In the previous article, I shared my views on the impact of Trump's election on the entire cryptocurrency ecosystem.
During the online exchange on Saturday, a reader asked a similar question, and at the time, I supplemented two points from the perspective of cryptocurrency projects on the potential impact of Trump's election.
This impact may lead to a clear differentiation in the financing and operation methods of projects of different sizes in the future.
If Trump really fulfills his pre-election promises to the cryptocurrency ecosystem, then in terms of the overall policy direction, the cryptocurrency ecosystem and the enterprises (projects) within it will face a much more relaxed environment than now, which means that the following two aspects of activities will become increasingly active:
The first is that the traditional financial industry will become more and more accepting of cryptocurrency enterprises, and even more capital will seek opportunities in the cryptocurrency ecosystem. This will mainly affect the large-scale projects within the ecosystem, especially those infrastructure or underlying application projects.
The second is that the enterprises or project parties already in the cryptocurrency ecosystem will have more motivation and enthusiasm to take some bold, exploratory actions, such as issuing tokens. This will mainly affect the small and medium-sized projects within the ecosystem, especially some innovative application projects.
Let's look at the first point.
In recent years, the traditional financial industry in the United States has become increasingly accepting of the cryptocurrency ecosystem, led by large institutions (such as BlackRock).
This acceptance not only means that they have undergone a 180-degree change in their values towards cryptocurrency assets, but also reveals their consideration of real interests - they do not want to miss out on the potential financial benefits that may arise from the growth of cryptocurrency enterprises and assets.
In the past, they were constrained by the attitude of the US Securities and Exchange Commission, and could only take small steps, advancing and retreating. Now, with a president and vice president who are openly supportive of the cryptocurrency ecosystem (we should not forget that Pence had worked in the venture capital industry before running for office and was close to the Silicon Valley elite, and he even included Bitcoin in his personal asset allocation; not to mention that Trump himself has issued several rounds of Non-Fungible Tokens and is also operating a new cryptocurrency project), how can these institutions miss such an opportunity?
Recently, an interesting phenomenon has appeared in my circle of friends, with people frequently sharing news about two cryptocurrency enterprises preparing for IPOs:
One is Circle (the parent company of USDC), and the other is Kraken.
At the end of the news sharing, the sharers have added a note: Friends who are interested in participating in the private placement, please contact me privately, as the shares are limited and need to be grabbed quickly.
In addition to these two companies, the well-known market maker Wintermute in the ecosystem is also frequently rumored to be preparing for an IPO, and it is said that a major domestic Internet company has participated in Wintermute's financing.
These large project parties are releasing news about their IPOs at this time, and I believe this is not a coincidence, but an inevitable phenomenon at the current stage of ecosystem development.
I think there are three main reasons for this:
First, as the cryptocurrency ecosystem has developed to the present stage, a considerable number of large-scale projects can no longer solve their problems through the once niche ICO financing method. They need larger capital volumes, and only traditional finance can meet their funding needs.
Secondly, the method of issuing tokens to solve the problem of investors' exit in the past few years seems to be not very friendly to private placement investors, as the lock-up restrictions and insufficient liquidity have greatly limited their profit-taking and exit. As the ecosystem has developed, even retail investors are no longer willing to play with them, preferring to play with meme coins rather than capital coins. So these investors must find other ways to cash out and exit.
Furthermore, due to various restrictions in the past, the barriers for native cryptocurrency enterprises to go public were very high. After all these years, apart from mining companies and MicroStrategy, the only truly native cryptocurrency enterprise that has gone public on the US stock market is Coinbase. Even Coinbase, the lone survivor, has been constantly harassed and questioned by the US Securities and Exchange Commission since its listing.
The first two reasons will make the traditional financial market an increasingly important channel for solving the problems of both parties, but this channel is ruthlessly blocked by the third reason.
Now, with Trump about to take office, the obstacle that has stood between the two parties is very likely to be removed.
Therefore, in the foreseeable future, more and more cryptocurrency enterprises or projects that have high capital requirements, especially those that need a large amount of capital investment in research and operations, are likely to choose the IPO route - this not only facilitates these enterprises to raise large amounts of funding, but also allows traditional financial institutions to quickly and efficiently acquire interests in the cryptocurrency ecosystem.
In the future, the relationship between these enterprises and us retail investors will become increasingly distant. Because taking this path means that the probability of these projects issuing tokens will become smaller and smaller, and even if they do, it will be a drop in the bucket. Although they are dressed in the garb of cryptocurrency, they are more like traditional enterprises.
But on the other hand, with the relaxation of the cryptocurrency environment, I believe that the possibility of more small and medium-sized projects, especially innovative projects, issuing tokens will become greater and greater - issuing tokens is an efficient means for small projects to quickly start up.
This is the second point I mentioned above: "The enterprises or project parties already in the cryptocurrency ecosystem will have more motivation and enthusiasm to take some bold, exploratory actions, such as issuing tokens".
Recently, Polymarket, which has been in the spotlight in this election, has been rumored to be planning to issue tokens.
I think this is the project party betting on the upcoming relaxation of the cryptocurrency industry. There will be more such opportunities in the future, but they will be mainly limited to some small innovations and small applications.
Because at the initial stage, they do not need large capital and large investment, what they need is popularity and participation. Airdrops and token issuance expectations are the best incentives.
Therefore, we retail investors can pay appropriate attention to some active and emerging small applications, and seek some opportunities that belong to us.
However, I still advise everyone that when participating in these small applications, you must consider your own time, energy and financial resources, and act within your means, and do not bet everything on one card.
The era of betting everything on any project airdrop or even setting up a studio specifically for this purpose is gone forever.
