Original title: (Crypto for Advisors: Post-Election Review)
Author: Paul Veradittakit, Partner at Pantera Capital
Compiled by: Luffy, Foresight News
A week after the U.S. elections, the sentiment in the cryptocurrency market remains strong. Polymarket, Bitcoin, and possibly more efficient and crypto-friendly governments are to be anticipated.
Polymarket
Polymarket is a prediction market based on the Polygon blockchain, which saw a surge in adoption during the elections, with betting amounts reaching $3.2 billion, several orders of magnitude higher than before the elections. Compared to other prediction markets, Polymarket does not charge any fees, supports seamless trading, and is decentralized, meaning anyone can trade directly with the underlying contracts on-chain via API (allowing anyone to create trading bots), and anyone from non-blacklisted regions can access the website frontend.
Bet amounts on Polymarket
Although betting amounts significantly decreased after the elections, mainstream users have tried and preferred using Polymarket over other centralized applications. A notable phenomenon after the elections is the discussion of Polymarket's accuracy in mainstream media. (The Economist), (The Wall Street Journal), (Forbes), etc., have referred to Polymarket as the largest prediction market and used it to gauge the differences between pre- and post-election polls and voting sentiment.
There is hope that the enthusiasm for Polymarket can permeate into the broader crypto ecosystem and inspire more crypto applications to adopt Polymarket's practices, pursuing better usability, abstraction, and marketing.
Bitcoin and altcoins
The price of Bitcoin hit a historic high, soaring to $77,000 immediately after the elections and continuing to rise towards $100,000. Altcoins indirectly related to the elections also surged significantly, such as altcoins on Solana. Trump's election did not directly lead to increased purchasing power for Bitcoin, but his public support was enough to drive the token's rise.
Expectations
The positive forces brought to the cryptocurrency industry by the elections may not last indefinitely. However, the influence of the Republican majority in both the House and Senate may mean that the government will be more efficient and will pass more legislation regarding cryptocurrencies.
The number of representatives supporting cryptocurrency in both parties is significantly greater than those opposing it (266 to 120 in the House, 18 to 12 in the Senate). Pro-crypto Trump may loosen regulations on cryptocurrencies or push for pro-crypto regulations. World Liberty Financial is a cryptocurrency project that Trump is promoting and states it will operate as an Aave instance (one of the largest DeFi protocols).
What does this mean for the future of cryptocurrency? Firstly, this may mean that lobbying efforts (such as those from Ripple and Coinbase) could increase to push cryptocurrency regulation in a friendly direction.
People believe that the regulation in the U.S. has been unclear, and clear regulation would fundamentally change how crypto businesses think about operating in the U.S. Most of the largest cryptocurrency venture capital firms are still located in the U.S., so allowing funded crypto companies to operate in the U.S. could enhance the crypto industry.
Top DeFi protocols like Compound and Uniswap have also shown renewed interest in previously 'prohibited' protocol features (such as staking, fee conversion, etc.). Increasing regulatory transparency around these features could spark a new wave of innovation in the DeFi space.
Overall, I am very optimistic about the direction of the crypto industry after the elections. A unified House and Senate could bring unexpected good news to the rapidly changing crypto industry.
