Bitcoin, the world's most prominent digital currency, has continued its impressive rally, soaring above $43,000 for the first time since May 2022. This surge has led to a 161% year-to-date gain for Bitcoin and has positively impacted other major cryptocurrencies and crypto-linked stocks.
The rally is largely driven by anticipation that the U.S. Securities and Exchange Commission (SEC) might soon approve a spot bitcoin exchange-traded fund (ETF). This potential green light has fueled investor optimism, contributing to Bitcoin's ascent. Ethereum, the second-largest cryptocurrency by market cap, has also seen gains, though not to the same extent as Bitcoin.
The crypto industry's impact extends beyond market dynamics. In 2023, the sector is on track to set a new record for federal lobbying spending. Crypto companies have already spent $18.96 million on lobbying in the first three quarters of the year, surpassing the $16.1 million spent in the same period in 2022. Notably, this increase in spending comes despite the spectacular collapse of the FTX exchange, which had been a significant player in the lobbying arena.
Leading the lobbying efforts is Coinbase, the largest U.S. crypto exchange, which has spent $2.16 million so far. Other major contributors include Foris DAX, which operates Crypto.com, the Blockchain Association, and Binance Holdings. The crypto lobby is focused on advancing favorable legislation and repairing the industry's reputation, marred by scandals such as the collapse of FTX and the guilty verdict for its former CEO, Sam Bankman-Fried, on fraud charges.
Crypto companies are not only increasing their presence in Washington to mend reputations but also to combat growing regulatory scrutiny, particularly from the SEC. The commission has been critical of the industry, alleging widespread flouting of its rules. The lawsuit against Coinbase and Binance in June, for not registering tokens, has added to the urgency of these lobbying efforts.
Moreover, the crypto industry is eagerly awaiting the SEC's decision on the approval of a spot bitcoin ETF. Optimism surrounding this decision has been a key factor driving Bitcoin's recent price surge. Additionally, legislative victories in the House of Representatives, where two major bills beneficial to crypto companies were passed, have bolstered the industry's lobbying efforts.
The increased lobbying presence of crypto firms in Washington highlights the sector's growing influence and its efforts to shape policy in a rapidly evolving digital currency landscape. The industry's robust lobbying strategy, combined with the positive market momentum led by Bitcoin, points to a critical period of growth and transformation for cryptocurrencies.
