With the approval of the BTCETF earlier this year and the upcoming US election, the influence of cryptocurrency on US politics is gradually becoming more significant. Recently, with a series of actions by Donald Trump, cryptocurrency, despite being a new and controversial field, is now becoming an important factor in gaining votes and financial support in US political elections.
Today, LBank will take stock of the attitude of the US political circle towards cryptocurrencies and further predict the future trends of the cryptocurrency market.
Crazy Candidates, Cryptocurrency, and Votes
In 2024, the US presidential election will be a crucial moment for the candidates. They do not want to miss out on the new power brought by cryptocurrencies. However, they also want to keep a serious distance by using various economic sanctions through the SEC. Compared to Singapore’s early adoption, the relationship between the US political circle and cryptocurrencies is more like a period of ambiguity. It is neither announced nor hidden, but rather immersed in this seemingly mysterious and unacknowledged tug-of-war.
First, let’s talk about the wildly controversial Trump, who quickly opened the gates of the cryptocurrency market through his statements and meme effects.
On May 22nd, he launched a cryptocurrency donation website and officially started accepting cryptocurrency donations.
On May 26th, he publicly stated, “We will ensure that the future of cryptocurrency and Bitcoin is made in the USA… We will support the self-custody rights of 50 million cryptocurrency holders across America.” He also promised to pardon the founder of Silk Road if elected, showing his support for cryptocurrency and 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 the agenda of supporting cryptocurrencies.
Influenced by his statements, tokens like $MAGA and $TRUMP have skyrocketed, surpassing 99% of tokens in the cryptocurrency market, and have become popular meme stars on the LBank platform for the past two weeks.
According to data from the monitoring platform Arkham, the value of Trump’s cryptocurrency assets has significantly increased and has now exceeded $12 million. This includes 579,290 TRUMP tokens worth $8.08 million, 464,706 ETH tokens worth $1.76 million, and 374,889 WETH tokens worth $1.42 million, as well as other meme coins like MVP, CONANA, and BABYTRUMP.
From five years ago, when he said he “didn’t like Bitcoin or other cryptocurrencies” and even called it a “scam,” to now saying he “supports, affirms, and ensures that cryptocurrency happens in the US,” there is no denying that his transformation is indeed in line with current events. As expected, a poll on May 28th showed an increase in Trump’s support due to his stance on the cryptocurrency industry on platforms like Polymarket.
Next is the current President, Joe Biden, who, influenced by Trump’s statements, has made some moves to appeal to more Generation Z voters.
On May 22nd, the Biden team was recruiting a “meme manager” to manage internet content and memes.
On May 23rd, the Biden administration issued a statement calling for cooperation in Congress on a “comprehensive and balanced regulatory framework for digital assets.”
On May 29th, Biden sent a presidential delegation to attend the inauguration ceremony 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 to seek guidance on the “forward development of the crypto community and crypto policies.” This marks a significant “shift” in the government’s previous cool attitude towards the industry.
Cryptocurrency Game Theory: Consensus2024 Reveals Market Signals
At the Consensus2024 conference, Cathie Wood, the CEO and Chief Investment Officer of ARK Invest (also known as the “stock goddess”), stated that the approval of the Ethereum spot ETF was due to cryptocurrency becoming an election issue.
In an interview, she said, “The interpretation at the time was that it would not be approved, absolutely not. If it had been approved in the usual way, 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 changing, and the bill gained bipartisan support last week, indicating that it may be an issue in an election year.
During the conference, Brian Nelson, the Deputy Secretary of the US Department of the Treasury and 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 was to increase transparency rather than ban mixers.
Nelson expressed sympathy for the desire of cryptocurrency users for financial privacy but suggested that the industry and the Treasury Department work together to find ways to enhance privacy while avoiding terrorist financing.
Additionally, Lynn Martin, the President of the New York Stock Exchange, and Tom Farley, the CEO of Bullish, discussed cryptocurrency regulation, changing US politics, and the limitations and opportunities for blockchain technology to improve traditional markets. Farley emphasized the sudden shift in the US political circle’s attitude towards cryptocurrency, including the removal of the anti-cryptocurrency chairman of the Federal Deposit Insurance Corporation (FDIC), the passage of the Financial Innovation and Technology Act of the 21st Century (FIT21) in the House of Representatives, and the increased support for cryptocurrency by 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, Christopher Giancarlo, the former chairman of the CFTC, also stated in an interview with Forbes that the dam blocking cryptocurrency innovation in the US is about to collapse, and cryptocurrency will eventually return to its reign in the US.
Funds Flow and Politics: BTCETF Data and Voters
According to sosovalue data, as of May 29th, the net asset value of the Bitcoin spot ETF was $57.683 billion, and the ETF net asset ratio (the ratio of market value to the total market value of Bitcoin) was 4.34%. The cumulative net inflow has reached $13.76 billion, and it has been in net inflow for 12 consecutive 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% from the first phase of the Harris Poll conducted by Harris Poll since November 2023.
Similarly, more and more voters are expressing that they expect their investment portfolios to include cryptocurrencies (47% in 2023 and 40% in 2024). Grayscale’s Director of Research, Pandl, stated, “Consistent with recent votes in the House and Senate, this data further demonstrates that cryptocurrency has become an issue of common concern for both parties, and neither can ignore it.”
This increased interest is mainly attributed to the successful launch of the Bitcoin spot ETF in the US in January, which has already attracted a net inflow of $13.7 billion. Grayscale stated that after the approval of the ETF by regulatory agencies, nearly one-third of voters have shown more interest in cryptocurrencies as an asset class.
Looking Ahead and Risk Reminder
The US is currently at a critical moment and needs to make many important decisions involving 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 cryptocurrencies, the government’s attitude towards this emerging digital asset is of great concern.
As the US election approaches, Trump and Biden have engaged in fierce debates on the controversial issue of cryptocurrencies in order to win voters and financial support. This not only shows the ambiguous attitude of US political parties towards cryptocurrencies but also indicates the future regulatory direction and more rational risk management.
At the same time, as the election approaches, frequent law enforcement activities have created a sense of conspiracy in the market, and the SEC seems to have taken a stance. LBank reminds users to understand the inherent volatility of the cryptocurrency market and to invest with caution and an informed perspective, avoiding blindly following hype or social media trends.
