This election cycle saw a sharp increase in political spending from cryptocurrency companies, positioning the industry to influence U.S. politics. Already several states have begun exploring the creation of strategic Bitcoin reserves. As Bitcoin becomes more institutionalized, its adoption by state treasuries is seen as a victory for the crypto sector.However, this trend raises concerns about the future rights of Bitcoin holders, as greater government oversight and institutional involvement could transform Bitcoin from the cypherpunk’s dream of decentralized, peer-to-peer currency into just another financial asset.In the 2024 election cycle, cryptocurrency corporations have spent over $119 million to influence federal elections, with nearly half of all corporate political donations this year coming from the crypto sector. These funds have been channeled primarily into a non-partisan super PAC, Fairshake, which supports pro-crypto candidates and opposes crypto skeptics. Crypto companies are now the largest corporate political spenders, surpassing even Koch Industries, which has contributed significantly but remains far behind in comparison. Since the 2010 Citizens United ruling, crypto corporations have spent $129 million, making them the second-largest corporate election spenders after fossil fuel companies. This unprecedented level of spending reflects the industry’s push to shape regulations in its favor.With the election over, there is an anticipated push for states to adopt more crypto-friendly policies, including allowing public pension funds and treasuries to invest in Bitcoin. Some state pension funds such as Wisconsin and Michigan have already added Bitcoin ETFs to their portfolios. In November, Representative Mike Cabell introduced the Pennsylvania Bitcoin Strategic Reserve Act, proposing that the state treasurer allocate up to 10% of Pennsylvania’s General Fund, Rainy Day Fund, and State Investment Fund into Bitcoin. Following this in December, Texas Representative Giovanni Capriglione proposed a bill for a strategic Bitcoin reserve to be held for at least five years in a cold wallet and in Ohio Representative Derek Merrin has a bill for the creation of a Bitcoin fund in the state Treasury and grants the state Treasurer with discretionary power to purchase Bitcoin. Meanwhile, some U.S. states have taken the lead in cryptocurrency and blockchain regulation. Arizona has considered legislation to define Bitcoin as legal tender and permit state agencies to accept cryptocurrency payments. Oklahoma has enacted laws affirming rights to self-custody cryptocurrencies and engage in digital asset mining. Pennsylvania’s House passed a bill securing rights to self-custody digital assets and conduct cryptocurrency transactions and Louisiana now has provisions for node operation and home digital asset mining. Recently eighteen U.S. states also filed a lawsuit against the Securities and Exchange Commission (SEC), seeking to halt its enforcement actio
Power Dynamics: The Impact of Institutional Involvement on Bitcoin’s Evolution
