The all-important US midterm elections are creeping ever closer, when Democrats and Republicans go head-to-head for control of the houses of the Senate.
In looking through the political funding this year, something jumped out – cryptocurrency companies are moving more and more into the political space, with a whole host of companies spending increasing amounts of money on political lobbying this year, despite the widespread fall in market prices, mass layoffs and the general downturn in volume across the industry this year.
Robinhood announced they would be laying off 9% of their full-time employees in April, as the downturn in markets hit the crypto and stockbroker hard. However, this came after a quarter where they donated more money towards lobbying than any other crypto company, at $610,000, an increase of 42% from the $430,000 they spent in Q4 of 2021.
Blockchain Association, Coinbase, Ripple Labs and Dapper Labs rounded out the top 5 in spending, as the graph below shows.
Looking at the overall figures, the total amount of donations was relatively even in Q4 of 2021 compared to Q1 of 2022. While markets hit all-time highs in November 2021 when Bitcoin traded at $68,000, sentiment worsened in Q1 of 2022 which is why it is notable that spending remained buoyant.
With the bear market really kicking up a gear in Q2 of 2022, one would expect there to be a dropoff across the industry once the Q2 figures are revealed.
On a more granular basis, however, there were certain moves that stood out when compared to the previous quarter, as shown above. Robinhood’s increase we have mentioned, but this was the exact opposite of another company which has also trimmed its workforce recently, Coinbase.
The prominent publicly listed exchange donated the highest amount in Q4 of 2021 at $740,000, but this figure fell 62% in the first quarter of 2022. This came amid a much-publicised $14 million outlay on a minute-long SuperBowl advert in February. Four months later, Coinbase laid off 18% of its workforce, comprising 1,100 jobs.
With midterm elections around the corner, lobbying is being thrown into the limelight evermore. While traditionally spending would rise as we near election time, the flip side is that the cryptocurrency market has been in freefall this year, evidenced by the aforementioned layoffs.
It is unclear, therefore, whether this level of lobbying expenditure will be able to be maintained. Let’s hope the layoffs don’t worsen, however.