Bitcoin, Polymarket, and DeFi all have bright prospects.
Written by: Paul Veradittakit, Partner at Pantera Capital
Compiled by: Luffy, Foresight News
A week after the U.S. election, the sentiment in the cryptocurrency market remains strong. Polymarket, Bitcoin, and potentially a more efficient and crypto-friendly government are all worth looking forward to.
Polymarket
Polymarket is a prediction market based on the Polygon blockchain, and its adoption surged during the election, with betting amounts reaching $3.2 billion, several orders of magnitude higher than before the election. Compared to other prediction markets, Polymarket charges no fees, supports seamless transactions, 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.
Betting amounts on Polymarket
Although the betting amounts dropped significantly after the election, mainstream users have tried and come to prefer using Polymarket over other centralized applications. A notable phenomenon post-election is the mainstream media's discussions about Polymarket's accuracy. Publications like The Economist, The Wall Street Journal, and Forbes have referred to Polymarket as the largest prediction market and used it to gauge the differences in public opinion polls and voting sentiments before and after the election.
I hope the enthusiasm of Polymarket can permeate into the broader crypto ecosystem and inspire more crypto applications to emulate Polymarket's practices, pursuing better usability, abstraction, and marketing.
Bitcoin and Altcoins
The price of Bitcoin hit an all-time high, soaring to $77,000 immediately after the election and then climbing towards $100,000. Altcoins indirectly related to the election also saw significant rises, like the altcoins on Solana. Trump's election did not directly enhance Bitcoin's purchasing power, but his public support was enough to drive up the tokens.
Looking forward
The positive force that the election itself brought to the cryptocurrency industry may not last indefinitely. However, the Republican majority in the House and Senate may mean that the government will be more efficient and will pass more legislation related to cryptocurrencies.
The number of representatives supporting cryptocurrencies in both parties is significantly greater than those opposing them (House 266 to 120, Senate 18 to 12). Pro-crypto Trump may ease regulations on cryptocurrencies or push for supportive regulations. World Liberty Financial is a cryptocurrency project that Trump is promoting, and it has stated that it will operate as an Aave instance (one of the largest DeFi protocols).
What does this mean for the future of cryptocurrencies? Firstly, it could mean that lobbying efforts (such as those from Ripple and Coinbase) may increase to push cryptocurrency regulation in a friendly direction.
People believe that regulatory clarity in the U.S. has been ambiguous, and clear regulations would fundamentally change how crypto businesses view 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 (such as staking, fee conversion, etc.). Increasing regulatory transparency 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 following the election. A unified House and Senate could bring unexpected good news to the rapidly changing crypto industry.
