

Making the entrance of crypto into national politics full of eggshells because the crypto candidate of course might not win, and no one would like any retribution from that.

Masters for example claimed at the beginning of the war in Ukraine that it was a “European problem.” A Europe which sent many troops in support of the United States in Afghanistan, and a lot of that Europe also sent troops to Iraq.

Nonetheless he did also say “we should supply the Ukrainians as they fight for their country.”

Democrats, knowing that some 70%-80% of the American public support aiding Ukraine, are trying to paint Republicans as the party that would let democracy fall to the wolves.

Tucker Carlson, the Fox News anchor that often repeats Russian propaganda even as that same Russia calls the United States an enemy, has contributed significantly to the opening for Democrats to paint Republicans as anti-freedom.

Yet, it’s not that simple of course. It is questionable the Republicans would side with a country that had bounties on US soldiers, but the Republicans are struggling to keep a lid on some of the more… well, thuggish elements within the party.

There’s a split, with Former Vice President Mike Pence warning of “Putin apologists.”

“There can be no room in the conservative movement for apologists to Putin. There is only room in this movement for champions of freedom,” he said.

Nonetheless the Republican party does risk being perceived with a broad brush on this matter, with the coup attempting former president Donald Trump – who dissed bitcoin – blamed by some Republicans for the polls being so close when mid-terms tend to go to the non governing party.

Then there’s the economy. On foreign affairs president Joe Biden has done well, and you only need to look at the chaos in Russia, the economic troubles in China, and the cultural changes in Iran after 50 years of theocracy, to know just how well.

Obviously, there’s always room for better, but Biden has managed to… at least allow those that want to, to feel a bit proud of America.

On the economy however, there’s a difficult situation in regards to the more medium and longer term plans on how do we get good growth.

Painful as it has been in regards to the stock market, the 5% tax on income above $10 million is just equitable because billionaires shouldn’t be paying the same rate as 9-5 professional workers.

And unlike Europe, Biden has unveiled huge investments in what we call tech industrialization. That’s solar panels, electric cars… now maybe batteries as advances there can leap, but all tech that has industrial use.

Where gas and oil is concerned, Biden has tried but it appears there’s a bit of more fundamental diplomacy seemingly required in the oil region with even Israel turning out to be not quite a full on ally in regards to a country that calls the United States an enemy.

Nonetheless, there is currently a significant on-going debate, even if it is in the corners, regarding just how we can tackle the current challenges while promoting good growth.

That may need both tax reforms to smoothen the hard bands where someone on $20,000 pays the same as someone on $50,000, and the latter pay the same as those earning $500,000 – speaking in very broad brushes. There’s huge gaps at all those levels.

While at the same time as equitabilizing taxes, we may need to spend more on implementing the new technologies of today, and in investing for the new technologies of tomorrow.

Hard stuff within the constrains of markets, and yet now that where our own soldiers are concerned we’re at peace, it is the main focus and in that context, whether it is a Republican or a Democrat might be less relevant than whether you do have that focus and know how to actually execute on it.

All that to say that while crypto is relevant to crypto holders in regards to the vote in a week and a half, for many voters it is less relevant than global liberty and the structural economy.

Not least because both of those affect crypto far more, and far more directly, than anyone candidate especially in a generally liberal and innovation friendly country like USA, at least where the elected are concerned if not in the very captured federal agencies like SEC.

Making it encouraging that so far the crypto industry has donated to both sides, because we do have crypto holders on both sides of the spectrum, and even on the entire spectrum.

Which is why we have not quite heard of any agitation by the elected from either side for quite some time, but the spending by the crypto industry is still quite minuscule compared to other industries.

Just Ken Griffin, the CEO of Citadel, for example has spent $100 million and he seems to have picked a side in donating only to Republicans.

Not a great strategy in a very close election, but goes to show that the entire crypto industry has easily been overshadowed by just one person.

That’s in part because the crypto industry is still small compared to wider finance, it is far more global as finance often revolves around national fiat, and the crypto industry is a lot more busy with building and innovating, than politics.

Except, politics hasn’t given much of a choice, and therefore the crypto industry is making an entrance in taking a bipartisan approach towards Washington.