Riding the Red Wave: Where Does Crypto Go From Here?

For the third time in my lifetime, Crypto is legal in the US. This time however, it’s likely to stick. A Republican red wave sweeping Congress, the presidency, alongside a firmly conservative Supreme Court makes crypto-friendly policies in Trump’s first year almost a sure bet: about time, given clear signs of the industry’s maturation.

While crypto-powered prediction-market app Polymarket held the attention of many that night, Bitcoin's sharp upward movements offered early signals to crypto investors that the tide was turning in Trump’s favor. The election results were groundbreaking, but it’s essential to recognize the diverse coalition that rallied behind Trump. Crypto-focused voters clearly played a key role. Miami-Dade County, a crypto-native hub, flipped overwhelmingly for Trump, a significant shift given its largely minority demographic and Blue voting record since 1988. Elsewhere, upstarts like Bernie Moreno displaced long-term Senator Sherrod Brown, one of the key instigators of Operation Chokepoint 2.0, the democrat-led effort to kill crypto through cutting off it’s access to the banking system.

Crypto is here to stay, and under Trump, it may thrive like never before. But the election also highlighted some changes in user behavior and messaging that we expect to stick. As such, we have three key predictions for crypto coming out of the election.

Futarchy Rises:

The simple implication of Polymarket’s success is the end of polls, but Futarchy entrenches the social behavior Polymarket pioneered. Futarchy is an idea for governance where people "bet" on which policies will achieve a common goal, like happiness or economic growth, using prediction markets. Instead of voting on ideas directly, people make predictions about what will work best, and those with the strongest predictions get implemented. One of America’s many superpowers have always been its fascination with markets, and Polymarket’s behavior-altering role in this election will open the door to other experiments with using prediction markets to drive or inform decisions. One project that we’ve spent months watching is MetaDao, which is already experimenting with involving futarchy in every-day decisinos.

ICOs Return:

If you had told me the sitting presidential nominee would be running a $300m ICO in the MIDDLE of his re-election campaign, I would have told you to take a hike. But alas, here we are. While World Liberty Financial didn’t hit its fundraising targets, the fact that it even happened implies ICOs may once again be in vogue. One thing most crypto participants agree on is that the current token launch structure is extractive and opaque, and that ICOs may bring transparency back to this market. Many of the industry’s leading figures have advocated for the return of ICOs for years, and given Trump’s successful (if underwhelming) launch of $WLFI, it seems increasingly likely they will get their wish.

Utility Rules:

One surprising byproduct of the last four years of haphazard, thoughtless policy on the part of regulators has been the proliferation of scams driven by memecoins, and celebrity promotions. With no regulatory framework to launch real projects that create useful things in the world, the most legally-clear use of crypto was to launch memecoins: crypto tokens with no utility tied to some attention generating asset or event. Chris Dixon, GP at a16z Crypto recently went as far as to call this regulatory failing out in the Financial Times. With the return of sanity, we would expect utility tokens that fulfill a real, productive function to once again thrive. Vice-President-Elect JD Vance has previously shown strong facility with the difference between Utility and Non-Utility tokens, a night and day change from the eyes-wide-shut approach of federal regulators today. Rather than penalizing technological innovation that solves real problems, we predict this administration will buttress it, and potentially even drive it’s growth. DePIN will be directly downstream to this shift.

Over the past forty years, technology has reshaped society, accelerating communication and financialization. These changes demand a rethink of governance. Western society has long been led by those who preserve the status quo, but as the internet dismantles traditional structures and empowers new voices, it’s time for leaders who can embrace both creation and destruction to reform our systems.

Crypto remains the frontier for investing in social transformation, and we’re more confident than ever that DePIN will drive mainstream adoption. While Trump’s approach may be divisive, his focus on “creative destruction” aligns with the spirit of progress that has always propelled the United States forward. While we’re deep skeptics of aggressive political rhetoric, to use Trump’s own words, this may indeed be the dawn of a new golden age.