An in-depth look at how the US election could impact various crypto asset types.
Written by: Sylvia, Cage, Nora, Riffi, Mat, Darl
In the previous report, we explored the potential impact of Trump's re-election in the 2024 US presidential election on the cryptocurrency market. This article aims to further analyze the specific impact of Trump's change of attitude on the market, and explore the specific opportunities and risks of the market in combination with Kamala Harris as a major competitor. In this report, we will take a deep dive into how the upcoming US election will affect multiple types of crypto assets (such as crypto concept stocks, SEC -related tokens,NFTs , and Meme coins). The report provides a detailed analysis of current market performance, investment potential, and related risks, aiming to help investors find potential opportunities in turbulent markets.
Crypto concept stocks
First, let’s focus on the situation in traditional financial markets.
1. Mining: The American Dream of Crypto
After the Chinese mines were cleared, the United States took up the vast majority of Bitcoin computing power. The United States has now become a paradise for Bitcoin miners.
In June this year, Trump wrote that Bitcoin mining may be the last line of defense against CBDC. He hopes that all remaining Bitcoins will be made in the United States, which will help the United States gain energy dominance.
The phrase "MADE IN THE USA" is more than just a slogan. Trump personally met with several Bitcoin mining tycoons at his Mar-a-Lago estate. According to Matthew Schultz, executive chairman of Bitcoin mining company CleanSpark Inc., Trump told the attendees that he likes and understands cryptocurrencies, adding that Bitcoin miners help stabilize the energy supply of the power grid. Schultz also said that Trump said he would cheer for the miners in the White House.
Mining company stock market performance (Source: @Wolfdao)
In this world of "mining", CleanSpark and Core Scientific are the stars of everyone's attention. Both the market value and growth of these two companies have soared like rockets. Riot Platforms, on the other hand, seems to be a little inferior and may need to regain its former spark.
2. Coinbase and MicroStrategy : Pioneers in the crypto world
When it comes to crypto investment, how can we miss these two big names? Coinbase and MicroStrategy have almost become synonymous with the crypto business world.
MSTR & COINBASE stock market performance (Source:@Wolfdao)
MicroStrategy (MSTR)
MSTR market value performance and BTC linkage (Source: Tradingview)
MicroStrategy was originally seen as a slow-growing enterprise software company. But over the past four years, MicroStrategy has begun buying large amounts of Bitcoin.
As of June 24, 2024, MicroStrategy owns 226,331 bitcoins. MicroStrategy stated that the average purchase price per bitcoin was $35,158.00, with a total cost of $7.538 billion.
MSTR's market performance in the past four years has been better than BTC, and it is highly correlated with the rise and fall of BTC. To some extent, MSTR is an amplifier of BTC's yield rate. It rises more in a bull market and falls more in a bear market.
Coinbase (COIN)
Coinbase market value performance and BTC linkage (Source: Tradingview)
Coinbase, a US-based cryptocurrency exchange, has seen its share price rise 168% to $265 over the past year, slightly outperforming Bitcoin. However, it is still some distance away from its previous high of $429.54. Trump expressed his hope that more crypto businesses would be led by the United States, suggesting that pressure on foreign crypto companies may be intensified in the future, which undoubtedly gives the well-established Coinbase a chance to occupy the market.
Crypto projects (SEC related)
On July 22 this year, Bitcoin Magazine reported that after Biden withdrew from the presidential election, Gray Gensler, the current chairman of the U.S. Securities and Exchange Commission (SEC), may resign in early 2025. As soon as this news came out, the market was immediately stirred up. Nate Geraci, president of The ETF Store, quoted the analysis of CNBC political and financial reporters on the X platform, pointing out that if Trump is elected as the president of the United States, the new SEC chairman may be Dan Gallagher, the chief legal officer of Robinhood and former SEC commissioner.
Gensler has always been regarded as one of the top enemies of the crypto market. The strict supervision of the SEC under his leadership and the SEC's tight grip have always been important factors in suppressing the prices of many tokens. However, if the new chairman is more friendly, the crypto market will usher in a brighter "policy spring".
1. Possible stress relief projects
XRP (Ripple) : Ripple’s legal battle with the SEC is protracted. There are multiple lawsuits between the two, and every step will blow the market volatility.
Solana (SOL) : SOL was previously defined as a security by the SEC (securities will face more severe regulation than cryptocurrencies and will be directly regulated by SEC laws rather than CFTC regulations). SOL's ETF has also been submitted and is currently under review. If the new chairman has an open policy attitude, the probability of SOL being approved will greatly increase.
2. List of tokens recognized by the SEC as securities
A total of 19 projects have been identified as securities by the SEC:
List of tokens recognized by the SEC as securities (Source: @Wolfdao)
The performance of these tokens in recent years is like a prism, reflecting the colorful and helpless market under the heavy pressure of the SEC. Their prices have been suppressed to a greater or lesser extent by the SEC’s securities certification. If the certification can be cancelled in the future, it will be a great positive, and it may be a signal for the start of a new round of bull market.
NFT issuance and sales: TRUMP series NFT
According to Foresight News , former US President Donald Trump plans to launch his fourth NFT series. In an interview, Trump called his previous series "very successful" and sold out in one day.
Previously released NFT projects:
1. Trump Digital Trading Cards Trump Superhero Series Cards
Source: OpenSea
Quick View: https://opensea.io/collection/trump-digital-trading-cards?tab=items
At present, the average transaction price of this series of NFTs in the market is about 0.1 ETH. Although it was quiet for a while, when Trump announced a new round of NFT plans, the series immediately set off a trading boom, with a strong hot spot correlation driving force.
2. Superhero Series 2
The price of this series is about 60USDT, but its liquidity and upside potential are not as good as the first phase.
Quick View: https://opensea.io/collection/trump-digital-trading-cards-series-2
3. Trump Digital Trading Cards Series 2 1-of-1 Bonus Collection Gold Card
As a special edition, this gold card series is rare and expensive, but there has been no transaction volume in the past few months. This leads to two directions of thinking:
Lacking popularity and market, people prefer the first edition NFT of the prince's status
There is a price but no market. Holders are optimistic about its long-term value and will wait for the right opportunity to enter the market.
Overall, Trump Digital Trading Cards is a relatively good choice for investing in NFT. Historical data shows that whenever there is a new hot event about Trump, the trading volume of NFTs in this series will rise accordingly. However, the current NFT market is performing poorly overall, and its liquidity is far less than that of cryptocurrencies. If investors fail in this field, they may face large losses. Therefore, we recommend that you carefully assess your risk tolerance before investing and reasonably allocate your investment ratio to avoid falling into the dilemma of "not knowing which will fail first, Trump's market or NFT".
Meme Track Hot
The meme coin sector is the investment area most closely related to the US election. There are many types of such tokens, and this article only lists a few of the more influential meme coins.
Celebrity Meme Tokens
US election celebrity meme tokens (Source:@Wolfdao)
These tokens are particularly closely associated with specific people. For example, the price trends of MAGA TRUMP and JEO BODEN are closely linked to the behavior and news trends of their corresponding public figures. Such meme coins are more volatile due to the personality factors and are prone to short-term sharp fluctuations driven by events.
Election Event Meme Token
Meme tokens for popular events in the US election (Source: @Wolfdao)
The price trend of event memes is usually driven by major events and is highly speculative and uncertain. For example:
PEOPLE and MAGA Hat : These tokens often experience explosive growth after major political or social events, and can be seen to be controlled by powerful market makers behind the scenes.
FIGHT and Fear not : Once the assassination conspiracy theory related to Trump was released, these tokens quickly became popular in the market. However, the current trend is relatively weak, and the subsequent market needs to be observed.
Overall, although the Meme coin sector claims to be closely related to the entire election, in fact, these coins are largely concentrated around Trump personally. Market hot spots show that Meme coins that continue to focus on Trump and related events, such as MAGA TRUMP and MAGA Hat, have a greater chance of riding on Trump's traffic in the future and may see a larger increase.
Invest with caution. When participating in these highly volatile Meme coins, short-term operations with small positions may be a more sensible choice.
Potential Risk Warning
From the lessons learned from the long history, everyone has reached a consensus: campaign slogans and actual policy measures are often not necessarily consistent. Take the current SEC Chairman Gary Gensler as an example. Before taking office, he was regarded as a supporter of cryptocurrency because he taught blockchain courses at MIT, and was once regarded as a crypto-friendly official. However, after joining the SEC, especially after the FTX incident, Gensler quickly changed his strategy and resolutely promoted stricter regulatory measures.
Donald Trump's Election Comments 2024.7.22 (Source: PolitiFact)
According to data from the neutral media PolitiFact, the authenticity of Trump's remarks is less than 30% overall. At the same time, Trump has made it clear in the past that he is not friendly to cryptocurrencies, and even publicly declared Bitcoin a "scam" and called for stricter regulation. What is more noteworthy is that cryptocurrency is only a very low-profile issue in Trump's campaign promises, which means that even if he wins the election, he may not necessarily implement his campaign promises. This policy uncertainty is undoubtedly a major risk factor that investors must pay attention to.
Summarize
Looking at the current crypto market, especially on the eve of the upcoming US election, market sentiment and policy trends are undoubtedly important factors affecting investment decisions. There is still some time before the election, and the second half of the year is a period of interest rate cuts. Coupled with Trump and his running mate's friendly attitude towards cryptocurrencies, this concept sector will still have relatively large hype expectations.
Since the beginning of this year, with the changes in US policies on Bitcoin mining and cryptocurrency regulation, coupled with Trump's frequent statements, the volatility of various related assets has increased significantly. It is important to emphasize that investors must remain calm and rational in the complex market. In particular, we must be wary of politicians' possible inconsistency between words and deeds and sudden policy changes. As history has shown, there is often a gap between campaign promises and actual governance, and this uncertainty is a risk that market participants must face up to.
In short, although the crypto market is full of opportunities, investors should carefully assess their own risk tolerance and make prudent decisions in order to move forward steadily in this volatile market.
