Ancient Greek philosopher Aristotle had once said, “Man, by nature, is a political animal.”
He implied that society and civilization preceded the man and it is natural for him to engage in social activities i.e. politics. The true potential of a man is reached only when he communicates with society.
Aristotle’s words, which were spoken around 350 BC, still echoes loud in the political corridors of the United States, as on Thursday, the U.S. Securities and Exchange Commission (SEC) approved spot Ethereum Exchange Traded Funds (ETH ETFs), thereby marking a new chapter in the crypto history. It was the political lobby of the U.S with bipartisan support of both Republican and Democratic Parties, which made it possible for the SEC to finally budge on their conservative stance.
With this step, Ethereum has become the second cryptocurrency after Bitcoin to have spot ETFs in the U.S. and it has been seen as a landmark investment opportunity in the crypto market.
The decision comes after a lot of deliberations and speculation about whether the SEC will give approval for ETH ETFs or not. As the US is bound to go for presidential elections later this year, crypto pundits credit the SEC approval to relentless political lobbying and bipartisan love for the crypto community by political parties.
A 180 degree turn in Speculations
Hardly a week ago, analysts at Bloomberg had given a meagre 25% chance to the possibility of approval, blaming the unyielding and strict attitude of the SEC.
However, in a matter of just a few days, the analysts raised their positive speculation percentage for SEC approval to 75%. The fresh speculations reported widely in the media, resulted in an 18% surge in Ethereum’s trading value at $3,800 and Bitcoin’s value has also recorded a new high at $71,000. As per the analysts at Bloomberg, the 180 degree turn in their analysis was largely based on the political happenings in the U.S. ahead of presidential elections in 2024.
Bipartisan Love for Crypto is key to SEC approval
For both Democrats and Republicans, crypto is an issue where they can see each other eye to eye and make bed together. In the past one week, two pro crypto bills-Financial Innovation and Technology for the 21st century (FIT21) Act and Deploying American Blockchains Act of 2023-were passed in the house with bipartisan support. The FIT21 Act was passed with bipartisan support of 279-136 votes despite SEC warning that the act would potentially create “new regulatory loopholes”. The Democratic Party did not issue any whip to its members on both the bills allowing representatives to vote in favour in the house.
Another example of crypto’s bipartisan love is the “Responsible Financial Innovation Act”, a bill co-presented by Republican Senator from Wyoming Cynthia Lummis and Democrat Senator from New York Kirsten Gillibrand. The bill intends to set jurisdiction limitations for SEC and Commodity Futures Trading Commission (CFTC) when it comes to regulating the crypto sector.
It’s SEC versus Republicans and Democrats on Crypto
The past month saw a tussle between SEC and the political lobby of the U.S. where the latter was seen clashing with the rather conservative federal agency to “loosen up” their regulations on the crypto sector. Recently, the U.S. Senate had voted in favour to repeal Staff Accounting Bulletin 121 (SAB 121), a controversial clause introduced in the FIT21 Act by the SEC, which regulated banks’ cryptocurrency activities. Both Republicans and Democrats have criticized the SEC chaired by Gary Gensler.
However, the SEC still has support of President Joe Biden whose office promised to “veto” the proposal of the senate to overturn SAB 121. It now remains to be seen whether Biden’s office would really veto the proposal or not given rising popularity of the crypto market in the U.S.
Presidential Elections and Crypto
Donald Trump, former US president and chief presidential candidate for the Republican Party, has openly endorsed crypto while campaigning for the polls. Earlier, Trump had ridiculed crypto as a “scam” but today, he is seeking support from the community, asking crypto enthusiasts to “better vote for him.”
Just a day after news broke out regarding SEC positive speculation, the Trump presidential campaign launched a fundraising page to accept donations in crypto.
Trump has also been vocal about embracing cryptocurrencies more broadly if re-elected, signaling a more crypto-friendly administration. He has mentioned accepting campaign donations in cryptocurrencies. This change in Trump’s stance is viewed as an attempt to attract voters who lean towards libertarian views and are unhappy with how the current Biden’s administration is handling cryptocurrency rules.
Recently, Republican Senator from Wyoming , Cynthia Lummis, declared that she is building a “pro crypto army” in the Congress. Lummis’ comments come in the wake of Democrat Senator Elizabeth Warren calling for stringent regulations in the crypto sector over fears of money laundering and other crimes.
Uptil now, the Biden government has been stringent towards crypto platforms and his Democratic party has been rather conservative in their approach towards pro crypto bills. Recent high profile convictions of crypto moguls and action against their platforms by agencies are also examples of the stringent attitude of the Biden government.
However, of late, the Biden administration is also loosening up on crypto as several Democrat senators have been seen breaking party ranks and supporting pro-crypto legislations.
Conclusion
Whether the love for crypto would accumulate into a swing vote for both Trump and Biden is an interesting aspect to watch out for. However, what is abundantly clear with the recent spot ETH ETF approval is that Biden backed SEC is on the backfoot as crypto’s popularity surges through.
