The cryptocurrency market has exploded since Donald Trump's victory in the 2024 US presidential election, as many believe his victory will have a significant impact on this industry. TinTucBitcoin Research recently released a report by HTX Ventures analyzing the factors contributing to the role of Bitcoin and cryptocurrencies in the election. The report also examines how presidential elections can affect future policies, shape market expectations, and potentially impact cryptocurrency companies in the coming years.
How Cryptocurrencies Became a Key Issue in This Election Cycle
The popularity of cryptocurrencies in the US has been increasing each year. This year has witnessed the most notable events in the history of cryptocurrencies, making it one of the main topics of the election cycle. Several important issues have brought cryptocurrencies to the forefront of debates and election campaigns.
First, the macroeconomic picture shows some disappointing indicators. The current US fiscal policy could lead to an ever-increasing federal budget deficit, further increasing the US federal debt. Budget deficits and debt burdens risk disrupting financial markets. There are few options to address this massive debt, and debt monetization through inflation may be the only way the US government can escape this situation.
Bitcoin (BTC) is considered an effective tool to protect against inflation, especially for the increasingly burdened working class. As a decentralized and scarce asset, it has strategic potential in the context of debt pressure and inflation.
Stablecoin has become another reason for the increasing popularity of cryptocurrencies. Although stablecoins have only been around for 10 years, they are one of the 20 largest holders of US Treasury securities, surpassing even some countries like Germany. This shows that stablecoins have become an indispensable part of the US financial system by absorbing a large amount of Treasury securities, providing additional liquidity support for the economy.
Voter interest in cryptocurrencies is also growing. A national survey conducted by The Harris Poll on behalf of Grayscale found that more than half of voters are more likely to vote for a candidate "knowledgeable about cryptocurrencies" than one without this understanding.
At the same time, interest in cryptocurrencies has surged among voters in swing states. Since the 2020 election, two key swing states expected to see fierce competition, Pennsylvania and Wisconsin, have jumped to the 4th and 5th positions in terms of Google search interest in cryptocurrencies.
The Impact of the Election on Cryptocurrencies
In his campaign, Trump has expressed strong interest in the digital asset industry, declaring his intention to make the US the "cryptocurrency capital of the planet and the world's Bitcoin superpower." He supports Bitcoin mining and pledges to protect self-custody rights. During his campaign, Trump even bought hamburgers for guests using Bitcoin. He also criticized the Securities and Exchange Commission's tough approach to cryptocurrencies, promising to appoint a pro-cryptocurrency chairman if re-elected.
Trump has proposed a range of cryptocurrency policies, including establishing a Strategic Bitcoin Reserve, setting up a Presidential Cryptocurrency Advisory Council, and banning the Federal Reserve from issuing a digital currency. Read more about these proposals in the full report.
While optimistic promises have been made during the election campaign, their implementation may take years or be canceled due to the high cost of implementation. However, we can see that the election has impacted the cryptocurrency market.
The prediction markets have become one of the biggest beneficiaries of the election. Polymarket, a leading company in this field, has captured 80% of the volume from bets on the presidential election. As an on-chain-native application, Polymarket competes in traditional markets and holds the largest market share, which is extremely rare.
Polymarket has established an initial stable user base by providing a user-friendly market and a socially beneficial strategy without ethical controversies. This has helped it gain widespread acceptance. Furthermore, Polymarket's data has been widely used by mainstream media, and Bloomberg Terminal even started integrating Polymarket data into its dashboard in August. Other Web3 protocols have seen Polymarket's success and launched their own betting tools.
In addition to prediction markets, DeFi (DeFi) has the potential to enter the mainstream financial market due to favorable changes in the external environment. BTCFi, a prominent DeFi player, is easy to build consensus and achieve legitimacy, providing it with a solid foundation and ensuring its sustainable development. After Trump's victory, cryptocurrency companies developing BTC-based financial instruments will be encouraged and have access to a more accommodating regulatory environment, strengthening BTC's position as a foundational asset.
Another promising change is that under the Trump administration, a clear legal framework and a more favorable environment will reverse the current trend of cryptocurrency companies fleeing the US and blocking US IP addresses. Meanwhile, according to Bloomberg, several cryptocurrency-related companies, including Circle Internet Financial, Kraken, Fireblocks, Chainalysis, and eToro, may go public in the next few years, and other qualified cryptocurrency companies are also expected to pursue standard IPO processes.
