This is the third installment in a series delving into the crypto industry’s high-stakes involvement in the 2024 political arena. The first part analyzed Fairshake PAC’s track record, while the second examined its reliance on a 2010 Supreme Court ruling to justify its aggressive political spending.
The architects of the financial flood that surged into U.S. politics this year have already reaped massive rewards from the recent election, amassing billions in personal wealth far exceeding their campaign contributions aimed at electing crypto-friendly candidates.
Coinbase’s Political Power Move
Brian Armstrong, the CEO of Coinbase Inc. (COIN), led the charge, channeling approximately $74 million into Fairshake PAC, the dominant political action committee representing the crypto industry. This contribution was particularly notable given Coinbase’s modest $95 million in profits for 2023. However, the investment paid off handsomely, with the company’s market value skyrocketing by $21 billion after the elections.
Less than a week after the results were confirmed, Armstrong initiated pre-arranged stock trades, selling $100 million worth of Coinbase shares. The same shares had been worth $39 million less before Election Day. Over the following weeks, his sales reached a total of $437 million, generating $129 million in additional gains thanks to the post-election surge in Coinbase’s stock price.
Despite these sales, Armstrong retains more than 10% ownership of Coinbase, with approximately 24 million shares held in trust. As of the latest filings, these shares are valued at $6.4 billion, a $2 billion increase since the election.
Armstrong’s stock sales were part of a pre-disclosed strategy submitted to the SEC months before the election, aimed at insulating him from allegations of market manipulation. He had previously explained on social media platform X that the sales were intended to fund “moonshot” investments while maintaining the majority of his holdings.
Ripple and XRP’s Meteoric Rise
Ripple Labs CEO Brad Garlinghouse was another key figure in the crypto industry’s political efforts, with Ripple contributing $73 million to Fairshake PAC. Following the elections, XRP, Ripple’s native token, surged from $0.50 to $2.32, becoming the third-largest cryptocurrency by market capitalization.
Garlinghouse, who reportedly owns over 6% of Ripple along with substantial XRP holdings, has seen his wealth multiply dramatically. In a statement to CoinDesk, he attributed the market rally to the election results, suggesting that the removal of regulatory pressures had unleashed pent-up enthusiasm.
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Andreessen Horowitz’s Strategic Influence
Mark Andreessen and Ben Horowitz, the co-founders of venture capital giant Andreessen Horowitz (a16z), also played pivotal roles, directing $70 million into the political landscape. While exact figures for their personal gains remain elusive, the firm’s vast portfolio, which includes stakes in Coinbase, Solana, and Uniswap, has significantly appreciated in value.
In addition to Fairshake, a16z supported Donald Trump’s presidential campaign, with Andreessen reportedly becoming an advisor to the president-elect as he prepares for his second term.
A Unified Effort
Together, Coinbase, Ripple, and a16z helped transform Fairshake into a powerhouse PAC that influenced 53 congressional races, securing a favorable legislative environment for digital assets. However, Fairshake did not directly engage in the presidential race, despite its significant impact on the crypto market.
The crypto industry’s campaign spending drew criticism for its transactional nature, with opponents accusing it of prioritizing industry-specific interests over broader policy considerations. Yet, the financial returns for key players like Armstrong, Garlinghouse, and Andreessen suggest that their investments in politics were highly profitable.
As the crypto market continues to rally, the sector’s leaders are looking ahead to a more favorable regulatory environment, positioning themselves to capitalize on what they describe as a transformative moment for digital assets.