Trump Mugshot NFTs Highlight Crypto’s Arrival on Campaign Trail

(Bloomberg) -- This year’s resurgence in cryptocurrency markets has made digital assets a hot topic on the campaign trail before US elections in November, and the political battle lines are becoming much more well-defined.

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Donald Trump has staked out crypto-friendly ground — complete with the sale of nonfungible tokens inspired by his mugshot — after President Joe Biden’s administration became a scourge of the industry famous for its many scams and high-profile blowups.

Yet despite all the rhetoric and some $85 million in donations to crypto-oriented political action committees, many experts are skeptical that any of it will move the needle much at the polls. Ultimately, voters just don’t care enough about the topic for it to influence them in a major way, according to Florida State University political science professor Lonna Atkeson.

“For most people, Bitcoin’s not even on their radar,” said Atkeson, who serves as director of FSU’s LeRoy Collins Institute. For those who do own cryptocurrency, they might see it simply as an investment instead of a political statement, she added.

Regardless, Bitcoin and other digital assets have emerged as stump-speech talking points alongside other hot-button issues such as inflation, abortion and the wars in Ukraine and Israel.

Take Donald Trump, who gave a full-throated endorsement of the industry last week on a day off from court in his hush money trial, when he hosted a gala for fans who purchased at least 47 NFTs from his MugShot collection. Those who made the bulk purchases even received a physical trading card containing a fragment of the suit the former president was wearing when he was booked after his August indictment for election-racketeering charges.

Meanwhile, other politicians such as independent presidential candidate Robert F. Kennedy Jr. and Republican Texas Senator Ted Cruz are making appearances on the crypto conference circuit.

And after almost four years of contentious relations between President Biden’s administration and the industry, political action committees are raking in donations and spending them on advertisements targeting anti-crypto politicians.

A crypto group with some 440,000 members launched a PAC called Stand With Crypto on Friday. It joins three crypto super PACs — Fairshake, Defend American Jobs and Protect Progress — that have raised about $85 million between 2023 and 2024, according to a Bloomberg analysis of Federal Election Commission data.

Deep-pocketed crypto donors claimed an early victory in March, when Democratic Representative Katie Porter lost a Senate primary election in California following a series of attack ads and get-out-the-vote efforts.

Yet it’s debatable how much credit that crypto donors deserve for that outcome. Porter had been at a significant disadvantage from the start since she was running against experienced “celebrity candidate” Rep. Adam Schiff, according to Dennis Kelleher, chief executive officer of the financial reform nonprofit Better Markets. Schiff has been in Congress since 2001 and was the lead impeachment manager in Trump’s first impeachment trial. Kelleher called the crypto lobby’s victory lap for that race “laughable.”

Attack Ads

One attack ad against Porter paid for by Fairshake didn’t even mention her anti-crypto stance, instead focusing on where she was getting campaign donations.

“Obviously, these commercials didn’t think that Bitcoin was the big changer or they would have went with that,” Atkeson said.

Still, the skepticism toward crypto’s influence on the ballot box is far from universal among watchers of both politics and the market. Campaign dollars spent by PACs will continue to make crypto a part of the conversation, according to Strahinja Savic, head of data and analytics at FRNT Financial.

“We’re only going to see more crypto in this U.S. election cycle, not less,” said Savic.

And unlike past elections, millions of people involved in the industry will likely vote in the upcoming presidential race, said Campbell Harvey, a professor of finance at Duke University.

‘This Time Around It’s Different’

“If you asked this question four or eight years ago, I would have said this is a really niche space and there’s not a story here,” he said. “But this time around it’s different.”

Industry research has found that one in five voters in battleground states cares about crypto policy and there really is such a thing as a “crypto voter,” according to Kristin Smith, CEO of the Blockchain Association trade group. And the fact that younger candidates are more interested in the topic could mean greater political focus on crypto in the future, she added.

“What we’re seeing in some swing states where the presidential election is very close, or even some of the Senate races, is that when you’re looking at having just such a small number of voters change the election, the position the candidate has on crypto policy does factor in for a meaningful number of people,” she said.

To Kelleher, at the crypto-critical Better Markets group, there’s another meaningful number of people to consider: All the voters who have been turned off by the long list of crimes and scandals associated with the asset class.

“It’s hard to believe that there are going to be many people who conclude that voting in favor of a bunch of criminals and predators is somehow in their interest,” he said.

--With assistance from Bill Allison.

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