$189 Million Shelled Out: What Do Crypto Backers Get?

By Teresa Xie, Bloomberg

Translated by Saoirse, Foresight News

Editor’s note: Crypto billionaires threw heavy bets on the 2026 midterm elections, hoping to secure lenient and friendly regulations, but underestimated public backlash against capital interfering in politics. Teresa Xie reviews this high-stakes political gamble. On votes, regulatory expectations, and the crypto market, it ultimately delivered a result vastly different from what the industry anticipated. Here is the full content of the article:

A spectator cheers at an election night event in Los Angeles as news coverage displays the results. Photographer: Caroline Brehman / Bloomberg

The Dust Settles

Billionaires in the crypto space have never shied away from voicing their views, whether championing the advantages of blockchain or advancing various sci-fi-sounding projects.

On political issues, this group, which self-identifies as the dominant force in the digital world, has consistently argued that the crypto industry deserves its own set of regulatory rules. To achieve this goal, they have served as key campaign donors in the past two U.S. election cycles, including these midterm elections.

In 2024, they bet on Trump adopting a crypto-friendly policy trajectory, and that political investment paid off. But this time, they learned that money isn't omnipotent. Democrats swept control of both the Senate and the House, leaving large crypto donors in a precarious position, mirroring other tech elites whose political gambles failed and drew heavy criticism.

Peter Loge, dean of the College of Media and Public Affairs at George Washington University, stated: "Cryptocurrency is merely one thread in a larger narrative: The tech industry appears to have spiraled out of control, and the billionaires who seem to wield it show little regard for the interests of ordinary Americans. The Republican Party has become tied to this image of unrestrained elites, dragging the crypto industry into the same label."

Crypto-Backed Candidates Face Wave of Defeats

While regulatory winds may shift again in the future, thanks to long-term lobbying efforts, the crypto industry has secured certain favorable outcomes that are unlikely to be easily overturned. Trump signed the landmark GENIUS Act, establishing a federal regulatory framework for stablecoins. Regulators have also rolled out policies to lower operational barriers for digital asset companies. With Democrats controlling Congress, stricter regulations are likely to be advanced, limiting agencies' autonomy, though regulators appointed by Trump previously remain in office.

Public Citizen reported that through the first quarter of the 2026 midterm election cycle, crypto firms had cumulatively donated $189 million to various Political Action Committees (PACs), up from $119 million spent in 2024 to support pro-crypto candidates. Meanwhile, AI-focused super PACs invested an additional $72.3 million in this election cycle during the same period.

The political return on massive financial injections proved negligible. Of the 12 fiercely contested races where super PACs focused on AI and crypto poured heavy funds, 9 of the backed candidates lost. The most devastating blow for the crypto industry occurred in Ohio: An affiliate of Fairshake, the largest crypto PAC in the nation, invested $64 million to support Jon Husted's campaign, only for Husted to ultimately lose to staunch crypto skeptic Sherrod Brown.

(Note: PAC stands for Political Action Committee, a U.S. entity used to raise funds to influence elections. Fairshake is a super PAC for the crypto industry, allowed to raise unlimited funds but prohibited from directly transferring money to candidates.)

Molly White, a researcher on crypto and technology and contributor to the newsletter Citation Needed, remarked: "Overall, this election was a crushing defeat for the crypto industry. Crypto backers made small investments largely in safe seats where the outcomes were largely as expected. But in swing districts where they threw heavy money, their track record was decidedly unimpressive."

Industry messaging, however, deliberately focused on positive outcomes. Stand With Crypto, a grassroots advocacy organization launched with Coinbase's support, publicly claimed that lawmakers supporting crypto policies won 228 seats in the House and 19 in the Senate.

A total of 19 pro-crypto senators and 8 anti-crypto senators were elected in this cycle, alongside 228 pro-crypto representatives and 106 anti-crypto representatives, with Democrats taking control of both chambers.

In an email, Fairshake stated: "Fairshake played a substantial role in winning several highly competitive races in 2026, and we will continue to engage in 2028. New and incumbent lawmakers must now make a choice: protect consumers and safeguard American jobs, or hinder industry progress. We will keep watching closely, as 2028 will usher in a completely new electoral landscape."

Meanwhile, risk-hedging behavior emerged within the industry. Even though Ripple remains one of Fairshake's top funders, its co-founder Chris Larsen still contributed $4 million to support Brown. For years, the crypto industry has sought clear, stable regulatory frameworks. Democrats' decisive midterm victory also raises questions for observers: Can the political dividends painstakingly won by crypto firms endure? Will companies continue to enjoy a lenient, business-friendly regulatory environment?

(Note: Sherrod Brown is a Democratic senator from Ohio and a vocal critic of cryptocurrency. During this election, Fairshake poured $64 million into backing his opponent Jon Husted in hopes of unseating him, but Brown held on. He advocates for strict regulation of crypto and stablecoins, prioritizes consumer protection, and frequently blocked pro-crypto bills during his tenure as Chair of the Senate Banking Committee. Interestingly, while Ripple donated heavily to Fairshake, its founder personally funded Brown—a classic example of hedging mentioned in the text.)

Molly White added: "Crypto capital leaned right, but voters turned left. The public strongly resents outside money infiltrating elections. This time, crypto billionaires attempting to buy political leverage became the center of public scrutiny."

WLFI Slides Amid Midterm Results

Democrats' sweeping victory struck hard at these tightly politically linked crypto assets in the market. The WLFI token, issued by World Liberty Financial co-founded by Trump, fell roughly 6% on Wednesday; a meme coin named after him plunged around 20%.