This is the third in a series of stories examining the cryptocurrency industry’s entry into politics and campaigns in 2024. The first examined the election record of the Fairshake PAC strategy, and the second focused on the 2010 Supreme Court positions.
The corporate leaders responsible for the rivers of money flooding American politics this year have already profited handsomely from last month’s election results. Personal wealth has increased by billions of dollars, far outweighing the massive spending on cryptocurrency-friendly investments. candidate.
Coinbase Inc. (COIN) CEO Brian Armstrong and his company have invested approximately $74 million in Fairshake, the industry’s dominant political action committee, putting Armstrong ahead of several other cryptocurrency insiders. That’s a particularly significant amount for a company that reported about $95 million in 2023 revenue. But the election went as planned, the company’s value had increased by $21 billion since November 4, the day before in-person voting began, and the results were clear.
In a series of pre-programmed transactions that began less than a week after the election, Armstrong sold $100 million worth of Coinbase stock. The value of the same stock the night before the election was down by about $39 million. A week later, he cashed out about $313 million. All of this was part of a sales strategy they implemented when prices spiked.
Since then, the co-founder and CEO has sold small amounts of stock each week, totaling $437 million. The stock was worth $308 million before the victory of President-elect Donald Trump and cryptocurrency-backed lawmakers. That said, the surge in pro-cryptocurrency sentiment following the election results that Armstrong helped shape has earned him an additional $129 million in wealth for the stocks 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, an increase of nearly $2 billion since November 5, according to a recent Securities and Exchange Commission (SEC) filing. has increased. .
Armstrong’s stock sale, less than three months before the U.S. election, was pitched as an official strategy to avoid accusations that corporate insiders were manipulating the markets. And sales have not yet reached the midpoint of the SEC’s disclosed intention to sell 3.75 million shares at a stock price that meets “certain threshold prices specified in the Armstrong plan.”
He took to the social media site He said he set his price targets so high that he didn’t expect most of them to sell next year “unless we do much better than expected.” COIN’s stock is currently trading at around $276, up from around $186 on November 4th.
A Coinbase spokesperson referred CoinDesk to the post when asked for comment.
Among the cryptocurrency leaders who have invested similar levels of cash in the election, his rivals include Ripple Labs CEO Brad Garlinghouse and the CEO of eponymous investment firm Andreessen Horowitz (a16z). Ripple donated $73 million, and a16z donated $70 million, including a large amount reserved for the next election cycle in 2026.
Garlinghouse reportedly owns more than a 6% stake in the company, Ripple, and a significant but unspecified amount of its associated token, XRP. As a result, he ranks high on the list of American billionaires, according to various reports. Since the election, XRP has surged to become the third-largest cryptocurrency asset by market capitalization.
Garlinghouse chose not to discuss his net worth in detail, but in a statement to CoinDesk he did mention his anticipation of President Trump’s return to the White House.
“Cryptocurrency markets have risen by over $1 trillion since Trump won. That’s the price Gensler entered the market at, and he’s not even officially gone yet,” Garlinghouse said.
Since the election, Garlinghouse’s XRP holdings have more than tripled, with the token price surging from $0.50 to $2.32. And while the privately held Ripple Labs valuation is uncertain, finalized at around $11 billion earlier this year, the election has almost certainly increased the value of his majority stake. Garlinghouse’s personal wealth likely soared as a result.
Mark Andreessen and Ben Horowitz’s financial picture is much more bleak, but both have profited dramatically from large stakes in cryptocurrency companies since last month, which will likely surpass the money they have invested in US politics. However, like the public Coinbase, financial figures are not available for a16z’s investments in private companies.
The company’s vast cryptocurrency portfolio includes holdings in Coinbase, Uniswap, Solana, EigenLayer, Anchorage Digital, and dozens of others. With the U.S. administration now run by Trump, who says he will be a cryptocurrency president, and the 535-member Congress containing about 300 people expected to support digital assets, including dozens that were just supported, the value of virtually everything has increased. by Fairshake in the election.
However, a company spokesperson declined to comment on CoinDesk’s review of Andreessen and Horowitz’s personal interests.
According to a post by the company’s Chris Dixon, A16z’s foray into U.S. politics aimed to “hold bad actors accountable and help advance clear rules that will support American innovation.”
Separately from Fairshake, Andreessen and Horowitz supported Trump’s election efforts. And Andreessen has become an advisor to the cryptocurrency-backing president-elect as he prepares to begin his second term next month.
Crypto backers from Coinbase, Ripple and a16z have combined to make the Fairshake super PAC and its affiliates the strongest corporate campaign financing effort in the 2024 election, helping 53 members of Congress win their races next year. However, Fairshake did not mention the presidential election, which may have had the biggest impact on cryptocurrency 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 Trump’s success, Garlinghouse said the cryptocurrency PAC “has absolutely helped.” It strengthened candidates and influenced the outcome of congressional races.
His company has pledged $5 million of
During the election, the cryptocurrency industry was criticized for being noticeably transactional in its political strategy. That means they’ve put their money in the best places and bought over $130 million in congressional campaign ads to frame the entire bill to ensure a future vote in favor of cryptocurrencies. Gains in the sector across the political spectrum (not to mention cryptocurrencies) have meant a boost for the three major companies behind Fairshake and the individual leaders financially connected to them.
Rick Claypool, research director at Public Citizen, which has looked at cryptocurrency campaign spending, said political efforts in the sector have been done “purely for the benefit of specific industries.” “In the short term, this has clearly created a significant boost for the cryptocurrency market.”
The return on investment for industries that invest money in politics “can often be quite good,” said Mark Hays, a senior policy analyst at Americans for Financial Reform who has also studied campaign finance issues. “Cryptocurrencies are newer, so there is greater opportunity for growth.”
While Armstrong and others prefer political stories that feature the grassroots rise of cryptocurrency voters that changed the election, he and his company founded Stand With Crypto, a group billed as a grassroots effort to harness the will of cryptocurrency voters. Participated directly in its establishment. And Fairshake’s political influence was based almost entirely on funding from Coinbase and its partner companies, plus smaller amounts from Jump Crypto and Gemini.
Gemini leaders Tyler and Cameron Winklevoss were also among Trump’s biggest fans in the cryptocurrency industry.
The day after the vote, Cameron Winklevoss posted on X: “Imagine how much we will accomplish over the next four years because the cryptocurrency industry will stop wasting billions of dollars on legal costs fighting the SEC and will instead invest this money into building the future of money. “
On November 11, the day Armstrong began selling large amounts of Coinbase stock, Tyler Winklevoss posted, “The shackles are coming off and 100,000 are coming in.” Bitcoin achieved this record just one month after the election.