Some Lawmakers and Their Families Are Betting Thousands of Dollars on Crypto
As per an analysis done by CNBC in the past, eight lawmakers or their immediate family members traded cryptocurrencies in the year 2021, with trades ranging from $1,000 to as high as $100,000 in value. Seven Republicans purchased or sold cryptocurrencies including Former Sen. Pat Toomey, who used to be the ranking member of the banking committee. Most crypto-related trades were by Republicans while only one Democrat Rep. Marie Newman reported a transaction. Bitcoin (BTC:US) was the most popular cryptocurrency, with trades totaling an estimated $229,000, followed by Ether (ETC:US), with a total of about $40,000. Lawmakers also invested a value of around $32,000 in Dogecoin (DOGE:US).
However, crypto trades have been causing concerns over potential conflicts of interest in Congress. Mainly because the crypto industry was ramping up its lobbying machine as lawmakers and regulators were considering new rules for the sector. But it remains unclear whether crypto would be covered by proposals to ban lawmakers from trading individual stocks. Senator Sherrod Brown, who introduced legislation prohibiting stock trading, told CNBC that crypto presents different issues than traditional investing. Unsurprisingly, Brown heads the Senate Banking Committee which held a hearing on stablecoins.
Two of the lawmakers who traded cryptocurrencies over the past year told CNBC that they support limits on Congress’s financial activity. Financial disclosures show that Rep. Newman and her husband invested twice in the Grayscale Bitcoin Trust (GBTC:US): an investment of $15,000 - $50,000 in November, followed by another between $1,000 and $15,000 in January. A spokesman said both trades were handled by Newman’s husband.
Rep. Mark Green was the most active crypto trader in Congress over the year 2021. He reported sixteen transactions of about $1,000 to $15,000 each, mostly through a joint account. For example, his disclosures show that he purchased Dogecoin on April 1 for nearly six cents. He bought more on April 14 at about 12 cents. He then sold on May 11 when dogecoin was trading at around 49 cents.
The growing adoption of crypto by lawmakers and their families is an indication of the increasing acceptance of digital assets by the mainstream. Cryptocurrencies have been growing in popularity as an investment, especially since the Covid-19 pandemic. As a result, several companies have invested in Bitcoin and other cryptocurrencies as a hedge against inflation. Tesla (TSLA:US) invested $1.5 billion in Bitcoin earlier in 2022 and started accepting it as payment for its cars. However, the volatile nature of cryptocurrencies makes them risky investments and investors should consider the potential risks.
Despite the growing trust by a wide audience of investors in crypto, these trades are causing concerns over potential conflicts of interest in Congress. Lawmakers and regulators are considering new rules for the sector, but it remains unclear whether crypto would be covered by proposals to ban lawmakers from trading individual stocks.