The Key Takeaways
- Robinhood spent $610,000 in lobbying this year and laid off 9% of its full time employees. This was the highest amount of any crypto company.
- Coinbase donated 62% less Q1 than in the previous quarter due to SuperBowl ads increasing expenditures before laying off 18%.
- Despite the market downturn, cryptocurrency’s overall political spending rose slightly in Q1 2022.
- The top five companies received $1.8 million in donations
The crucial US midterm elections, in which Democrats and Republicans vie for control of both the Senate houses, are getting closer.
One thing stood out when I looked at the data on political funding for this year: cryptocurrency companies are increasingly moving into the political space. A whole host of companies have been spending more money this year on lobbying, despite widespread market declines, mass layoffs, and general downturn in the industry.
Robinhood leads political donations
Robinhood announced that they would lay off 9% of their full time employees in April as the market downturn hit the stockbroker and crypto-dealer hard. This was despite Robinhood spending $610,000 more in lobbying money than any other crypto company. This is 42% more than the $430,000 they spent during Q4 2021.
The top five in spending were completed by Blockchain Association, Coinbase Ripple Labs, Dapper Labs, and Coinbase. See the graph below.
The total donations were relatively equal in Q4 2021 to Q1 2022, based on the overall numbers. Markets reached all-time highs in November 2021, when Bitcoin traded at $68,000. However, sentiment deteriorated in Q1 2022. This is why spending remained buoyant.
The bear market is really taking off in Q2 2022. One would expect a dropoff in the industry after the Q2 figures are released.
However, certain actions stood out in the current quarter when compared to previous quarters, as shown below. We have already mentioned Robinhood’s rise, but Coinbase, which recently trimmed its workforce, was exactly the opposite.
This prominent exchange was the most generous in Q4 2021, giving $740,000. However, this number fell 62% to the first quarter 2022. This was in the midst of a well-publicized $14 million expenditure on a SuperBowl advertisement that lasted just over a minute. Four months later, Coinbase had laid off 18% its workforce. It employed 1,100 people.
Midterm elections are just around the corner and lobbying is in the spotlight more than ever. While spending is traditionally higher as we get closer to election time, the flipside of the coin is that the cryptocurrency market is in freefall this past year, as evidenced by the aforementioned layoffs.
This raises the question of whether lobbying spending can be sustained. We can only hope that the layoffs do not get worse.