A significant surge in political spending for the upcoming US elections may have played a crucial role in regulators approving spot Ethereum products and lawmakers passing a crypto markets bill, according to investment bank TD Cowen. This development could have a positive impact on other bills, including the stablecoin regulation, in the near future. Pro-crypto super political action committee Fairshake PAC and its affiliates have raised a staggering $100 million for the 2024 election, as reported by consumer advocacy group Public Citizen.

The TD Cowen Washington Research Group, led by Jaret Seiberg, believes that this substantial political spending has contributed to the Securities and Exchange Commission's unexpected approval of eight spot Ethereum exchange-traded funds. Additionally, the US House passed a market structure bill to regulate the crypto industry, garnering some Democratic support, including from former Speaker of the House Rep. Nancy Pelosi of California. A stablecoin bill, considered low-hanging fruit, has been entangled in the debate over who should be the primary regulator for stablecoin issuers - the federal government or state regulators.

A House version of the stablecoin bill passed out of the Financial Services Committee last year, with committee chair Rep. Patrick McHenry, R-N.C., and Rep. Maxine Waters, D-Calif., working on its progress. Crypto industry super PACs have raised over $100 million for the 2024 election, with more than half of the funds coming from direct corporate expenditures, such as Coinbase and Ripple Labs, and the rest from crypto executives and venture capitalists.

Fairshake and its affiliates have emerged as the third-largest PAC in the US, spending $10 million against Rep. Katie Porter, D-Calif., in her primary race for the Senate seat. When she lost, Porter criticized the "$10 million+ on attack ads" against her. TD Cowen notes that "few things speak louder in politics than campaign contributions." Incumbents are keen to avoid challengers who receive cash from single-issue PACs and are eager to secure re-election funds themselves.

The recent surge in political spending has created a favorable environment for the stablecoin bill to pass this year, according to TD Cowen. The investment bank believes that this development, combined with the SEC's approval of spot Ethereum products and the House's passage of the crypto market structure bill, bodes well for the stablecoin regulation and market structure in 2025. As the political landscape continues to evolve, it will be interesting to see how this significant political spending influences the future of crypto regulation.