Main conclusions
Robinhood spent more than any cryptocurrency company on lobbying expenses in the first quarter of this year, donating $610,000 before laying off 9% of its full-time employees Coinbase donated 62% less in Q1 than the previous quarter as SuperBowl ads increased spending before laying off 18% of its workforce Political spending on cryptocurrencies as a whole increased slightly in Q1 2022 despite the market downturn from the previous quarter There was $1.8 million in donations at the top five companies The all-important US midterm elections are drawing ever closer, as Democrats and Republicans vie for control of the Senate houses. When looking at political funding this year, something jumped out – cryptocurrency companies are increasingly moving into the political space, with a number of companies spending increasing amounts on political lobbying this year despite the widespread drop in market prices. , mass layoffs and the general fall in volume across the industry this year.
Political donations led by Robinhood
Robinhood announced it would lay off 9% of its full-time employees in April as the downturn in markets hit the crypto and the stock exchange hard. However, this came after a quarter in which they donated more money to the lobby than any other cryptocurrency company, with $610,000, up 42% from the $430,000 they spent in Q4 2021. Blockchain Association, Coinbase, Ripple Labs and Dapper Labs rounded out the top 5 in spending, as shown in the chart below. Looking at the overall numbers, the total amount of donations was relatively flat in Q4 2021 compared to Q1 2022. While markets hit all-time highs in November 2021, when Bitcoin traded at $68,000, sentiment worsened in the first quarter of 2022, which is why it is notable that spending has remained buoyant. With the bear market really accelerating in Q2 2022, one would expect there to be an industry-wide dip once the Q2 numbers are revealed. On a more granular basis, however, there were some movements that stood out in relation to the previous quarter, as shown above. We mentioned the increase in Robinhood, but it was the exact opposite of another company that has also reduced its workforce recently, Coinbase. The prominent publicly listed exchange donated the largest amount in Q4 2021 at $740,000, but that number dropped 62% in Q1 2022. This came amid a much-publicized disbursement of $14 million in an one minute from the SuperBowl in February. Four months later, Coinbase laid off 18% of its workforce, comprising 1,100 jobs.
With the midterm elections approaching, the lobby is increasingly in the spotlight. While spending has traditionally increased as we approach election time, the flip side is that the cryptocurrency market has been in freefall this year, evidenced by the aforementioned layoffs. It is therefore unclear whether this level of lobbying spending can be maintained. Let’s hope the layoffs don’t get worse, though.Sources
OpenSecrets.org