News
A Washington Firestorm Is Behind Democrats’ Sudden Crypto Shift – DL News
- After all, the SEC is ready to approve Ethereum ETFs.
- The change of heart is likely due to a sea change in Washington, Galaxy’s Novogratz says.
- Democrats were probably afraid of being seen as anti-crypto ahead of the US elections.
According to Mike Novogratz, CEO of Galaxy Digital, a “widespread shift among Democrats” in Washington over the past 24 hours has completely upended the Ethereum ETF game.
“It looks like someone in the Biden White House made a call and said ‘Guys, we can’t be the anti-crypto party anymore,’” Novogratz said CNBC.
After months of silence, the Securities and Exchange Commission is frantically communicating with potential ETF issuers, including Galaxy, in order to prepare products ahead of the crucial May 23 deadline, CoinDesk reported.
Ethereum rose 20% after initial rumors of an about-face emerged via Bloomberg Intelligence ETF analysts Eric Balchunas and James Seyffart.
If the SEC’s change of heart had been politically motivated, “it would have been a seismic shift,” Novogratz said. “If this is what really happened, prices will be much higher than here.”
Firestorm
Prominent members of the Democratic Party, most notably Massachusetts Senator Elizabeth Warren, have long been critical of cryptocurrencies, while Republicans are generally more open to the industry.
The difference in approach has become particularly evident in the last two weeks. Former President Donald Trump, historically crypto-agnostic, recently said as much will support the industry if re-elected.
President Joe Biden, meanwhile, threatened to veto the motion to repeal SAB 121, a controversial crypto accounting ruledespite bipartisan support for repeal.
Join the community to get our latest stories and updates
The dispute between the two politicians – less than six months before they face each other in the US presidential election – “set off a firestorm,” Novogratz said.
“It’s almost become a purity test: Republicans are crypto positive, Democrats are crypto negative. And the democratic regime woke up and said, ‘This is crazy,’” she said.
With Trump leading Biden in the polls and crypto super PACs raising more than $150 million to promote pro-industry candidates, sometimes in vulnerable swing states, Democrats’ aversion to cryptocurrencies makes less and less sense, Novogratz said.
“It was really Elizabeth Warren and a small group of people who were holding the Democrats hostage in this case,” he said, adding that Democratic Senate leader Chuck Schumer, who voted to repeal SAB 121, likely said to Warren “enough, this is going dumb.”
“There is no reason to make cryptocurrency, which is a technology, a political issue,” Novogratz added. “Hopefully the message is starting to resonate.”
Tom Carreras is a markets correspondent for DL News. Do you have advice? Contact tcarreras@dlnews.com