1. Background
People's attention to Bitcoin is increasing due to macro developments and the maturity of Bitcoin as an asset. In the past six months, factors such as geopolitical tensions, inflationary pressures and US dollar risks have driven voters' attention to Bitcoin to continue to rise. In addition, inflation has become a top issue in this election, and assets like Bitcoin with a transparent supply mechanism and a hard cap may have potential value. Against the backdrop of growing economic uncertainty, these characteristics of Bitcoin seem to provide investors with an option to hedge risks.
The Harris Poll results released by the Grayscale team further confirm this trend. The survey shows that major events such as the approval of the US spot Bitcoin ETF in January 2024 and the Bitcoin halving in April 2024 have significantly increased voters’ interest in investing in Bitcoin and other crypto assets (18% and 20% respectively ). It is particularly worth mentioning that the approval of Bitcoin ETF has made 9% of retired voters more interested in investing in Bitcoin or crypto assets. This data is particularly eye-catching among the retirement group.
Therefore, compared with previous elections, the connection between this US election and cryptocurrency is closer. We can foresee that cryptocurrency policy is likely to become an important part of the candidates' campaign platforms, affecting voters' voting preferences. At the same time, this also means that the crypto industry may usher in more regulatory attention and policy debates. In this context, paying close attention to the candidates' attitudes and policy proposals on cryptocurrency is not only important for investors, but this election may become a key turning point for cryptocurrency to move from the margins to the center stage.
II. Overview of the U.S. presidential candidates
A. Harris Camp
On July 21, Biden withdrew from the race and supported Vice President Kamala Harris, who announced her candidacy for the Democratic presidential nomination. Kamala Harris, the current Vice President of the United States, officially announced her candidacy for the 2024 Democratic presidential nomination. As a descendant of Indian and Jamaican immigrants, if Harris successfully obtains the nomination, she will become the first black woman and Asian American to lead a major party campaign. Harris' political career has mainly developed in the Bay Area of California, and she has served as a U.S. Senator, California Attorney General, and San Francisco District Attorney. She became famous for her sharp prosecutorial questioning style in congressional hearings, especially in confrontations with Trump administration officials.
Image source: Getty Images
Harris, whose parents are immigrants from India and Jamaica, grew up in Oakland and has spent most of her political career in California's Bay Area.
Harris's first campaign speech provided some insight into her priorities, and like Biden, she intends to contrast her vision for America with that of Trump. She said the path forward will focus on lifting up working and middle-class Americans, enabling them to join unions, retire with dignity, no longer fear gun violence and have access to affordable health care.
1) Current cryptocurrency policy stance
While Harris’ Biden administration has been criticized by the industry for its perceived anti-cryptocurrency stance, recent developments suggest the Democratic camp may be adjusting its stance on cryptocurrencies:
Future Forward USA PAC, a major source of support for Harris, has partnered with Coinbase Commerce to accept cryptocurrency donations.
While Harris’ campaign is not currently accepting cryptocurrency donations directly, the move could suggest the Democratic Party is re-evaluating its cryptocurrency strategy.
The development may be a response to Republican opponent Donald Trump’s ascendancy among cryptocurrency supporters.
2) Potential policy changes
Based on the current situation, we can speculate that the Harris camp may have the following changes in cryptocurrency policy:
l Gradually open attitude: Considering the move of Future Forward USA PAC, Harris may take a more open stance on cryptocurrency policy to attract young voters and supporters of the technology industry.
Balanced Regulation: A balanced regulatory framework may be proposed that protects investor interests without stifling innovation. This may include clear cryptocurrency classification and taxation guidelines.
l International competitiveness: Given the global trend of cryptocurrency development, Harris may propose policies to ensure that the United States remains a leader in this field.
Environmental Concerns: Given the Democratic Party’s environmental stance, Harris may propose policies that encourage the use of more environmentally friendly cryptocurrency mining and trading technologies.
B. Trump Camp
Donald Trump's camp has once again become the focus in the 2024 US presidential election. As a former US president, Trump announced his candidacy in the 2024 presidential election in November 2022, trying to become the second president in US history to win two non-consecutive terms.
Trump's political career has been filled with controversy and drama. He continues to deny the results of the 2020 election and insists that the election was fraudulent, despite the lack of substantive evidence for these claims, which led to the Capitol incident on January 6, 2021. As the only president in U.S. history to be impeached twice by the House of Representatives, Trump faces multiple legal challenges. In May 2024, he was found guilty of all charges in a hush money criminal trial in New York, and is also facing charges in three other major cases involving the 2020 election and the handling of confidential documents.
Image source: CNN
Before entering politics, Trump was a successful businessman and media celebrity. He graduated from the University of Pennsylvania with a bachelor's degree in economics and subsequently achieved remarkable success in the real estate industry. As the host of the reality show "The Apprentice", he was already a household name before entering politics. This unique background adds a distinct personal touch to his political career.
Trump's policy proposals and campaign strategies continue to emphasize the idea of "making America great again." He promised that if re-elected, he would thoroughly reform the federal government, especially targeting what he called the "deep government." In terms of economic policy, Trump emphasized the achievements of his first term and promised to restore employment and promote economic growth. He also plans to cut social safety net programs, which may have a significant impact on the existing welfare system. In foreign policy, Trump advocates "America First" and may continue to adopt unilateralism and trade protectionism policies. The support base of Trump's camp mainly includes traditional conservatives, working-class voters, and voters who are dissatisfied with the establishment. This controversiality also consolidates the loyalty of his core supporters, allowing him to maintain a strong influence within the Republican Party.
Attitudes towards cryptocurrencies during past terms
Donald Trump has undergone a notable shift in cryptocurrency policy:
Early in his White House term: Trump was skeptical of cryptocurrencies, publicly expressing his "dislike" for cryptocurrencies in 2019, believing that they could facilitate illegal activity.
l Attitude change: Over time, Trump gradually changed his position and began to actively embrace cryptocurrencies.
l Campaign strategy: Trump incorporated cryptocurrency into his 2024 campaign strategy, announced that he would accept cryptocurrency donations, and promised to make the United States the "global cryptocurrency capital."
Business interests: The Trump family launched World Liberty Financial, a cryptocurrency trading platform, showing their business interests in this field.
Policy proposals: Trump has proposed a series of policy ideas to support cryptocurrencies, including: creating a "strategic reserve" of Bitcoin, promoting decentralized finance (DeFi), subsidizing Bitcoin mining to increase energy production, and opposing the creation of a central bank digital currency (CBDC).
3. Analysis of candidate-related tokens
1) Harris Token
Vice President Kamala Harris's meme token Kamala Harris Token (KAMA) also performed well. Launched in August 2023, KAMA's name is derived from Vice President Harris's name, but it is not actually directly related to her.
The KAMA token has experienced significant price fluctuations in the short term. According to CoinGecko data, KAMA rose by more than 100% in 24 hours, reaching a historical high of $0.03. According to historical records, KAMA’s market value has exceeded US$30 million, and its 24-hour trading volume has exceeded US$1 million.
However, as a meme token, KAMA's value mainly comes from social media hype and speculation rather than actual application value. Compared with other candidate tokens, KAMA seems to rely more on short-term market sentiment and speculation rather than long-term value proposition. KAMA's official website claims that its goal is to "enable everyone to participate in the future of cryptocurrency", but does not provide specific usage scenarios or technological innovations.
2）WLF (World Liberty Financial)
The WLF project was founded by Trump's son. Trump himself was appointed as the project's "chief crypto advocate," while his sons Eric and Donald Jr. served as "Web3 ambassadors." The project's technical architecture includes a "credit account system" built on the Aave and Ethereum blockchains to facilitate decentralized lending. However, it is worth noting that WLF has personnel ties to Dough Finance, a DeFi project that suffered a $2 million hack, which may raise concerns about the project's security.
According to the draft white paper of the project obtained by CoinDesk, WLF's "governance" crypto token WIF plans to allocate 70% to "founders, teams and service providers", which is much higher than the internal allocation ratio of other well-known crypto projects. The remaining 30% will be allocated through public sales, and part of the funds will be used to support project operations. This abnormally high internal allocation ratio has aroused doubts from industry insiders, who believe that it may contradict the project's claim of "returning financial power to the people".
WIF tokens are designed to be non-transferable, probably to avoid violating securities laws. However, this feature also limits the market liquidity of the tokens, which may affect their future value and utility. The WLF team said that the token economics plan has not yet been finalized, leaving the possibility of further adjustments.
IV. Investment Potential Assessment of Candidate Tokens
1) Speculative opportunities
The election situation will definitely have a relatively large impact on the price of tokens. When the two forces are competing, the tokens represented by each party will definitely be difficult to distinguish. As for social media and news events, they also have a role, but the role will not be too great. It can only affect short-term price fluctuations. No matter what political views either camp has, the policy on blockchain will not be implemented so quickly. It is mainly related to the interested parties. There are many camps behind each party, and the implementation of a policy requires a long way to go. It is not something that can be achieved casually. Moreover, the tokens involved in politics are generally Memecoin, and the sustainability of Memecoin is not long.
The investment potential of candidate-related tokens is closely related to the election situation in the US. As the election progresses, changes in the support rates of each candidate are likely to directly affect the price fluctuations of related tokens. In the case of evenly matched two camps, the tokens represented by each may be difficult to distinguish.
Social media and news events also have some impact on the prices of these tokens, but they are mainly concentrated in short-term fluctuations. As for the impact of the final elected party's policy implementation on the future of tokens, no matter what the political views of either camp are, the actual implementation of blockchain-related policies often takes a long time. The formulation and implementation of policies involve the interests of multiple parties and require a complex legislative and approval process, so it is unlikely to have an immediate and lasting impact on token prices.
In addition, politically-related tokens are mostly meme coins, which are usually not sustainable for a long time. Their value depends more on short-term hype and social media attention than actual application scenarios or technological innovation.
2) Risk Analysis
Market manipulation risk
Candidate-related tokens are highly susceptible to market manipulation. First, because the liquidity of these tokens is generally low, large transactions may cause sharp price fluctuations. Some investors may take advantage of this to conduct "pump and dump" operations to obtain improper benefits. Second, the spread of false information may have a significant impact on token prices. In the era of social media, rumors or fake news about candidates can spread quickly, causing irrational fluctuations in the prices of related tokens. For example, a false news about a candidate's change in policy stance may trigger a sharp rise or fall in the price of related tokens.
V. Conclusion
In the context of the 2024 US election, candidate-related tokens have the dual attributes of political participation tools and investment products. These tokens provide supporters with new ways of political expression, while also providing investors with high-risk and high-return speculative opportunities.
At the same time, this phenomenon also highlights the importance of establishing a more complete regulatory framework and investor protection mechanism in the cryptocurrency market. In the future, how to strike a balance between encouraging innovation and preventing risks will be an important issue facing policymakers.
