With the approval of the BTC ETF earlier this year and the upcoming US elections, the influence of cryptocurrency on US politics is gradually becoming more apparent. In recent times, with a series of actions by Donald Trump, cryptocurrency has become an important factor in gaining votes and financial support in US political elections.
Today, LBank will take stock of the US political attitude towards cryptocurrency and further predict the future trends of the cryptocurrency market.
The Crazy Candidates, Cryptocurrency, and Votes
In 2024, the US presidential election will be a crucial moment in the race for the “ken” moment.
Trump doesn’t want to miss out on the new power that cryptocurrency brings, but at the same time, he keeps the SEC at arm’s length with various economic sanctions. Compared to Singapore’s swift action, the relationship between the US political arena and cryptocurrency is more like a vague period of ambiguity. It’s neither official nor hidden, but rather immersed in a seemingly ambiguous and unacknowledged tug-of-war.
Firstly, there’s Trump, who has made crazy statements and used meme effects to quickly open the gate to the cryptocurrency market. On May 22nd, he opened a cryptocurrency donation website, officially accepting cryptocurrency donations. On May 26th, he made a public statement saying, “We will ensure that the future of cryptocurrency and Bitcoin is created in the USA… and will support the self-custody rights of 50 million cryptocurrency holders across the United States.” He also promised to pardon the founder of Silk Road if elected, and expressed his support for cryptocurrency while protesting against Biden’s actions to suppress the industry. On May 30th, according to The Wall Street Journal, Donald Trump is considering appointing Elon Musk as a policy advisor to promote support for cryptocurrency.
Influenced by his statements, tokens like $MAGA and $TRUMP have skyrocketed, surpassing 99% of tokens in the cryptocurrency market and becoming popular stars on the LBank platform for the past two weeks.
According to data monitoring platform Arkham, Trump’s cryptocurrency holdings have significantly increased in value, currently exceeding $12 million, which includes 579,290 TRUMP tokens worth $8.08 million, 464,706 ETH tokens worth $1.76 million, 374,889 WETH tokens worth $1.42 million, and other meme coins like MVP, CONANA, and BABYTRUMP.
From “not liking Bitcoin and other cryptocurrencies” five years ago, even calling it a “scam,” to now “supporting, affirming, and ensuring that cryptocurrency happens in the USA,” there is no denying that there has been a significant change in his stance. As expected, a poll on May 28th showed an increase in Trump’s support due to his pro-cryptocurrency stance on platforms like Polymarket.
Next is the current President, Biden, who has been influenced by Trump’s statements and has made some efforts to appeal to more Gen Z voters. On May 22nd, the Biden team was recruiting a “meme manager” to manage internet content and memes, including memes related to cryptocurrency. On May 23rd, the Biden administration issued a statement calling for cooperation in creating a “comprehensive and balanced regulatory framework for digital assets” in Congress. On May 29th, Biden sent a presidential delegation to attend the inauguration of the President of El Salvador.
At the same time, insiders revealed that Biden’s re-election campaign has started reaching out to key figures in the cryptocurrency industry for guidance on the development of the “cryptocurrency community and cryptocurrency policies.” This marks a significant “shift” from the government’s previous lukewarm attitude towards the industry.
Cryptocurrency Game Theory: Consensus2024 Reveals Market Signals
At the Consensus2024 conference, ARK Invest CEO and CIO Cathie Wood, also known as the “Stock Market Queen,” stated that the approval of the Ethereum spot ETF was due to cryptocurrency becoming an election issue.
In an interview, she said, “At the time, the interpretation was that it would not be approved, absolutely not. If it had been approved conventionally, we would have received inquiries from the US SEC. But before that, no one received such inquiries.” Wood also mentioned that the sentiment around the “Financial Innovation and Technology Act of the 21st Century” (FIT21) in the House of Representatives has been constantly changing. The bill was passed with bipartisan support last week, indicating that it could be an issue in an election year.
During the conference, Brian Nelson, Deputy Secretary of the US Treasury and head of the Office of Terrorism and Financial Intelligence, also stated that the proposal made by FinCEN in 2023 to require cryptocurrency companies to report transactions involving mixers is aimed at increasing transparency, not banning mixers. Nelson expressed empathy for cryptocurrency users’ desire for financial privacy but suggested that the industry and the Treasury Department work together to find ways to enhance privacy while avoiding terrorist financing.
Lynn Martin, President of the New York Stock Exchange, and Tom Farley, CEO of Bullish, also discussed cryptocurrency regulation, changes in US politics, and the limitations and opportunities of blockchain technology in improving traditional markets. Farley emphasized the sudden shift in the US political attitude towards cryptocurrency, including the removal of the anti-cryptocurrency chair of the Federal Deposit Insurance Corporation (FDIC), the passage of the “Financial Innovation and Technology Act of the 21st Century” (FIT21) bill in the House of Representatives, and the increased support for cryptocurrency by Republican presidential candidate Donald Trump in a series of rapid events.
“Whether it’s Trump, Biden, or Michelle Obama (who will become President), you will see progress in 2024 and 2025,” he added.
Previously, on May 28th, former CFTC Chairman Christopher Giancarlo stated in an interview with Forbes that the dam resisting cryptocurrency innovation in the US is about to collapse, and cryptocurrency will eventually return as the king in the US.
Funds Flow and Politics: BTC ETF Data and Voters
According to sosovalue data, as of May 29th, the total net asset value of Bitcoin spot ETFs was $57.683 billion, with an ETF net asset ratio (market value as a percentage of total Bitcoin market value) of 4.34%. The historical cumulative net inflow has reached $13.76 billion, with a continuous net inflow for 12 days.
On May 28th, Grayscale Investments®, the world’s largest cryptocurrency asset management company, announced the second phase of its national survey “2024 Election: The Role of Cryptocurrency.” The survey found that two-fifths of potential voters (41%) are paying attention to Bitcoin and other cryptocurrencies due to geopolitical tensions, inflation, and a weak US dollar. This statistic is higher than the 34% reported in the first phase of the Harris Poll conducted by Harris Poll since November 2023.
Similarly, more and more voters are expressing their expectation that their investment portfolios will include cryptocurrencies. In 2023, 47% of voters expected cryptocurrency to be included in their portfolios, compared to 40% in 2023. Grayscale’s research director, Pandl, stated, “Consistent with recent votes in the House and Senate, this data further indicates that cryptocurrency has become an issue of common concern for both parties, and neither side can ignore it.”
The increased interest can be attributed to the successful launch of the Bitcoin spot ETF in the US in January, which has already absorbed a net flow of $13.7 billion. Grayscale stated that after the ETF was approved by regulatory authorities, one-third of voters became more interested in cryptocurrency as an asset class.
Looking ahead and Risk Reminders
The US is currently at a critical moment, with many important decisions to be made regarding macroeconomic policy issues such as government interest rate hikes, inflation, and the positioning of the US on the international stage. With the increasing interest of the public in cryptocurrency, the government’s attitude towards this emerging digital asset is closely watched.
As the US elections approach, Trump and Biden have engaged in fierce debates on the controversial issue of cryptocurrency to attract voters and financial support. This not only shows the ambiguous stance of US political parties towards cryptocurrency but also indicates the future direction of regulation and more rational risk management.
At the same time, as the elections approach, frequent law enforcement activities have created a sense of conspiracy in the market, and the SEC seems to have shown signs of taking sides. LBank reminds users to understand the inherent volatility of the cryptocurrency market and to invest with caution and an informed perspective, avoiding blindly following speculations or social media trends.
