This is the third in a series of articles exploring the crypto industry's foray into high-stakes politics and campaigns in 2024. The first examined the electoral performance of FairShake PAC's strategy, and the second examined its intensive exploitation of the 2010 Supreme Court position.
The corporate leaders responsible for the river of money that has flooded US politics this year have already benefited enormously from the results of last month's election, with their personal fortunes increasing by billions of dollars and crypto-friendly. This far exceeds the huge amount spent on investment. candidates.
Coinbase Inc. (COIN) CEO Brian Armstrong and his company have committed approximately $74 million to FairShake, the industry's leading political action committee, with Armstrong joining a number of other crypto insiders. He took a narrow lead against his name. This is a particularly large sum from a company that posted profits of approximately $95 million in 2023. But the election went smoothly, with the company's value increasing by $21 billion since Nov. 4, the day before in-person voting began and the results were known.
In a series of pre-programmed trades that began less than a week after the election, Armstrong sold $100 million worth of Coinbase stock. The value of the same stock on the eve of the election was about $39 million lower. A week later, he cashed in about $313 million. This was all part of a sales strategy that would kick in if prices skyrocketed.
Since then, the co-founder and CEO has sold a small amount each week, selling off shares that were worth $308 million before the victory of President-elect Donald Trump and crypto-backed members of Congress. was sold for a total of approximately $437 million. In other words, the post-election pro-crypto sentiment that Armstrong helped shape resulted in an additional $129 million in wealth for the shares he sold.
He still owns more than 10% of the largest U.S. cryptocurrency exchange, and the roughly 24 million shares held in his trust are worth about $6.4 billion, according to the latest Securities and Exchange Commission filings. That's an increase of nearly $2 billion since November 5th. .
Mr. Armstrong's stock sale was planned three months before the U.S. election and was presented as a formal strategy aimed at distancing company insiders from accusations of taking advantage of the market. And the sale price still falls short of the SEC's announced intention to sell up to 3.75 million shares, depending on whether the stock price meets “certain threshold prices specified in the Armstrong Plan.”
He explained his plans on social media site He said he has set his price target so high that he doesn't expect much of it to be sold next year “unless it's much better than expected.” COIN stock is currently trading around $276, up from around $186 on November 4th.
A Coinbase spokesperson referred CoinDesk to the post when asked for comment.
His rivals among crypto leaders who have committed similar levels of cash to the election include Ripple Labs CEO Brad Garlinghouse and namesake investment firm Andreessen Horowitz (a16z). This includes those responsible for Ripple donated $73 million and a16z contributed $70 million, including a large amount of money that will be set aside for the next election cycle in 2026.
Garlinghouse reportedly owns over 6% of Ripple and an unspecified amount of the token XRP tied to it. As a result, various reports placed him at the top of the list of US billionaires. After the election, XRP skyrocketed and became the third largest cryptocurrency by market capitalization.
Garlinghouse chose not to discuss the details of his net worth, but acknowledged his excitement over Trump's return to the White House in a statement to CoinDesk.
“The crypto market is up more than $1 trillion since Trump won. This is the cost of Gensler’s stranglehold on the market, and he hasn’t even officially stepped down yet.” Garlinghouse said.
Since the election, Garlinghouse's XRP holdings have more than tripled as the token's price has jumped from $0.50 to $2.32. And while the valuation of privately held Ripple Labs is opaque and was last set at around $11 billion earlier this year, the election has almost certainly increased the value of his main holdings. As a result, Garlinghouse's personal wealth likely has skyrocketed.
The finances of Marc Andreessen and Ben Horowitz are more murky, but the pair have profited dramatically from their large stakes in crypto companies since last month, likely diverting the money they put into U.S. politics. It's probably better. However, unlike public Coinbase, financial numbers are not available for a16z's investments in private companies.
The company's vast crypto portfolio includes stocks in Coinbase, Uniswap, Solana, EigenLayer, Anchorage Digital, and dozens of other companies. The US executive branch says President Trump will be the crypto president, and the 535-member Congress includes about 300 Congresses that are expected to support digital assets, effectively increasing the value of all of them. Ta. By Fair Shake in the election.
However, a company spokesperson declined to comment on CoinDesk's review of Andreessen and Horowitz's personal interests.
A16z's entry into U.S. politics was aimed at “promoting clear rules that support American innovation while holding bad actors accountable,” according to a post from Chris Dixon of the company.
Apart from Fair Shake, Mr. Andreessen and Mr. Horowitz supported Mr. Trump's campaign. Andreessen has become an advisor to the next president, a pro-cryptocurrency advocate who is about to begin his second term next month.
Cryptocurrency backers from Coinbase, Ripple, and a16z have teamed up to help the Fairshake super PAC and its affiliates become the most powerful corporate campaign finance operation in the 2024 election, helping 53 members of Congress win elections next year. We supported. However, Fairshake did not take into account the presidential election that may have had the biggest impact on crypto market prices.
“I think it's clear that Donald Trump has embraced crypto and crypto has embraced Donald Trump,” Garlinghouse said in a post-election interview on 60 Minutes. Although he didn't claim credit for it, he said the crypto PAC “definitely helped.” “encouraging candidates” and influencing the outcome of parliamentary elections.
His company has pledged $5 million in XRP for Trump's inauguration (celebrations for his return next month), and Coinbase and fellow US cryptocurrency exchange Kraken have also stepped in with funding.
During the election, the crypto industry was accused by critics of being overly transactional in its political strategy, putting money where it was best to secure future pro-crypto votes on legislation and organizing all elections. purchased more than $130 million in targeted Congressional campaign ads. The political spectrum (without mentioning cryptocurrencies). The sector's gains represent a boost for the three main companies behind FairShake and the individual leaders with financial ties to those companies.
Rick Claypool, research director at Public Citizen, which has investigated crypto campaign finance, said the sector's political efforts were done “purely for the benefit of a particular industry.” “In the short term, obviously this has led to a big rally in cryptocurrencies.”
Mark Hayes, a senior policy analyst at Americans for Financial Reform who has also worked on campaign finance issues, said the return on investment for industries that put money into politics is “often pretty good.” points out. “Since cryptocurrencies are new, the opportunities for growth are greater.”
While Armstrong and his colleagues favor political narratives that feature the grassroots upsurge of crypto voters that drove elections, he and his company are pushing what they call grassroots efforts to harness the will of crypto voters. He was directly involved in the establishment of the organization “Stand With Crypto''. And FairShake’s political influence was based almost entirely on funding from Coinbase and its partners, as well as smaller amounts from Jump Crypto and Gemini.
Gemini leaders Tyler and Cameron Winklevoss were also among President Trump's most vocal fans in the crypto world.
The day after the vote, Cameron Winklevoss posted on X: “The crypto industry won’t waste billions of dollars in legal fees fighting the SEC and instead use that money for a great future for money.”
On November 11, the day Armstrong began selling a large amount of Coinbase stock, Tyler Winklevoss posted, “The shackles are off, 100,000 shares coming in.” Bitcoin reached that level a month after the election.
