Bitcoin, Crypto, and the 2024 US Presidential Election

Last Update 08/07/2023

Americans View Money as Increasingly Important; Other Values Decline

Source: WSJ and NORC Poll of 1,019 adults conducted March 1–13, 2023; margin of error +/–4.1 pct. pts. Prior data from WSJ/NBC News telephone polls in 2019¹ and 1998²

For better or worse, American values have changed over time, particularly with younger demographics. It appears that a confluence of factors – including the 2008 recession, the rise of social media and the internet, and a highly charged, increasingly partisan political atmosphere, among other things – has caused young Americans to have a growing sense of distrust towards institutions. This timing corresponds with an unprecedented level of income inequality and, perhaps as a result, increased levels of financial awareness and education³ for young Americans. These trends—distrust of institutions, income inequality, and financial awareness—directly coincide with the rise of Bitcoin, in both price and mainstream adoption.

Bitcoin Price over Time

Source: CoinMetrics. Past performance is not indicative of future results

Our team has been wondering how these trends might be relevant in the upcoming 2024 American Presidential election, and this piece was designed to capture our early thoughts. First, Bitcoin is currently at its highest price in an American Presidential election cycle; Bitcoin is currently trading above $29K, whereas the previous election cycle high in Q4 2020 was ~$20K. Next, and arguably as important, the demographic that has grown to be particularly distrusting of institutions, while simultaneously concerned with their financial future, could perhaps be the most critical demographic of voters ahead of 2024. In the 2024 Presidential election, young people are projected to become the largest proportion of voters in history, with early reports noting that Millennials and Gen-Zers will comprise 44% of American voters by 2024.

Cathie Wood and Balaji Srinivasan have called 2024 the “Bitcoin election”. Recently, in July 2023, Larry Fink claimed that “Bitcoin will transcend every international currency due to broad-based worldwide demand.” If this occurs, Bitcoin would not just be positioned as a sidenote for government officials and policy-makers, but instead as a matter of national security for America. The facts and continued maturation of the Bitcoin ecosystem seem to suggest that Bitcoin is and will continue to be more relevant to an American election than ever before. In fact, early political candidates are already starting to share positions on Bitcoin and crypto, more broadly. We’ve captured their positions in the table below.

A presidential candidate’s views on Bitcoin and crypto are important not only because the president leads the country, but also because the President is responsible for appointing the heads of more than 50 independent federal commissions that can have influence over various aspects of crypto, including the SEC, CFTC, Federal Reserve and Treasury.

2024 American Presidential Political Candidates’ Positions and/or Views on Bitcoin and Crypto-Related Topics. Candidates Polling above 5% as of July 2023

Although this is a small snapshot early in the election cycle, the above table illustrates that there are diverse viewpoints on crypto-related topics within and across political parties. For example, while former President Trump has stated his belief that “Bitcoin is a scam,” many Republican candidates strongly disagree with that sentiment. For example, Desantis, has vowed to protect Bitcoin from regulation. Ramaswamy has publicly stated that he is pro-Bitcoin because he views it as a “decentralized alternative” to the U.S. dollar, which he believes could augment the U.S.’s financial infrastructure by holding the “existing system’s feet to the fire.” Republican Francis Suarez, nicknamed the “Bitcoin Mayor”, entered the race in June 2023 after gaining notoriety for vowing to make Miami a Bitcoin hub and accepting his salary in Bitcoin. On the Democratic side, RFK Jr. similarly believes Bitcoin is a “major innovation engine,” and he is now the first major presidential candidate in history to accept Bitcoin campaign donations; he also recently claimed he would eliminate capital gains tax on Bitcoin trading²¹.

Similarly, candidates’ positions on Bitcoin Mining and CBDCs have not been party-specific, but have been nuanced on both sides. For example, the Biden administration proposed a 30% tax on the cost of electricity used for Bitcoin mining while fellow Democrat RFK Jr. is staunchly against²² any Bitcoin mining tax. On the Republican side, a core tenet of Ramaswamy’s proposal is freedom to mine Bitcoin in America. Likewise, Desantis is also opposed to the proposed 30% tax. Furthermore, incumbents like Biden and Trump are favorable towards exploring CBDCs, while Democrat RFK Jr. and Republicans Desantis, Ramaswamy, and Suarez are strongly opposed to this measure.

The increasing pro-crypto stances of Presidential candidates across political parties may reflect the idea that Bitcoin and crypto have become nonpartisan issues that members from both sides can agree upon.

Conclusion

Bitcoin is decentralized. There is no Federal Reserve to change money supply. There is no CEO making decisions that can dramatically change potential outcomes. There is no gatekeeping; there are no secrets. The Bitcoin ecosystem is publicly transparent, and anyone with access to the internet can view, participate, or invest in the Bitcoin protocol. Bitcoin’s technology and overall ethos often aligns with the values of a young population that is increasingly individualistic, skeptical, and concerned about money. Bitcoin can serve American values regardless of political affiliation.

With Bitcoin’s increasing prominence over time and the significance of the young voter demographic, it will be interesting to watch how presidential candidates’ stances on crypto evolve and to see how and if they play a role in the 2024 American Presidential election. Ultimately, this is something we are keeping an eye on at Grayscale, as legislation, policy and regulation will have far-reaching implications for crypto as an asset class today, as well as America’s role in the global economy and the future of finance.

^{1. WSJ/NORC poll}

^{2. NBC News/WSJ 1998 Poll}

^{3. TIAA Institute}

^{4. Big Village as of 7/26/24}

^{5. Blockworks}

^{6. Forbes}

^{7. Whitehouse.gov}

^{8. Cointelegraph}

^{9. Decrypt}

^{10. Cointelegraph}

^{11. Blockworks}

^{12. BBC}

^{13. Forbes}

^{14. Cointelegraph}

^{15. Fl.gov}

^{16. The Street}

^{17. Coindesk}

^{18. CBS News}

^{19. Pymnts}

^{20. Coindesk}

^{21. Decrypt}

Article Disclosures

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There is no guarantee that the market conditions during the past period will be present in the future. Rather, it is most likely that the future market conditions will differ significantly from those of this past period, which could have a materially adverse impact on future returns. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. We selected the timeframe for our analysis because we believe it broadly constitutes the most complete historical dataset for the digital assets that we have chosen to analyze.