Political spending for upcoming U.S. elections may have influenced regulators to approve spot Ethereum products and lawmakers to pass a crypto markets bill, which could favor future bills like the one regulating stablecoins, according to investment bank TD Cowen.

The pro-crypto super PAC, Fairshake PAC, and its affiliates have raised over $100 million for the 2024 election, TD Cowen noted, citing a report from consumer advocacy group Public Citizen.

"We believe this significant financial influence explains why the SEC approved Ether ETFs and why the House passed crypto market structure legislation by a wide margin," wrote the TD Cowen Washington Research Group, led by Jaret Seiberg. "This bodes well for the stablecoin bill this year and market structure reforms in 2025."

Last week, the SEC unexpectedly approved eight spot Ethereum ETFs, with some speculating that political factors played a role. Just before the SEC's approvals, the U.S. House passed a market structure bill to regulate the crypto industry, with support from some Democrats, including former Speaker Nancy Pelosi.

A stablecoin bill, though considered easier to pass, has been stalled over whether the federal government or state regulators should oversee stablecoin issuers. The House's Financial Services Committee passed a version last year, and its chair, Rep. Patrick McHenry, R-N.C., along with Rep. Maxine Waters, D-Calif., are working on it.

PAC Spending

Crypto industry super PACs have raised over $100 million for the 2024 election, according to a report by Public Citizen. More than half of the funds come from corporate sources like Coinbase and Ripple Labs, with the rest from crypto executives and venture capitalists.

Fairshake and its affiliates are the third largest PAC in the U.S. and spent $10 million against Rep. Katie Porter, D-Calif., in her Senate primary race. After her loss, Porter criticized the "$10 million+ on attack ads" against her.

"Few things speak louder in politics than campaign contributions. Incumbents do not want to face challengers funded by single-issue PACs," TD Cowen stated. "And they want to secure those funds for their own re-election campaigns."