Written by Paul Veradittakit, Partner at Pantera Capital
Compiled by: Luffy, Foresight News
Crypto market sentiment remains strong a week after the U.S. election. Polymarket, Bitcoin, and potentially a more efficient and crypto-friendly government are all worth looking forward to.
Polymarket
Polymarket is a prediction market built on the Polygon blockchain that saw a surge in adoption during the election, with $3.2 billion in election bets, orders of magnitude higher than before the election. Compared to other prediction markets, Polymarket has no fees, supports seamless transactions, and is decentralized, meaning anyone can trade directly with the underlying contract on the chain via an API (allowing anyone to create a trading bot), and anyone from a non-blacklisted region can access the website frontend.
The amount of bets on Polymarket
Although the amount of bets dropped significantly after the election, mainstream users have tried and prefer using Polymarket over other centralized applications. A noticeable phenomenon after the election is the discussion of the accuracy of Polymarket in the mainstream media. (The Economist), (The Wall Street Journal), (Forbes), etc. have all called Polymarket the largest prediction market and used it to judge the difference between polls and voting sentiment before and after the election.
Hopefully, the enthusiasm around Polymarket will permeate the broader crypto ecosystem and inspire more crypto applications to follow Polymarket’s lead in pursuing better usability, abstraction, and marketing.
Bitcoin and altcoins
The price of Bitcoin hit a new all-time high, surging to $77,000 immediately after the election and has been on a tear ever since, approaching $100,000. Altcoins indirectly tied to the election also surged, such as those on Solana. Trump’s presidency did not directly lead to an increase in Bitcoin’s purchasing power, but his public endorsement was enough to send the token higher.
Expectations
The positive forces that the election itself brings to the cryptocurrency industry may not last forever. However, the impact of a unified Republican majority in both the House and Senate could mean a more efficient government and more cryptocurrency-related legislation.
There are significantly more pro-crypto representatives in both parties than anti-crypto representatives (266 to 120 in the House and 18 to 12 in the Senate). Trump, who supports crypto, may relax regulation of cryptocurrencies or promote pro-crypto regulation. World Liberty Financial is a cryptocurrency project that Trump is promoting and says it will run as an Aave instance (one of the largest DeFi protocols).
What does this mean for the future of cryptocurrencies? First, it could mean that lobbying efforts (such as those from Ripple and Coinbase) could increase to push cryptocurrency regulation in a friendly direction.
It is believed that regulation in the U.S. has been unclear, and clear regulation would completely change the way crypto businesses think about operating in the U.S. Most of the largest cryptocurrency venture capital firms are still based in the U.S., so allowing funded crypto companies to operate in the U.S. could strengthen the crypto industry.
Top DeFi protocols like Compound and Uniswap have also shown renewed interest in previously “forbidden” protocol features like staking, fee switching, etc. Increased regulatory clarity around these features could spur a new wave of innovation in the DeFi space.
Overall, I am very optimistic about the direction of the crypto industry after the election. A unified House and Senate may bring unexpected good news to the ever-changing crypto industry.
