Political spending for upcoming elections in the U.S. may have prompted regulators to approve spot Ethereum products and lawmakers to pass a crypto markets bill. That could bode well for other bills, including one to regulate stablecoin, in the near future, according to investment bank TD Cowen. 

Pro-crypto super political action committee Fairshake PAC and its affiliates have raised more than $100 million for the 2024 election, TD Cowen said in a note on Tuesday, citing a report from consumer advocacy group Public Citizen. 

"We believe this monetary heft helps explain why the SEC approved Ether ETFs and why the House overwhelmingly passed crypto market structure legislation," TD Cowen Washington Research Group, led by Jaret Seiberg, wrote in a note on Tuesday. "We see this as positive for the stable coin bill this year and market structure in 2025." 

Last week, the Securities and Exchange Commission unexpectedly approved eight spot Ethereum exchange-traded funds, with some speculating that politics played a role. A day before the SEC's approvals, the U.S. House passed a market structure bill to regulate the crypto industry, which garnered some Democratic support, including former Speaker of the House Rep. Nancy Pelosi of California. 

A stablecoin bill was seen as low-hanging fruit, but it was entangled in who should be the primary regulator for stablecoin issuers — the federal government or state regulators. A House version passed out of that body's Financial Services Committee last year. The committee's chair, Rep. Patrick McHenry, R-N.C., and Rep. Maxine Waters, D-Calif., have said they're working on it. 

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PAC spending

Crypto industry super PACs have raised more than $100 million for the 2024 election, Public Citizen said in a report published earlier this month. More than half of the funds come from "direct corporate expenditures, such as Coinbase and Ripple Labs, while the rest come from crypto executives and venture capitalists, the group said. 

Fairshake and its affiliates make up the third largest PAC in the U.S. and spent $10 million against Rep. Katie Porter, D-Calif., in her primary race seeking the Senate seat there, Public Citizen said. When she lost, 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 who receive cash from single-issue PACs," TD Cowen said on Tuesday. "And they want to get that cash themselves to ensure their re-election."