With more than 19,000 virtual currencies in existence, the cryptocurrency industry has likened the current state of the market to the early years of the internet. Industry players said however that most of these coins will collapse.
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Candidates running for election in the 2022 midterms could see a boost to their campaign war chests with the launch of a fundraising platform that will accept and process crypto donations.
The new platform, titled Engage Raise, is set to launch in July and will allow federal candidates to raise campaign cash solely through cryptocurrencies.
Crypto executives have contributed more than $30 million toward federal candidates and campaigns since the start of the 2020 election cycle, with more crypto advocates such as bitcoin investor Erik Finman become key campaign funders.
“Candidates can use our platform to connect with the crypto and blockchain community via fundraising, events, and messaging,” Martin Dobelle, CEO of Engage Labs, the parent company of Engage Raise, told CNBC in an email. Campaigns will be able to process contributions in all major cryptocurrencies through a web browser or by adding a widget to their websites, Dobelle said.
Although digital currencies are known for allowing their owners to conduct transactions anonymously, all crypto donations through Engage will need to be disclosed to the Federal Election Commission like most campaign contributions.
Dobelle said Engage Labs has already seen almost $1 million in pre-seed investments. He said a chunk of the early financing came from business leaders, including Al Reid, founding partner of Calypso Investment Partners, and Raf Michalowski, CEO of hotspot seller CoastFi .
Allan Keen, chairman of real estate firm Keewin Real Property, said he invested in Engage Labs, in part, because he believes it helps bring “the Democratic process further into the digital age, by allowing the acceptance of cryptocurrencies for campaign donations.”
The move to create an online platform for political donors to use cryptocurrencies comes as the larger crypto industry becomes a powerful lobbying force in Washington.
While crypto has tried to wield its influence on Capitol Hill, the industry as a whole appears to be in the midst of a bumpy stretch. Coinbase, a cryptocurrency exchange, recently announced it was laying off almost a fifth of its workforce amid a collapse in its stock and crypto prices.
Bitcoin this week plunged to a new 18-month low, falling below $21,000 on Wednesday. The most valuable cryptocurrency is down nearly 70% since reaching an all-time high of over $68,000 in November 2021. Ether, the second-biggest token, has fallen almost 80% from the peak of the crypto craze.
Dobelle is plowing ahead with the launch of Engage Labs and Engage Raise despite crypto’s struggles, believing that digital currency markets will rebound by the beginning of next year and carry through the 2024 election, when crypto-related fundraising could play a role in the presidential vote.
“We’re optimistic that the broader market will recover, along with crypto, and that a major crypto up-cycle will lead into the crucially important election in 2024,” Dobelle said.