Author: Cycle Capital
Since the start of the US election, there has been a series of election-related meme tokens. Especially with TRUMP as the main representative, the market value reached a peak of $775 million after the Trump campaign openly supported cryptocurrency donations. Due to Biden’s more conservative stance on crypto, tokens related to him have received relatively less attention in the market. Following the conviction of Trump-related tokens in the hush money case, prices fell, while Biden-related meme tokens saw an increase. During the election, who becomes the US president and their public statements on crypto attitudes influence the prices of related tokens.
Candidate’s Attitude Towards Cryptocurrency
Trump
Trump has changed his previously negative stance on crypto during this election, releasing a series of crypto-friendly statements including “ensuring the future of the crypto industry and Bitcoin in the US, protecting the wallet self-custody rights of 50 million crypto holders nationwide,” and promising to pardon the founder of Silk Road if elected.
His shift in crypto attitude is not without precedent. In late 2022, Trump announced the release of limited edition Trump digital trading cards NFT on truth social, and in 2023, released “Win Trump Prizes” NFT on Polygon, offering benefits like dinner with Trump, autographed memorabilia, and 1-on-1 meetings.
In May 2024, Trump’s campaign team officially accepted crypto donations as campaign funds, solidifying a crypto-friendly attitude.
Biden
Biden’s latest stance on crypto is reflected in his veto of overturning SEC SAB 121 proposal. SAB 121 requires companies holding crypto assets to record customer-held crypto as liabilities on their balance sheet. Biden vetoed the proposal citing it would weaken the SEC’s power in accounting affairs and that his government would not support measures that harm consumers’ welfare.
Therefore, compared to Trump, Biden’s attitude towards cryptocurrency is more conservative. The next opportunity for Biden to make a statement on crypto will be the FIT 21 bill, which provides a regulatory framework for digital assets, assigning the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) jurisdiction over digital assets based on whether they are “functional,” “non-functional,” or “decentralized.” The bill has passed the House and still needs to be voted on by the Senate and signed by the President to become law.
SEC’s Cryptocurrency Regulatory Attitude
During Trump’s tenure from 2016 to 2020, with Jay Clayton as SEC chairman, the SEC took a cautious stance on crypto, primarily targeting fraudulent ICO activities and crypto exchange platforms. Cases included actions against Block.one, Ripple Labs, and Telegram (for Ton), with more cases against individuals or companies for illegal token issuance.
Biden appointed Gary Gensler as SEC chairman in April 2021. Gensler has identified as a “moderate minimalist” in Bitcoin, and while his appointment was seen as favorable for crypto development, both Gensler and Clayton hold cautious attitudes towards non-Bitcoin cryptocurrencies, believing that “all tokens are securities.” This stance seemed to soften on June 5, 2024, but without a clear crypto-friendly position. During Gensler’s tenure, the SEC has seen more crypto cases than during Clayton’s term, with a significant increase in cases against exchanges like Poloniex, Coinbase, Bittrex, Binance, and Kraken. Based on the number and targets of crypto-related lawsuits filed by the SEC, Biden’s administration has shown a more conservative attitude towards crypto.
Note: From June 6, 2023, to December 31, 2023, there were 14 crypto-related cases filed by the SEC, while from January 1, 2024, to June 10, 2024, there were a total of 6 crypto-related cases.
Election Process
Key Election Timeline
July 15-18: Republican National Convention decides the Republican candidate and platform. Trump had already secured the Republican nomination earlier.
August 19-22: Democratic National Convention decides the Democratic candidate and platform. Biden was confirmed as the candidate.
June 27, September 10: Biden and Trump debate, potentially influencing the final election results.
November 5: Election day.
Key Event: Impact of Hush Money Case
Trump was found guilty on all 34 charges in the hush money criminal case. The judge is set to sentence on July 11, which could potentially include imprisonment and significant fines. Trump plans to appeal the verdict in the hush money case. Even if convicted in the hush money case, it does not legally prevent Trump from continuing to run for US president.
An Ipsos and ABC News survey in April showed that if Trump were convicted, 16% of his supporters would reconsider their votes. According to racetotheWH tracking recent polling data, there are currently 8.8% undecided votes, with Trump leading in support. If Trump is convicted, undecided votes could increase to 17%, with Biden’s support surpassing Trump’s.
The conviction in the hush money case has actually boosted donations to Trump. In April, fundraising amounted to around $76 million, exceeding Biden’s $51 million. In the disclosure from Trump’s team in May, they raised over $400 million, mainly from small donations averaging around $70. Specific amounts will be disclosed by the end of June. It is worth noting that Trump’s campaign funds were also significant in the early stages of the 2020 election, but Biden’s team had a stronger financial position later on. While hefty campaign funds can bring advantages, they do not guarantee the final election outcome.
Importance of Cryptocurrency in the Election (Is there a condition for repeated speculation?)
On March 14, a survey by Paradigm showed that 19% of registered US voters own cryptocurrency, concluding that “one-fifth of the country is not a niche group.” Crypto holders are willing to switch parties.
Battleground states are crucial in the election. According to polls, this year’s key battleground states are Arizona, Georgia, Michigan, Pennsylvania, and Wisconsin, with potential battleground states including Nevada, North Carolina, and Minnesota.
Based on a DGC survey in May regarding Michigan, Nevada, Ohio, Montana, Pennsylvania, and Arizona, 26% of respondents stated they are concerned about candidates’ stance on cryptocurrency, with 21% saying crypto is an important issue to consider during the election. 55% are worried that policymakers may stifle innovation through excessive regulation, hence the need for the next president to be crypto-friendly.
According to a CBS News poll released on April 29, voters in the three major Rust Belt swing states (Pennsylvania, Ohio, and Michigan) are most concerned about economic issues, particularly growth and inflation. Since Biden took office in the first quarter of 2021, the US GDP has grown by over 8% after adjusting for inflation, but economic growth in the three “swing states” lags far behind the national average, especially Wisconsin, where GDP has only grown by 3.1% over almost four years.
To win swing state votes, economic issues remain central, but candidates may revisit the cryptocurrency issue to appeal to younger voters.
US Election Theme Related Meme Tokens
Meme tokens related to election themes experience significant price fluctuations, posing more risks, including but not limited to: candidate’s changing crypto attitudes and campaign slogan shifts, low likelihood of token listing on exchanges. This content is for reference only and does not constitute investment advice.
