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Washington firestorm is behind Democrats’ sudden crypto shift – DL News
- After all, the SEC is close to approving Ethereum ETFs.
- This change of heart is likely due to a seismic shift in Washington, according to Galaxy’s Novogratz.
- 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’s like someone in the Biden White House called and said ‘Guys, we can’t be the party against crypto 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 have products ready before the crucial May 23 deadline, CoinDesk reported.
Ethereum has soared 20% since about-face rumors surfaced via Bloomberg Intelligence ETF analysts Eric Balchunas and James Seyffart.
If the SEC’s change of heart was politically motivated, “this is a seismic shift,” Novogratz said. “If this is what actually happened, prices will be much higher than here.”
Fire storm
Prominent members of the Democratic Party – particularly Massachusetts Senator Elizabeth Warren – have long been critical of crypto, while Republicans have generally been more receptive to the industry.
The difference in approach has become particularly striking in recent weeks. Former President Donald Trump, historically crypto agnostic, recently said he will support industry if he is re-elected.
President Joe Biden, meanwhile, has threatened to veto a motion to repeal SAB 121, a controversial crypto accounting ruledespite bipartisan support for repeal.
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The contrast between the two politicians – less than six months before their US presidential election clash – “sparked a storm,” Novogratz said.
“It’s almost become a purity test – Republicans are good for crypto, Democrats are bad for crypto. And the Democratic regime woke up and said, ‘This is crazy,'” he said.
With Trump leading Biden in polls and crypto super PACs raising more than $150 million to advance pro-industry candidates, sometimes in vulnerable swing states, Democrats’ aversion to crypto had less and less meaning, Novogratz said.
“It’s really Elizabeth Warren and a small group of people who have held the Democrats hostage on this,” he said, adding that Senate Democratic leader Chuck Schumer, who voted for repeal of SAB 121, probably told Warren “enough is enough, this is getting stupid.
“There is no reason to make cryptography, which is a technology, a political issue,” Novogratz added. “I hope this message begins to resonate.”
Tom Carreras is markets correspondent for DL News. Do you have any advice? Contact us at tcarreras@dlnews.com