- Monday, May 20, 2024
The wealthy Democratic businessman, who is financing his campaigns, diverted $3.7m from his campaign budget this year to invest in the Grayscale Bitcoin ETF and in three months, it generated $1.3m in profit and interest income.
By: Shubham Ghosh
MICHIGAN’S Indian-origin Congressman Shri Thanedar’s daring decision to allocate campaign funds into cryptocurrency has yielded fruitful results. The wealthy Democratic businessman, who is financing his campaigns, diverted $3.7 million from his campaign budget this year to invest in the Grayscale Bitcoin ETF (GBTC), an exchange-traded fund focused on cryptocurrency, said a US media report.
It was in just three months that Thanedar’s investment generated $1.3 million in profit and interest income, representing a significant 35 per cent return on investment for his campaign committee, The Detroit News reported.
The campaign strategically executed five purchases of GBTC between January and March, aligning with an impressive 82 per cent growth in the fund’s value during that time frame, the report added.
Although investing campaign funds is permissible under federal campaign election regulations, it is generally infrequent due to the financial risks and associated costs involved.
However, Thanedar, 69, intends to liquidate his investments as needed for his Democratic primary campaign, scheduled to kick off in June.
The strategy allows him to sidestep extensive fundraising efforts.
Speaking to The Detroit News, the Democratic leader said he was encouraged by the investment strategies followed by some fellow candidates, including Adam Smith from California who is running for the Senate.
However, despite the potential for substantial profits, many candidates avoid investment ventures due to the risk of jeopardizing donors’ contributions, especially when dealing with volatile assets such as cryptocurrency.
The calculus differs for self-funding candidates such as Thanedar, the report said. This is because a significant portion of the investment comes from personal funds. Thanedar has loaned his campaign over $3.3 million since last December, resulting in cash reserves surpassing $5 million by the quarter end.
Thanedar faces challenges from former state Senator Adam Hollier and Detroit City Councilwoman Mary Waters, both hailing from Detroit, in the upcoming primary race.
In the previous election, the Michigan lawmaker allocated $6 million for his initial US House campaign in the state’s 13th District in 2022.
